'There's always a price to pay’: Mike Rowe slams California’s minimum wage hike to $20 for fast food workers, warns that kiosks will 'replace' Americans earning low wages. Is he right?
California is raising the minimum wage for fast food restaurant employees to $20 per hour starting April 1, 2024. This is $4 more than the state's overall minimum wage.
While the new law is intended to improve the financial well-being of the state’s fast food workforce, TV personality Mike Rowe argued that it might have adverse effects on the target demographic.
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During a recent Fox Business interview, the “Dirty Jobs” host raised concerns about the potential for technology to replace human workers as restaurants encounter rising operational costs.
“I'll tell you what's going to happen here in California. It's the same thing that's happened in every other state: kiosks are going to replace low-wage workers. AI is going to have a voice in this,” he said.
Rowe also highlighted potential consumer impacts, predicting a noticeable rise in fast food prices.
“A Quarter Pounder with cheese is going to be a heck of a lot more expensive,” he said.
Fast food affordability
Rowe's concerns are echoed by many in the restaurant industry. For instance, Andrew Wiederhorn, chairman and founder of restaurant operator FAT Brands, recently warned that dining out costs would rise in response to minimum wage increases.
“Someone's got to pay for it and the restaurant operators don't have the margin for that,” Wiederhorn cautioned. “So, prices are going to go up.”
In fact, McDonald’s, the brand synonymous with affordable offerings like the Quarter Pounder, is already grappling with how to remain accessible to consumers.
During McDonald’s latest earnings conference call, CEO Chris Kempczinski said: “I think what you're going to see as you head into 2024 is probably more attention to what I would describe as affordability.”
The company’s CFO Ian Borden further stated that pricing decisions will be “consumer led,” adding that it’s the franchisees who set prices in their respective restaurants.
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‘Bad look for the governor’
Rowe also commented on Panera Bread’s specific situation in relation to California’s minimum wage increase.
The new law exempts chains that bake their own bread and sell it as a standalone item from this wage increase requirement, notably benefiting Panera Bread. There have been allegations that this clause was included due to the relationship between Governor Gavin Newsom and billionaire Greg Flynn, a major Panera franchisee and a longtime donor to Newsom.
More recently, though, Flynn said that the Panera Bread restaurant he owns in California will start paying workers at least $20 an hour.
Rowe pointed to market forces as a driving factor behind Flynn’s decision to comply with the new minimum wage law.
“If you're suddenly the only guy who isn't paying $20 an hour, and you're looking at a finite pool of people who want to work in the fast food industry, well, who's going to apply for a job with you? Right? so they probably kind of had to do it,” he noted.
“I thought it was a bad look for the governor. I think it's a bad look for Panera ... There's always a price to pay for doing a short term thing that looks and feels good to do and say.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
