Mass Layoffs, Increased Prices Occur Ahead Of California Minimum Wage Hike

Just as Republicans predicted, California’s shocking minimum wage increase has prompted businesses to initiate mass layoffs and raise their prices — as companies cannot afford to keep as many employees or maintain the current prices with such a massive increase in their costs.

California’s minimum wage was $15.50 in 2023 and increased to $16 on Jan. 1, 2024. The new law will take effect in April, increasing the minimum wage to $20, a 25% increase.

In response to this impending increase in their costs, fast food restaurants have begun firing employees and raising prices, according to a report from The Wall Street Journal, which noted that pizza chains are making the most cuts. The outlet also reported that higher-end food establishments have even begun reducing their staff in preparation for the wage increases.

One Pizza Hut driver, 29-year-old Michael Ojeda of Ontario, California, spoke with the press about his employment termination — explaining that he had been informed in December that his last day of work would be at the end of February.

“Pizza Hut was my career for nearly a decade, and with little to no notice, it was taken away,” said Ojeda, who was employed by Pizza Hut franchisee Southern California Pizza.

Many California-based Pizza Hut locations have completely shut down their delivery services thanks to the new law. According to a December statement from Southern California Pizza Co., the franchisee planned to lay off around 841 drivers statewide.

The Wall Street Journal also reported that Round Table Pizza, which is based in Melo Park, California, will be firing at least 73 delivery drivers this year. Excalibur Pizza LLC also confirmed that the majority of workers being laid off from its business would be delivery drivers.

“The franchisee is transferring their delivery services to a third party. While it is unfortunate, we look at this as a transfer of jobs,” the statement said. “As you know, many California restaurant operators are following the same approach due to rising operating costs. We anticipate third-party delivery providers in turn will see a boost in their businesses, which will require additional staff on their end.”

Fat Brands Inc. — which owns restaurants such as Johnny Rockets, Hot Dog On A Stick, Fatburger and Round Table Pizza — noted that price increases and higher delivery costs will result from this new law.

Brian Hom, owner of two Vitality Bowls restaurants in San Jose, California, reported cutting down his staffing from four people to just two — noting that customers will have longer wait times and higher prices to offset the business’ higher labor costs.

“I’m definitely not going to hire anymore,” Hom told reporters.

Republicans have long been speaking out about the effects of artificially inflating wages, including California Assemblyman James Gallagher (R).

“Restaurants are struggling to stay above water, and Democrats just threw them an anvil,” Gallagher said. “We warned Democrats this new mandate would cost jobs. They ignored us, and here we are with the highest unemployment rate in the country, poised to get even worse.”

Meanwhile, California Gov. Gavin Newsom (D) has celebrated the new law, ignoring the fact that it will result in a massive increase in unemployment and potential small business closures.

“California is home to more than 500,000 fast-food workers who, for decades, have been fighting for higher wages and better working conditions. Today, we take one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table,” the far-left governor said.

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