Red Robin Eliminates Bus Boys as Restaurants Combat Minimum Wage Hikes

Fox Business discusses minimum wage hikes with Iain Murray.

At the beginning of January, minimum wage increases took effect in 18 states and 20 citiesacross the nation, and some industries are struggling to keep pace with rising labor costs.

Late Monday, casual dining chain Red Robin Gourmet Burgers (RRGB) announced that it would eliminate bus boys at 570 restaurant locations, a move that is expected to save the company an estimated $8 million over the course of the coming year. The company’s chief financial officer said the decision was made in order to “address the labor increases we’ve seen.”

Still, cutting jobs is often a popular response to rising labor costs among restaurants, Iain Murray, vice president for strategy at the Competitive Enterprise Institute, said.

“The restaurant industry exists on razor-thin margins … there are very few other places where you can cut costs to offset that rising cost,” he said.

Read the full article at Fox Business.