QSR Industry and the $15 Minimum Wage

Like many of you, my first real job was in the Quick Service Restaurant (QSR) industry while in High School, which was followed by 3 years in a fine dining establishment. I learned about responsibility, teamwork, money management, people management, quality vs quantity equation in business along with experiencing the joy of having my own money. These QSR and fine dining positions have played a key role in preparing adolescents with the skills needed for transitioning into the next level of their professional development, but what happens when positions meant for building skills are turned into long term careers? 

 

Portrait of a pretty barista with hands on hips at the coffee shop
closed Resrtuarant

The QSR industry is the largest training institution in the United States. While there are career opportunities within the industry, approximately 70% of a QSR restaurants traditional work force falls into the career trainee category with an average tenure of 2-3 years.

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"The business model for QSR, Casual Dinning and Small Box Retail was not designed for all positions to provide a career income." 


Mark Nazarenus

President of ITech Digital 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As some politicians push to make the $15.00 rate the minimum wage of the land, there has been very little in-depth economic research as to the impact this increase would have on the QSR industry. During the previous administration, they had settled on a proposed $10.10 pay rate. This has never been implemented, but there was a reasonable amount of study that went into the impact of that particular increase. 

 

A recent bipartisan survey of over 800 economists from around the nation were asked, based on the information that is available, if they would support a minimum wage increase. Of these economists, 200 said they could support a $15.00 minimum wage while 600 said they could support $10.10 wage. Clearly this should not be a political game but there needs to be more research on the real impact of these numbers.

 

My company works with over 5,500 QSR and dining establishments in all 50 states. We work closely with this industry in our everyday life and have taken notice of certain trends. Here are the things we have seen in states that have instituted the $15.00 minimum wage:

  • Prices of products went up
  • Staff was reduced
  • Customer service declined
  • Higher rate of location closures
  • Higher rate of smaller (1-5 locations) franchisees went out of business or were forced to sell back to corporate.

 

 

Part of the study on the $10.10 rate estimated that we would see 100,000 jobs eliminated immediately and there was an estimate that it would be 5 times that (500,000) if it was a $15.00 rate. The QSR/Dining segment is one of the core institutions in our American culture. The partners I talk to day to day are scared to death of the $15.00 number but are also supportive of a more moderate minimum wage increase. Let the political banter end and lets make sure facts are driving these important decisions.

 

 

Mark Nazarenus
Mark Nazarenus is the President of ITech Digital. Mark is an experienced security professional that partners with organizations across the nation to design custom security solutions for industries like retail, restaurants, warehouse and commercial buildings, K-12 schools and colleges.
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