California’s recent decision to raise the statewide minimum wage to $20 has sent shockwaves through the restaurant industry, with celebrity chef Robert Irvine predicting dire consequences for small, family-owned establishments.
In an interview with Fox News Digital, Irvine warned that the Golden State’s actions could pave the way for other states to follow suit, potentially leading to the closure of up to 20% of mom-and-pop restaurants nationwide.
“This is Robert Irvine predicting we’re going to lose about 20-plus percent of our small, mom-and-pop business because what California has actually done is going to enable other states to do the same thing,” the host of “Restaurant: Impossible” cautioned.
He emphasized that the issue extends beyond California’s borders, as the state’s decision has “opened the gateways to other states to raise that minimum wage.”
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Since the implementation of the minimum wage hike, Irvine and his partner, restaurant tech outfitter GRUBBRR, have witnessed a staggering 77% increase in service requests.
The chef, who is an investor in GRUBBRR, believes that technological upgrades could be the key to preventing further restaurant closures and layoffs in the wake of California’s new law.
I get it folks. Maybe everything is going great. Maybe that thing you wanted to accomplish this year you haven't even started. Maybe you've already failed. Well, I'm here to remind you that it doesn't matter—if you're struggling, succeeding, or stuck in neutral—because the past… pic.twitter.com/yqwiJ1Vygz
— Robert Irvine (@RobertIrvine) April 4, 2024
While acknowledging the need for livable wages, Irvine pointed out the unfortunate timing of the wage increase, coinciding with high inflation and soaring food costs.
“The increase of wage plus the food cost is putting small, mom-and-pop operators out of business because they cannot afford $20 an hour, $27 an hour in some places,” he explained. As a result, many fast food chains are turning to technology to offset the cost of human labor.
Irvine clarified that embracing technology does not necessarily lead to job losses. Instead, it allows for the reallocation of labor to more efficient and productive roles. “It actually saves me the labor in the long run, because I’ve taken that human being that would be doing that and putting \[them\] to a better use somewhere else. Not firing the person, I’m reallocating the labor to work in a better format to me,” he stated.
The chef predicted that by the end of 2023, 44% of quick-service restaurants will have implemented technology in either the front or back of the house, potentially increasing average checks by 28% to 35%. This increased revenue can then be used to pay staff more and keep them satisfied in their roles.
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For restaurant owners concerned about the potential spread of California’s minimum wage law, Irvine encouraged a focus on innovation and collaboration with technology companies that understand their unique needs and vision. “Technology is not going away. It’s only getting better,” he remarked. “I became a heavy investor because I believe it’s the future.”
Image source: Wikimedia
