5 Months After California Raised Fast-Food Minimum Wage to $20, Chipotle Is Already Bringing in the Robots
The article discusses the negative consequences of California’s recent law mandating a $20 minimum wage for fast-food workers, which has led to job losses and price increases in the fast-food industry. Companies like Chipotle are responding by introducing automation, such as the ”Autocado” machine and “Augmented Makeline,” to reduce reliance on human labor. The article posits that such wage hikes may benefit few while harming workers and consumers alike, as evidenced by a reported loss of approximately 9,500 fast-food jobs shortly after the law was enacted. Additionally, many fast-food chains have begun raising prices, further burdening customers. The article highlights the irony that even California Governor Gavin Newsom, who signed the bill into law, does not pay his restaurant employees the mandated wage, suggesting a lack of sustainability for these policies. Ultimately, it warns that the ideal of a living wage for low-skill workers cannot be achieved without detrimental effects like job elimination or higher prices.
When it comes to matters of people’s livelihoods, there is absolutely no glee in saying, “We told you so,” but …
We told you so.
As anyone with a rudimentary, high school-level knowledge of economics could’ve told you, the push to magically (federally) mandate a pay wage for low-skill employees was always going to have dire consequences, for workers and customers alike.
The latest example of this comes from deep blue California, where it has taken less than half a year for the $20 an hour fast-food minimum wage to start having a big impact — and not in a way that benefits employees.
Chipotle, a “fast casual” Mexican restaurant that boasts about its handcrafted foods, announced on Monday that one of its most popular items was about to be less “handcrafted.”
The announcement touted the debut of the company’s new “Autocado” machine, which “cuts, cores, and peels avocados before they are hand mashed to create the restaurant’s signature guacamole.”
Not only did the company announce the “Autocado,” but it also announced the debut of its “Augmented Makeline,” which will use “automated technology to build bowls and salads while Chipotle employees operate the top makeline to make burritos, tacos, quesadillas, and kid’s meals.”
Now, having automated help to work with the guacamole, bowls and salads isn’t much of a start on fully replacing human employees — but it’s a start nonetheless.
And it’s a course that America seems set on, if this push for a federally-mandated minimum wage is anything to go by.
But make no mistake about it: This is an utterly disastrous course, despite arguments that say otherwise from noted Batman nemesis The Joker California Democratic Gov. Gavin Newsom.
“Last September, Gov. Gavin Newsom signed California Assembly Bill 1287 into law, which includes a $20 per hour minimum wage for fast-food workers and a fast-food regulatory council, which has the authority to raise the industry’s minimum wage annually,” the Hoover Institution reported in April.
The research center bluntly laid out the immediate results of Newsom’s grand plan: “But between last fall and January, California fast-food restaurants cut about 9,500 jobs.”
(It’s worth pointing out that this is “Bidenomics” and/or “Kamalanomics” in action.)
“Total private employment in California declined just 0.2 percent during the same period, which makes it tempting to conclude that many of those lost fast-food jobs resulted from the higher labor costs employers would need to pay,” the Hoover Institution noted.
“More fast-food job losses are coming as the new minimum wage took effect earlier this month,” the research group continued. “This includes losses at Pizza Hut and Round Table Pizza, which are in the process of firing nearly 1,300 delivery drivers. El Pollo Loco and Jack in the Box announced that they will speed up the use of robotics, including robots that make salsa and cook fried foods.
“Fast-food prices are up since the law took effect on April 1. In less than one month, Wendy’s increased prices by 8 percent, Chipotle’s prices have increased by 7.5 percent, and Starbucks prices are up by 7 percent. McDonald’s has announced it will be raising prices, and many other fast-food franchises have announced hiring freezes.”
But the most damning condemnation of this minimum wage hike doesn’t come from any think tank, legal scholar or worldly economist.
It actually comes from Newsom himself.
The beleaguered governor is part of an investment group that owns several high-end eateries and wineries in California. Surely those employees would make that $20-an-hour … right?
Nope, they make about $16, which means Newsom is basically saying, “I know it’s not sustainable. Oh, well!”
You simply cannot pay low-skill workers (this isn’t meant to be a pejorative, one of this writer’s first jobs was at a Panda Express) a “living” wage without eliminating jobs or raising prices — neither of which is great for any party involved.
Newsom clearly knows all of this, despite signing the wage bill into law back in September, which is exactly why he is one of the most excoriated politicians this side of Bob Menendez.
“We told you so” is always hard to hear.
But when it effectively comes from the person who signed the bill? That’s a lasting sting.
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