The minimum wage for fast food workers in California will increase on April 1st, 2024. Since most of the blog staff live out here, we witnessed the masses cheering this revelation on. They will finally be able to get their own apartments, buy nicer things, and not have the massive credit card/overdraft debt. While this sounded great, the joke was on the workers once again. Yesterday the big news out of southern California was several major Pizza Hut chains fired all their delivery drivers. Yup, every single driver at these franchised stores got a nice New Year’s gift.
Rather than pay delivery drivers $20 an hour — under a new California law set to go into effect in April 1, 2024 — Pizza Hut franchisees in Sacramento and elsewhere in the state are laying them all off.
The franchisees, one of which operates restaurants in the Sacramento area, are letting go more than 1,200 delivery drivers across the state, according to Business Insider, which reviewed a federal Worker Adjustment and Retraining Notification Act document filed with the state Employment Development Department.Pizza Huts in California, including Sacramento, laying off drivers rather than pay $20 minimum wage
So, are the stores going to be takeout only? I don’t think so, pizza is synonymous with a delivery driver, so they will all likely be contracting through Uber Eats, Door Dash or Grub hub. In all three cases they will not be fast food employees and as such not subject to the $20 an hour wage.
This is the problem with liberal, hive mind, groupthink. Let’s give everyone a raise and all will be well in the world, folks will not be in poverty. It is going to have the opposite effect. These workers laid off will be making a low wage, plus a possibility of a tip as a delivery driver for a third-party company. They will be responsible for the wear and tear, insurance, and gas, while hoping for tips to balance it out. More on this in a moment.
The prices will increase, so sticking with Pizza Hut; your $12 pizza will now be $17. This makes you less likely to tip your delivery driver, who as pointed out above won’t be partaking in the increase in wages. Sticking with this theme, do you think the franchisee will eat the increased costs? No chance. There will be a headcount reduction in workers as well. What may take 4 to cover a dinner shift, will likely be reduced to three. There will be increased ordering off an app or self-serve kiosk, as this will help reduce head count as well. No one needing to work the till means a savings.
The price increases elsewhere will more than offset the increase in the minimum wage. Folks a sandwich I got at Jersey Mikes today is listed on the menu board for $11.85, this is prior to any real minimum wage effect on the sub. There will be increased costs at gas stations, grocery stores, and you better bet rent will be going up. The rising tide doesn’t lift the boats, it just shows which ones are taking on water.
Some of the employees in the store will be flushed out of society. It’s sad but inside you know it’s true as well. At the local Burger King I visit when I make bad life decisions, like forgetting lunch at work, the majority of the employees appear to not give a rip. No chance those folks are kept around making $20 an hour, along with the increased menu prices. The consumer will demand more, and the franchisee will expect it. Those in this group will be part of the unemployable class. Same goes for folks who didn’t finish high school, you will be deemed not worth the cost of employability. Looking to make some extra cash over the summer or winter during your school break? Not going to happen, as the cost of onboarding and off boarding you will be too much.
The cold-hearted truth is these positions were created for high school and college aged kids, a resume builder for someone who didn’t want to go to college, criminals exiting the “system” and folks who may be a little on the spectrum. Those people will now have no chance. Wait and watch as this will raise wages at all other jobs too; the health club, the spa, the grocer, the gas station. Again, the workers at the lowest level will be frozen out.
This is called Liberalism 101. Do the thing that feels good, ignore any chance it could backfire and when it does, double and triple down hoping for a different outcome.