Restaurant owners in California are resorting to laying off employees 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 empowers a state-appointed council to set wages, working conditions and training standards for fast food restaurants. Businesses, particularly pizza joints that employ delivery drivers who can be replaced by outside services, are cutting employees in response to the state’s plan to hike its hourly minimum wage for fast food workers from $16 to $20 beginning April 1, according to the WSJ. (RELATED: Blue City Voters Reject Referendum That Would Hike Taxes To Fund Homeless Services)
Franchise owners of Pizza Hut and Round Table Pizza have already reported to the state that they will be laying off around 1,280 delivery drivers this year in preparation for the wage hike, according to the WSJ.
“This is the reality of today’s restaurants,” a spokeswoman for Fat Brands, owner of Round Table Pizza locations in California, told the WSJ. “Operators are doing their best to retain staff and keep doors open.”
California ranks dead last for job growth in US, the first time since 1993, per the Orange County Register: pic.twitter.com/5aGFDZU7Rw
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California had 726,000 fast food workers as of January, which is down 1.3% from last September, while total private employment fell 0.2% in that same time, according to the WSJ. Some California restaurants are turning to automation to adjust to the increase in the cost of labor, such as El Pollo Loco, which told investors that it would be automating some of the process for its salsa-making.
The wage hike has been embroiled in controversy due to an exemption in the law that permits chains that bake and sell stand-alone bread as a menu item, such as Panera, to not raise pay. Greg Flynn owns two dozen Panera chains in the state and gave over $160,000 to campaigns for Newsom.
“It pains me to think about shutting down stores or laying people off,” Alexander Johnson, who owns 10 Auntie Anne’s and Cinnabon restaurants in California, told the WSJ. “I love California, and I’m very sad about what’s going on.”
Johnson says the wage hike would raise labor costs by around $470,000, which has led him to reduce his staff by about 10 people, the WSJ reported.
The California governor’s office did not immediately respond to a request to comment from the Daily Caller News Foundation.
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