CA Restaurants Cut Jobs As Wage Increase Nears

In anticipation of a California law that will set fast-food workers’ wages at $20 an hour beginning in April, restaurants have begun laying off employees and reducing workers’ hours in an effort to cut costs, reports The Wall Street Journal.

Previously, the state’s minimum wage was $16 an hour. The increase has led many national chains, including McDonald’s, Chipotle, and Jack in the Box to say that they would raise menu prices following the increase.

In San Jose, California, the owner of two Vitality Bowls restaurants, Brian Hom, said that he now runs his stores with only two employees, down from four. This translates into longer order and wait times, said Hom. Additionally, he is raising prices by 10 percent to help cover the increased labor costs.

“I’m definitely not going to hire anymore,” he said.

Other California restaurant operators are looking for other ways to offset costs, like closing down during slower parts of the day or serving menu items that take less production time.

“I can’t charge $20 for Happy Meals. I’m leaving no stones unturned,” said Scott Rodrick, owner of 18 McDonald’s locations in the state.

Proponents of the wage increase said that the measures will help improve the lives of local workers. Organized workers indicate they hope to replicate the law in other states.

Opponents to the wage increase say the change will increase employers’ costs, raise prices for consumers, and compel some employers to turn to technology to reduce their need for human workers. Full Story (Subscription Required)