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Despite layoffs, price hikes, and locations closing their doors, some fast food managers are now seeing major raises.
To recap, the $20 minimum wage has significantly increased labor costs for restaurants. To offset these expenses, some chains have resorted to reducing staff but what not many are talking about is that it also gave managers a 25% increase in pay.
One such chain, Raising Caine’s – managers are now reaching $174,000 after bonuses based on profit and location.
Raises & Bonuses Bring Pay To New Heights
27-year-old general manager at a Raising Caine’s location in Carson, CA, Monique Pizano, says it’s been “life changing.” She went from making $79,000 a year to $85,000. And if she meets the bonus criteria, she’s eligible for a $5,000-7,500 bonus each month.
According to a report from the Wall Street Journal, “mandated pay boosts” have been helping reduce turnover at fast food chains.
Across the state menu prices rose by about 7% to make up for the minimum wage. One chain, Rubio’s Coastal Grill just closed dozens of locations, and filed for bankruptcy.
The answer, for many chains, seems to be investing in their existing managers. Salaries for these positions are reportedly rising. The increased compensation aims to incentivize managers to take on additional responsibilities and oversee a larger workload.
While higher wages for managers might seem counterintuitive during a period of cost-cutting, restaurants argue it’s a strategic move. More experienced and motivated managers can potentially streamline operations, reduce training time for new hires (who may be fewer in number), and boost overall productivity.
Is it a Win-Win?
The situation presents a complex picture. Workers who have kept their jobs are undoubtedly enjoying the higher pay but layoffs have impacted many and created a more demanding work environment for those who remain.
Will higher manager salaries combined with a leaner workforce be enough to maintain profitability? Will automation play a larger role, further reducing the need for human employees?
