OAN’s Brooke Mallory
5:57 PM – Tuesday, March 26, 2024
Many California fast-food restaurants are now laying off employees and raising prices in anticipation of the significant negative impact the new $20 minimum wage law taking effect in April will have on food brands’ bottom lines. .
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according to wall street journalfast food restaurants, especially pizza chains, and even high-end food stores have begun cutting back on employees to prepare for the potential economic impact.
Michael Ojeda, 29, a Pizza Hut driver from Ontario, California, told reporters that Pizza Hut franchisee Southern California Pizza notified him in December that his last day of employment would be at the end of February. said.
“Pizza Hut was my career for almost 10 years, and with almost no warning, it was gone,” Ojeda said.
Several California-based Pizza Hut locations also announced last year that they would end delivery service to comply with the Worker Adjustment and Retraining Notification Act.
Southern California Pizza Company announced in December that it would lay off about 841 drivers across the state. Sources say Pizza Hut locations in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties will be most affected by the change.
“Even if some California franchisees choose to make staffing changes, access to delivery service will remain available through the Pizza Hut mobile app, website, and phone ordering, and customers will have a consistent ordering experience.” ” said a Pizza Hut spokesperson. he told reporters.
according to journal According to the article, Menlo Park, California-based Round Table Pizza announced that it will lay off at least 73 delivery drivers this year. Excalibur Pizza LLC similarly said that the majority of workers being laid off from the business will also be delivery drivers.
“The franchisee is transferring its delivery services to a third party. We are disappointed, but we consider this a relocation,” the statement said. “As you know, many restaurateurs in California are taking the same approach due to rising operating costs. We are also expanding our third-party delivery provider business, which requires additional staff. We anticipate that we will need it.”
Fat Brands Co., Ltd.Another major company, which owns restaurants such as , Johnny Rockets, Hot Dogs on a Stick, Fatburger, and Round Table Pizza, said the change would significantly increase shipping costs and generally reduce customer costs. He said prices could rise.
Brian Homme, who owns two Vitality Bowls restaurants in San Jose, Calif., said he only has two staff members at his restaurants instead of the usual four. Staffing shortages will cause customers to wait longer for service, and prices will rise to offset higher labor costs.
“I have no intention of hiring any more,” he told reporters.
Employees of fast food franchises with more than 60 locations in the U.S. will be affected by the wage law approved by Newsom.
Moreover, contrary to what critics claim, many of the employees at fast food companies are not simply teenagers working their first jobs. Many of them are hard-working mothers and fathers with mouths to feed, so being laid off from their jobs due to a statewide minimum wage increase is not ideal under any circumstances.
“Restaurants are struggling to stay above water, and Democrats just threw an anvil at them,” said James Gallagher, a California Republican staffer. “We warned Democrats that this new mandate would cost jobs. They ignored us, and here we are with the highest unemployment rate in the country and poised to get even worse.” is completed.”
Chain restaurants that bake and prepare bread on-site and sell it as a la carte items will be exempt from the new regulations.
“California is home to more than 500,000 fast food workers, who have fought for higher wages and better working conditions for decades. By giving fast food workers a strong voice and a seat at the table, we are one step closer to fairer wages, safer and healthier working conditions, and better training,” said Gov. Gavin Newsom (D-Calif.) ) said.
But Newsom failed to explain that a significant portion of these employees would be cut from the workforce, prices would begin to rise higher and higher, and many businesses would go out of business.
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