California restaurant owners are resorting to layoffs in preparation for a minimum wage hike for fast-food workers, according to the Wall Street Journal.
Democratic California Gov. Gavin Newsom signed a bill in 2022 that gives the state-appointed Legislature the power to set wages, working conditions and training standards for fast food restaurants. Businesses, especially pizza shops that employ delivery drivers who can be replaced by outside services, will cut staff in response to the state’s plan to increase the hourly minimum wage for fast food workers from $16 to $20 starting April 1. ing. according to In WSJ. (Related: Blue City voters reject referendum to raise taxes to help homeless people)
Pizza Hut and Round Table Pizza franchise owners have already reported to the state that they plan to lay off about 1,280 delivery drivers this year in preparation for wage increases, according to the Journal.
“This is the reality of restaurants today,” a spokesperson for Fat Brands, which operates Round Table Pizza in California, told the Journal. “Operators are doing their best to maintain staff and keep their doors open.”
California ranks last in the nation in job growth for the first time since 1993, according to the Orange County Register. pic.twitter.com/5aGFDZU7Rw
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According to WSJ, the number of fast food workers in California was 726,000 as of January, down 1.3% from September of last year, and total private sector employment was down 0.2% over the same period. Some California restaurants, such as El Pollo Loco, are turning to automation to cope with rising labor costs, but the company told investors it will automate some of its salsa-making processes. .
Wage hikes have been embroiled in controversy due to an exception to the law that allows chains such as Panera that bake and sell individual breads as part of their menu items not to raise wages. Greg Flynn owns 24 Panera chains in the state and has donated more than $160,000 to Newsom’s campaign.
“It breaks my heart to think about closing stores and laying off employees,” Alexander Johnson, owner of 10 Auntie Anne’s and Cinnabon restaurants in California, told the Journal. “I love California, and I’m so disappointed in what’s going on.”
According to the WSJ report, Johnson said the pay increase would increase payroll costs by about $470,000, leading to the decision to cut about 10 employees.
The California Governor’s Office did not immediately respond to a request for comment from the Daily Caller News Foundation.
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