Thousands of fast-food workers jobless as Cali’s $20 minimum wage kicks in

In the wake of a significant minimum wage increase in California, fast food establishments are adjusting their workforce, with many employees facing layoffs. The new legislation, which Governor Gavin Newsom enacted, raises the minimum wage to $20 for fast-food workers in chains with over 60 locations nationally. This change, supported by labor unions and the healthcare sector, is anticipated to impact a broad swath of the industry starting next week.

Notably affected are pizza chains, with reports from The Wall Street Journal highlighting that numerous restaurants are not only laying off staff but also reducing work hours and pausing new hires. Pizza Hut, for example, has already announced the dismissal of over a thousand delivery drivers, a move echoed by other franchises within the state. These businesses are responding to the increased wage costs by altering their delivery models, including shifting to third-party delivery services.

Parham Barati, Unsplash.

The law, encompassing a wide range of fast food establishments, does not offer exemptions, even for businesses specializing in items like ice cream, coffee, or donuts. This comprehensive approach has prompted companies such as Chipotle and Starbucks to reevaluate their pricing and compensation strategies to maintain operational sustainability in light of the rising labor costs.

Starbucks, for instance, emphasizes its commitment to enhancing employee benefits and overall compensation, which averages $30 per hour when factoring in benefits, underscoring the company’s philosophy that shared success extends to all its partners.

As these adjustments take place, the implications of the new minimum wage law continue to unfold, impacting not only the businesses and their employees but also potentially the prices consumers will pay for fast food services in California.

1 thought on “Thousands of fast-food workers jobless as Cali’s $20 minimum wage kicks in”

  1. Elections have consequences. Californians had a chance to recall this radical leftist governor but they blew it, now they can deal with the fallout.

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