As Gov. Gavin Newsom Pitches $20 Minimum Wage, Food Chains Pilot Automation to Cut Labor Costs

Next April, California’s minimum wage for fast food workers will increase to $20 per hour.

The wage increase is roughly four dollars higher than the current minimum wage ($16.21 per hour) and comes after Gov. Gavin Newsom signed legislation mandating the pay increase.

“California is home to more than 500,000 fast-food workers who – for decades – have been fighting for higher wages and better working conditions,” Newsom said in a statement. “Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

The new law also creates a Fast Food Council that has the power to continue wage increases through the year 2029.

Yet, as California officials tout the bill as a success for worker conditions, the chances are now higher that some employees will be replaced by automated robots and kiosks.

Days after Newsom signed the bill, reports show that multiple restaurants are testing automated systems to eliminate human workers and reduce labor costs.

Chipotle Mexican Grill is testing whether automation can make burritos and salads. Last year, at a California restaurant, the company began testing a robot that makes tortilla chips.

On Oct. 3, the company announced a new automated digital collaboration with Hyphen, a platform to help restaurant owners automate their kitchens.

"Chipotle's new digital makeline built by Hyphen embodies our commitment to leveraging robotics to unlock the human potential of our workforce, ensuring an elevated dining experience for our guests," Curt Garner, Chief Customer and Technology Officer, said during the announcement. "Our goal is to have the automated digital makeline be the centerpiece of all our restaurants' digital kitchens."

Earlier in the year, Sweetgreen debuted a fully automated robotic kitchen that the company expects will cut labor costs in half. The kitchen was launched in Naperville, Illinois, with a second location expected to open later this year.

“We believe that automation will enable us to elevate the quality and integrity of our food, while also providing a faster and more convenient experience for our customers, and a better, more dynamic job for our team members,” said Jonathan Neman, the brand's CEO and co-founder. “With the integration of our Sweetgreen Infinite Kitchen in our restaurants, we can unlock efficiencies that will enable us to grow more quickly as we scale.”

As Business Insider reported, many fast-food chains are finding ways to use less labor, including the mega-chain McDonald’s, which has launched automated stores as lawmakers continue increasing minimum pay.

“Automating parts of the fast-food ordering and preparation process could help McDonald's buck the trends of slower service and longer wait times, and partially immunize the chain to labor supply woes as the price of labor increases,” Business Insider explained.