With a new California law that raises the minimum wage to $20 an hour about to take effect, employees across the state are beginning to get their pink slips.
A number of restaurants in the state, especially pizza parlors, are carrying out plans to cut hundreds of jobs ahead of the April 1 start of the wage hike, The Wall Street Journal reports.
Some pizza-chain operators in California are laying off drivers ahead of the wage law’s start and farming out delivery service to apps. Franchisees for Pizza Hut and Round Table Pizza, a chain of around 400 units founded in Menlo Park, Calif., have said they plan to lay off around 1,280 delivery drivers this year, according to records that major employers must submit to the state before large layoffs.
In San Jose, Brian Hom, owner of two Vitality Bowls restaurants, now runs his stores with two employees, versus four workers that he typically used in the past. That means it takes longer to make customers’ açaí bowls and other orders, and Hom said he is also raising prices by around 10% to help cover the increased labor costs.
“I’m definitely not going to hire anymore,” he said. (WSJ)
Other restaurant operators in the state are looking at the options available to them to address the wage hike, including cutting hours, closing during slow hours, and simplifying menu items. Some who would have looked at expanding their operations in the state have decided against doing so, while automation is being tested by certain chains as well.
“I can’t charge $20 for Happy Meals. I’m leaving no stones unturned,” Scott Rodrick, owner of 18 McDonald’s restaurants in the state, told WSJ.
Critics were not surprised.
It’s almost like those with an understanding of basic economics said this would happen.
— CA_Underground (@CAUndergound) March 25, 2024
Who could have predicted such a thing? Of course, now more people are dependent on government, which is what Democrats want, so it's "win-win" for them. https://t.co/szzGEG0aPI
— Derek Hunter (@derekahunter) March 25, 2024
The unintended consequence of minimum wage laws is that it hurts minimum wage workers by eliminating the very jobs they need. It cuts the hours of those already working. And consumers end up paying more for the same products. It is destructive policy that hurts more than it… https://t.co/8fnuBP6BfE
— Patricia Morgan (@repmorgan) March 25, 2024