Minimum wage hikes took effect in 18 states and 20 cities on Jan. 1, so many businesses reacted by cutting jobs. Restaurant chain Red Robin axed table bussers at 570 outlets in an attempt to stay afloat amid the rising labor costs, Fox Business reported.
Red Robin was hit hard by the minimum wage hikes that took effect in most of the areas in which its restaurants are located. Cutting the table bussers, about the lowest jobs in restaurant operations, will save $8 million in the coming year.
Red Robin had already realized it could save nearly $10 million by eliminating its food expediters, the New York Post reported.
The chain’s chief financial officer, Guy Constant, said the job eliminations were required in order for the chain to “address the labor increases we’ve seen.”
Michael Saltsman, director of the Employment Policies Institute, told Fox Business that a chain like Red Robin, “which has a lot of exposure in western states” would have to “find a way to do more with less” if it could not pass the minimum wage increases off in higher prices.
A negative consequence of rising minimum wages has been increased challenges for youths in the labor market, Saltsman said, per Fox News.
“I think the loss, as the minimum wage goes up … [is the] hollowing out of entry-level opportunities,” he said.
A study conducted by EPI, which analyzed employment trends from 1990 through 2017, found that each 10% increase in the minimum wage in California has resulted in a corresponding 2% decline in employment for affected employees. The impact was larger, 5%, for lower-paid workers.
The Red Robin job eliminations would have a ripple effect, with existing staff having to pick up the slack once the table bussers have been let go – something restaurant consultant John Gordon said would impact customer service, the Post noted.
Snagajob.com described the bussers position as cleaning tables, taking plates, utensils and drinkware to the kitchen to be washed, making sure diners' water glasses are full, and resetting tables for the next service. Bussers also might help waiters and waitresses bring food out to a table, restock utensils, napkins and other dining room needs.
Anil Verma, a professor at the University of Toronto’s Rotman School of Management, told TVO that it was smaller shops and restaurants that would feel the minimum wage hikes the most.
“High-end restaurants already have a margin that will allow them to absorb it more,” Verma said. “But there are a lot of small mom-and-pop shops, and they will just have to absorb a reduction in their profits. That’s the reality. The burden falls heavily on the most vulnerable.”
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