Minimum Wage Hikes Already Backfiring

Restaurant chain Red Robin is eliminating the “busboy” position at its 570 locations as a cost-saving measure to offset minimum wage hikes.

“We need to do that to address the labor increases we’ve seen,” Red Robin’s Chief Financial Officer, Guy Constant, told attendees at the ICR retail conference in Orlando, Florida, the New York Post reports.

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Red Robin hopes to save $8 million by eliminating the position, according to the Post. The Colorado-based chain has a strong presence in Western states, where the minimum wage has risen more quickly.

In Colorado, wages increased increased to $10.20 from $9.30. Washington and California both saw a 50-cent increase to $11 from $10.50, according to Fox 23.

Red Robin already eliminated the expediter or “food runner” position in 2017 seeking to lower labor costs.

Fewer jobs will now be available to those that need them most: the low-skilled. While costs will be cut, the obvious trade-off will be that its affects customer service, something the restaurant chain had every economic incentive to consider.

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