https://currently.att.yahoo.com/att/cm/rubio-coastal-grill-closes-nearly-184227715.html
The new California minimum fast food wage is having some disastrous consequences
One regional chain restaurant, in a fierce fast food taco market, closing some locations isn't exactly "disastrous". A lot of fast food chains are contracting across the country, and Rubio's already filed Chapter 11 in 2020. Not that the CA minimum wage raise didn't contribute, but it isn't the only factor.
https://www.thetakeout.com/1591318/fast-food-chains-closing-in-2024/
I rarely (never) eat at McDonalds. Driving an octogenarian relative home from a doctor's visit last week who needed lunch. She requested Mickey Dees. Haven't been in one of those places in a coon's age (there's a southern expression for ya!). Upon entering, I was shocked by two things. One - very few human beings working here. You had to order through a giant touch-screen set-up. If you want special orders go to that other place. Hard to be specific on a screen with no key pad. After finally ordering (reasonably successfully - I don't really need cheese I guess) it was time to pay up. Sticker shock ain't the right term, but we could've eaten at a sit-down joint for what 2 quarter pounders, 2 small drinks and a split order of fries cost. I can only imagine that this is the result of leaning on fast food franchises (almost exclusively McDonalds?) to pay a living wage for doing what used to be a teenagers part-time gig. Bon apetite!
@rusty Yeah, a lot of fast food chains have gotten hit hard by rising food prices and healthier eating trends (which isn't a bad thing). That and COVID brought the ordering kiosks so you have even fewer employees on the payroll. And the days of "dollar menus" is long gone.
But it's not just fast food, the restaurant service industry has slim margins to begin with. If it were easy, everyone would be doing it.
Anyways, I usually get my tacos from a local food truck up the street.
I think $20/hour to flip burgers is ridiculous and just not fair to the fast food chains. I live in Texas now after living my entire life in California until only two years ago. The minimum wage here in Texas is a RIDICULOUSLY low $7.25/hour. OK, let's make amends, let's DOUBLE it and make it $14.50/hour. That's still .50 cents less than the minimum that non-fast food employees make in California. Get my point? It's just not economically feasible for every fast food chain to pay each of it's employees $160 per 8 hour shift. I think $15/hour is a very reasonable minimum wage. That's $120 before taxes for every 8 hours. If I was a 17 year old kid I'd be overjoyed to get that. If I was a 22 year old college student, I'd be overjoyed to get that. You wanna make more? EDUCATE YOURSELF. And I don't necessarily mean going to college, although that's one way. Many, many skilled trades pay a livable wage. I never remember anyone, going all the way back to the 60's (yes, I'm old) who thought that they were going to make a decent living flipping burgers.
And by the way porkchop: Rubio's is not the only fast food chain to cut way back already since the law took effect. Pizza Hut laid off hundreds of delivery drivers.
Higher fast-food wages lead to cutting corners in food quality, portion size and even customer service. This will likely lead to unsatisfied customers. The "Quarter Pounder" (in name only?) that I ate last week reminded me of those smaller "regular size" burgers from years ago. I'm sure that the burgers have gotten smaller - not that I have grown freakishly large or anything. This will likely lead to entire chains going out of business.
Like PCB mentioned, especially nowadays - it's a razor thin profit margin for these establishments. A good buddy of mine owned his own restaurant (breakfast/lunch counter type). He was heartbroken when he just couldn't earn a profit anymore and had to quit. Says now that looking back - getting out of the food business is the best thing that ever happened to him.
Fast food wages are merely a symptom of a larger problem - sending manufacturing overseas. No politics - no BS. We need real jobs with real benefits - especially health insurance!
Paving the way for total automation of an industry. The technology is already available, just need that catalyst. The totally proven go to plan of having a solution to a problem before they created it. Government in action (LOL)
Businesses have always looked for ways to make it cheaper and sell it for more. Fact: automation takes jobs. When automation completely takes over - who's gonna buy the goods and services being produced? I heard an article on NPR last year where an economist said that there will likely come a day when the government will have to pay people for doing nothing. Smart idea? Might keep the crime rates down - desperate folks do desperate stuff!
As a Californian, it's really hard to live in any desirable area without working multiple jobs. You may complain about newsom raising wages for the fast food industry, but to play devil's advocate for a minute, why don't you sit in the governor's office and tell people on the lowest end of the wage scale that they're not allowed to make more money because we need to run the economy on their backs. 🤔 🤣
In the end a systemic solution is better than arguing for one side or the other, But I realize that arguing for one side or the other entices tiny minds and is very popular these days.
For example,
It used to be that when politicians were crooked or did stupid things we were all against stupid, lying, cheating politicians. But now we venerate some and castigate others. And that's just #sad.
As the dude would say, It's just my opinion, but I think venerating any politician means that someone needs to get a real life.
Pizza Hut laid off hundreds of delivery drivers.
Door dash and Uber Eats have made in-house delivery obsolete.
Economy run on the back of fast food? All this time I thought NFL Football was paying the bills! 😉
Seriously, every major city wants to build a domed stadium - or some futuristic looking stadium (JAX) hoping to either lure or keep an NFL team in town. Yeah, I guess I'd assume see some $20.00 per hour burger flippers over a bunch of folks who earned $BILLIONS tossing a piece of leather around. Whatever feeds the economy!
$20/hr is $41K annual, if one works full time. I don't think there are a lot of FT fast food employees, by design of the parent companies so they don't have to pay any benefits.
CA has one of the highest costs of living, and higher ed is expensive as ever. Even if you worked FT and made $41K, that doesn't pay for school and costs of living in CA.
I just feel like this is reductive of food service workers - everyone wants them to be flawless until it's time to pay them. Then people argue they are doing mindless work. But we don't want fast food automated, we are in the corner of the workers (but still don't want to pay them)! Which is it?!
Also, everyone I know from CA doesn't shut up about how amazing its Cali-Mex is. So who are the people slumming it getting fast food tacos?
This morning I stopped at my local CVS to pickup a greeting card. When I got to the register there was not an employee in sight. I could've walked out with anything (yeah, I know - automated camera security!). I go to the self-check kiosk thing. All of these things seem to work differently, so I just followed the screen prompt. Usually, you start by either scanning your rewards card or an item that you're buying. This time it prompted me to scan my credit card (no cash at most of these things). I did, and then was asked how I wanted my receipt. At the same time, a "register tape" showing recently purchased items appeared. Not MY items. I'm guessing that the last person through did not complete all of the steps and left with their unpaid-for purchases ... which are now on MY order. I start pushing the HELP button and frantically start searching for an associate. After about 10 minutes, a young woman came out of the office - which was like, 20 feet from the register kiosk area. And she seemed put out at my request for help. I'm sure that the person who left without paying probably doesn't realize that they'd done so.
Ring up your own groceries and purchases. Punch in your own to-go order. What's next - go into the kitchen and cook your own food? Wanna fix the economy? HIRE some people!
@waitinforrain: The $20 minimum wage applies only to fast food workers. Which means that a Nurse's Aide working in an Assisted Living facility can make the State minimum of $15 while the guy flipping burgers makes $5 more. Does anyone here think that's fair?
I hate when we start comparing the values of arbitrary jobs. Because you could go on and on, industry after industry - state after state. The world is not equitable, and just because the needle gets moved for one industry doesn't mean another industry shouldn't get a small raise. Of course, everyone should have a living wage, but you do what you can. I'm more bothered by executives making far too much money that they retain in investments and real estate they don't use rather than someone getting another Lincoln per hour. If it's a problem, then maybe Rubio's CEO or VP of HR should take a pay cut.
The way we treat our elderly is awful, and it's the fault of bottom line insurance companies and private equity companies buying up facilities and bleeding them dry. That's a whole other issue. The US's health care model is only concerned with profit from misery. But the last time someone even tried to reform health care there was some, uh, resistance.
I'm not an economist, but if you pay well and treat your employees with respect, you'll have a happy workforce and retain workers and your business is more likely to do well. If an industry doesn't keep its workers happy, people will find other work. There are plenty of oil rigs willing to pay.
https://currently.att.yahoo.com/finance/news/california-fast-food-wage-hike-020705546.html
I can't state my case ANY better than this article does. "Governments, unlike private businesses, have options when they run out of money, said Manzo, who said officials were living in a "fantasyland" by thinking that drastic wage increases will help workers or businesses." And who is Tom Manzo? Just the founder of the California Business and Industrial Alliance (CABIA).
@robslob A lot of the fast food joints are FRANCHISES. Each store is (usually) a mom and pop operation. People see a McDonalds and immediately think that they are owned by a huge, wealthy corporation. McDonalds is actually more of a real estate company than a restaurant company. They provide the franchisee with advertising and a recognizable image. For this, they take a whopping cut. It's a cycle: wages go up - costs go up. Mom and pop take the biggest hit.
I sound like a broken recording of a whining old man but my dad had an 8th grade education (not that uncommon then) and landed a job with a blue collar living salary and insurance benefits. In those days, teenagers eagerly flipped the burgers - while dreaming about that car they were saving up for. What happened?
@rusty: A teenager in California should be able to save for a car making $15/hour. Granted, he/she would have to be living at home to do that, but that's no different than it was 50 years ago.
Governments, unlike private businesses, have options when they run out of money
Again, the white collar folks at the top can take a pay cut. It's what happens in sports when a finite amount of money is available to a team, the highest paid person sometimes takes less in order to spread it around. CEOs and HR VPs refuse to do this.
I get it, the government determining arbitrary wages is a slippery slope and the whole AB5 independent contractors debacle was a well-meaning disaster that neither side wanted. I'm not a Newsome fan. But fast food workers don't work full-time and it's because they got paid squat in the past that people disregard "flipping burgers" as something useful - until they go order a cheese burger. This isn't a disaster.
@porkchopbob: "This isn't a disaster." You can't say that yet with certainty. We're barely over two months since the new minimum wage for California fast food employees took effect (4/1/24). Rubio's has closed 48 California restaurants, Pizza Hut laid off 1,200 drivers. Let's wait until April 1, 2025, one year from when the law took effect, and THEN assess the carnage. My gut feeling is that it will be much, much worse. And prices will go up, up, up.
@porkchopbob: "This isn't a disaster." You can't say that yet with certainty. We're barely over two months since the new minimum wage for California fast food employees took effect (4/1/24). Rubio's has closed 48 California restaurants, Pizza Hut laid off 1,200 drivers. Let's wait until April 1, 2025, one year from when the law took effect, and THEN assess the carnage. My gut feeling is that it will be much, much worse. And prices will go up, up, up.
EXACTLY MY POINT you can't say it is "disastrous" WITH any certainty. As I mentioned, Rubio's was already recently in bankruptcy and in-house delivery drivers across the country have been dropped thanks to services like Uber Eats and Door Dash, before the wage hike. This isn't a good example in any way, too many other factors need to be taken into account.
The problem is that maybe the fast food service industry's model is flawed. Why is a burger at a restaurant $15 while a fast foot burger is $5? Sure, the fast food restaurant probably buys cheaper ingredients in bulk. But also because the people making it are historically paid less without tips, and thus, the customer values that cook and server less than a restaurant cook and waitress (a waitress also gets paid shite and works for tips).
So, I'm not saying this won't hurt fast food restaurants' bottom lines. But you can't call it "disastrous", the industry has always managed to find ways to stay profitable.
@porkchopbob: "But you can't call it "disastrous", the industry has always managed to find ways to stay profitable." And the best way to do that would be to rescind Newsom's ridiculous minimum wage mandate. I'm done. Let's talk in another year. I don't think it's gonna be a pretty time for fast food vendors.
Makes one wonder how many California Legislators that passed the mandate own stock or at least have stock options in companies that manufacture automated systems for fast food industries? (LOL)
If one has the ability to think things through, the eventual outcome will be more fast food workers getting laid off, the cost of shitty food will continue to rise, and consumers will just say fuck it and quit buying it. (IMHO) Just another tactic by politicians to kill off small business. In the end, only a small percentage of those working in that industry will be around to reap the benefit of this mandate as time goes on. For those saying we have to wait and see, well... Look back a few years ago at what Covid-19 did for small business owners everywhere. The ones that survived cut their labor force and raised prices. A lot of those eventually folded anyway. Why? The lack of a customer base. Covid-19 and a mandatory 20 buck per hour wage are two different circumstances, but to the profit margin of most small business owner/franchisee, both are the catalyst for the same exact scenario. If you have never owned a small business, you probably won't grasp the concept. Of course, mileage will vary on that. (LOL)
I got the hell out of California in 2010 cause it was too expensive to run a business there. I had city, county, state, and federal bureaucracies picking my pocket and then bent me over again when I wanted to spend any of what was left on running my household.
@gotdrumz: Well said, and pretty much my exact sentiments.
