Automation is no longer a “someday” story. It’s already reshaping how businesses hire, schedule, and produce across industries, and restaurants are no exception. The question isn’t whether technology will change food service, but how rising minimum wages may accelerate that shift.
New research suggests that dynamic may already be underway, in part triggered by recent waves of minimum wage hikes. A recent working paper released by the National Bureau of Economic Research found that higher minimum wages historically have accelerated automation.
Using U.S. Census Bureau data and comparing manufacturers in neighboring counties across state borders with different wage laws, the researchers estimate that a $1 increase in the federal minimum wage could increase the likelihood of robot adoption by up to 11%. The study finds the effect could be greater for larger firms, but even for small “single-unit” businesses, minimum wage hikes contribute to adopting automation.
As wages rise in many parts of the country, this isn’t shocking, considering an EPI survey found that 86% of economists believe $15 or higher minimum wages cause increased adoption of automation.
Restaurants employ a large share of minimum wage earners, and have responded this way too. A Square platform survey found that 85% of restaurant operators said they were considering investing in automation to improve efficiency and streamline operations, while another survey found that nearly 70% have already adopted AI or plan to in 2026 to help manage rising costs.
When faced with rising labor costs, turning toward automation presents a cost-saving alternative: more predictable install and maintenance costs, as well as potentially enhanced speed and reliability.
In California, this trend has been widespread. Since California’s $20 fast-food wage was signed into law, the industry has reportedly lost nearly 20,000 jobs as restaurants grappled with a 25% wage hike and declining foot traffic after prices rose. An EPI survey shortly after the $20 wage went into place found 60% of California fast-food operators had either introduced or expected to introduce automation in response to the mandate.
As technology becomes more capable and labor costs continue to climb, the economic incentives for automation will only grow stronger. Employers respond to higher labor costs in many ways — raising prices, cutting hours, or rethinking how work gets done altogether. As automation becomes more attractive, that shift may mean fewer entry-level jobs and fewer opportunities for workers trying to gain a foothold in the labor market.