The state of California recently increased the minimum wage for fast food sector workers by $4 to $20, prompting concerns about potential job losses as businesses turn to technology like self-service kiosks to offset higher labor costs. However, automation in the services industry is already prevalent, with the restaurant industry embracing it for years, even in states where the minimum wage has not increased. The use of robotics and automation at the store level, such as auto-refill technology and automated frying machines, has been a growing trend in the quick service restaurant space.
The higher wages for fast food workers could actually benefit fast food owners by attracting more workers into the industry amidst ongoing labor shortages, according to industry experts. The new wage increase in California, which applies to restaurant chains with over 60 nationwide locations, also establishes a fast food council that can adjust the wage annually based on inflation, as well as recommend safety standards for workers. Self-service kiosks are already common in large fast food chains, with companies like Panera Bread and McDonald’s implementing them to enhance the customer experience and increase profitability.
Restaurants are increasingly adopting self-service kiosks to cater to customer preferences for autonomous ordering, especially among younger consumers. The use of automation in the industry has been accelerated by the minimum wage increase in California, prompting businesses to explore technologies that can help manage labor costs. While automation is viewed as a way to enhance efficiency and improve the customer experience, it is also seen as a response to rising labor costs and the need to remain competitive in the fast food sector.
Fast food franchisees like Harsh Ghai are rapidly expanding the use of self-service kiosks in their restaurants in response to the minimum wage hike. Ghai plans to implement AI-powered drive-thru ordering and remove registers completely in all of his California locations, aiming to streamline operations and reduce labor costs. While Ghai aims to avoid layoffs, he acknowledges that some job losses may occur as technology becomes more integrated into restaurant operations. The California Restaurant Association acknowledges the challenges faced by restaurant operators due to the wage increase, leading to closures and a greater reliance on technology to stay afloat.
The fast food industry is undergoing significant changes driven by technology and rising labor costs, with automation and self-service kiosks becoming integral to restaurant operations. The wage increase in California has accelerated the adoption of technology, prompting businesses to rethink their operations and explore ways to remain profitable while maintaining affordability for customers. While concerns about job losses persist, the industry is adapting to a changing landscape by leveraging technology to enhance efficiency, improve customer service, and manage costs effectively. Ultimately, the integration of automation and self-service technologies is transforming the fast food sector, presenting both challenges and opportunities for businesses in California and beyond.
