In a recent announcement, Rubio’s Coastal Grill has decided to close 48 of its locations in California due to the increasing cost of doing business in the state. According to a spokesperson for the company, this decision is part of their long-term strategic plan to ensure the success of Rubio’s in the future.
Out of these 48 closures, a third of Rubio’s restaurants in California, Nevada, and Arizona will be affected. Los Angeles will see 24 locations shut down, with 13 locations in San Diego and 11 in Northern California also closing. The spike in minimum wage from $16 to $20 an hour has contributed significantly to the financial burden on Rubio’s, which had previously filed for bankruptcy in 2020.
The impact of higher minimum wages can lead to significant job losses, especially when there are sudden, substantial increases like the jump from $16 to $20. UCLA economist Brian Wheaton warns that companies like Rubio’s, already facing financial challenges, are more susceptible to increased costs. It is uncertain how many workers will lose their jobs as a result of these closures. However, it is clear that this trend of fast food workers losing their jobs in California has been on the rise, with approximately 10,000 job losses in the last nine months alone.
Despite these challenges, Rubio’s remains committed to providing great food and service to their customers at their remaining 86 locations in California. The company’s decision to close these locations is a difficult but necessary step towards navigating the financial challenges caused by rising costs of doing business in California.
