Layoffs begin after California raises fast food minimum wage

Pizza Hut and other fast food companies are set to lay off a significant number of workers after Gavin Newsom signed a new law in California that raises the minimum wage to $20/hour for fast food companies.

According to CBS News, Pizza Hut will lay off around 1,200 delivery drives and Southern California Pizza Co. will be laying off 841 delivery drivers.

Here’s more on the layoffs:

Pizza Hut is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour.

The law, known as Assembly Bill 1228, was introduced by Assemblyman Chris Holden, D-Pasadena, and signed into law in September by Gov. Gavin Newsom.

Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries.

A second Pizza Hut franchise, Southern California Pizza Co., is also planning to lay off 841 drivers. The layoffs will impact drivers in Pizza Hut locations in Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon, the Reno-Tahoe area, among others.

Yum! Brands, which owns Pizza Hut and other fast food companies such as Taco Bell and KFC, did not immediately respond to a request for comment.

Not all companies can just lay off a ton of workers. McDonald’s and Chipotle will be forced to raise the menu prices to cover the increase:

It was previously reported that other food chains such as Chipotle and McDonald’s said they planned to raise menu prices as a way to offset the costs of higher wages in California.

Following the law’s passing, Holden in a statement said the pay increase will help workers feed their children, keep gas in their vehicles, and improve the quality of life of many.

In addition to raising the minimum wage for fast food workers to $20 an hour — it will also establish a Fast Food Council, representing a path forward to resolve employer community concerns while preserving fast food workers by securing a seat at the table to raise standards, according to Holden’s office.

AB 1228 will impact more than 550,000 fast food workers and about 30,000 restaurants in the state.

Hope Californians will enjoy paying a lot more money for those Big Macs and nuggets. As if prices aren’t high enough in the state already.

High Plains Pundit

News and commentary with a dose of much needed common sense.

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