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California Fast Food Franchisee Hurries to Install Kiosks as $20 Minimum Wage Slams Businesses

Published on 2 weeks ago

The Golden State’s latest legislative move to hike the minimum wage to $20 for fast-food workers is sending shockwaves through the industry, compelling franchise owners to pivot swiftly in a bid to stay afloat. In California, a major Burger King franchisee has been spurred into action, accelerating the rollout of order kiosks across his restaurants as a direct response to the soaring labor costs that this new wage floor mandates.

This strategic shift toward automation is emblematic of the broader challenges faced by small and medium-sized businesses in an economy where wage increases are outpacing growth. The franchisee, who operates 100 Burger King locations, is candid about the financial pressures: “We can’t roll out these kiosks fast enough,” he said. The urgency in his voice underscores a stark reality: businesses are grappling with how to sustain operations when labor expenses threaten their slim profit margins.

Ghai owns around 180 fast food locations in the state, which include Burger Kings, Taco Bells, and Popeyes, Business Insider reported Friday. Harsh Ghai, is hurrying to install kiosks at his restaurants to save money as the $20 minimum wage affects businesses.

“We are installing kiosks in every single restaurant,” Ghai explained.

The move towards automation isn’t just a knee-jerk reaction; it’s a calculated adaptation. Kiosks don’t call in sick, they don’t require health benefits, and they certainly don’t demand raises. For business owners, this represents an opportunity to rein in costs while maintaining service levels. However, it also raises questions about the long-term implications for workers who find themselves increasingly sidelined by machines.

The California law that has catalyzed this shift—known as AB 257 or the FAST Recovery Act—aims to empower fast-food workers and improve their working conditions. It establishes a Fast Food Council with authority to increase minimum wages up to $22 per hour by 2023 for chains with more than 100 locations nationwide. Proponents argue that this will lead to fairer pay for workers who have long been undervalued.

Yet critics see another side of the coin. They point out that such dramatic wage hikes can backfire on employees if jobs are slashed or hours cut as businesses struggle with higher payroll costs. The franchisee’s rush to install kiosks is not an isolated incident but part of a larger trend where technology becomes an attractive alternative to human labor when costs rise precipitously.

Indeed, evidence suggests that steep minimum wage increases can lead employers to reduce staff numbers or hours worked. A study by the University of Washington on Seattle’s minimum wage increase found that while wages went up for those still employed, there was a significant reduction in employment and hours worked for low-wage workers.

In California’s case, some fear that AB 257 could set off similar unintended consequences statewide—affecting not only employment prospects but also potentially driving up prices for consumers as businesses pass on their increased costs.

The debate over minimum wage laws often hinges on balancing worker welfare with economic viability—a tightrope walk between social justice and market realities. While higher wages can undoubtedly lift living standards for some workers, they also test the resilience of businesses operating on thin margins in highly competitive sectors like fast food.

As California embarks on this bold experiment with its fast-food sector’s economics, eyes will be keenly watching outcomes from both sides of the ideological divide. Will higher wages lead to greater prosperity and stability for workers? Or will they prompt more businesses like this Burger King franchisee to turn towards automation and other cost-saving measures?

What remains clear is that business owners are not waiting around to find out; they’re taking proactive steps now—steps that could redefine what it means to work in fast food altogether.

As policymakers continue crafting legislation aimed at improving worker conditions and pay scales across various industries, they must consider these real-world responses from business owners facing mounting fiscal pressures.

California’s journey with AB 257 may well become a case study in economic cause and effect—one where every action has an equal and opposite reaction within the delicate ecosystem of labor markets and business operations.

For now, though, as kiosks pop up where cashiers once stood in Burger King outlets across California, one thing is certain: The landscape of quick-service restaurants is changing rapidly under the weight of legislative change—and all stakeholders must adapt or risk being left behind.