Rubio’s Coastal Grill, a popular restaurant chain known for their fish tacos, has recently announced the closure of 48 locations in California due to the rising cost of doing business in the state. A spokesperson for Rubio’s stated that the closures were necessary as part of a long-term plan to position the company for success in the future.
Of the 48 locations being closed, 24 are in the Los Angeles area, 13 are in San Diego, and 11 are in Northern California. This decision has disappointed many residents who enjoy Rubio’s “Fresh Mex” style of food. The increase in minimum wage from $16 to $20 an hour, along with the company filing for bankruptcy in 2020, has made it challenging for Rubio’s to continue operations.
UCLA economist Brian Wheaton explains that Rubio’s is particularly vulnerable to increased costs, which can push struggling businesses over the edge. The company has not disclosed the number of employees losing their jobs due to the closures. Unfortunately, this trend is not isolated, as approximately 10,000 fast food workers in California have lost their jobs in the past nine months.
Wheaton highlights the negative impacts of significant minimum wage increases, like the jump from $16 to $20, which can lead to larger disemployment effects. Despite the closures, 86 Rubio’s locations are expected to remain open in California. The company aims to navigate these challenges strategically to ensure its long-term success.