Pizza Hut franchises in California have announced plans to lay off over 1,200 delivery drivers in anticipation of a new state law that will raise the minimum wage to $20 per hour by 2024. This move, taken by PacPizza in San Ramon and Southern California Pizza Co., is an unfortunate consequence of misguided government policies that fail to consider the full impact on businesses and their employees.
According to regulatory filings, PacPizza plans to eliminate its first-party delivery services starting in February, while Southern California Pizza Co. will lay off 841 salaried drivers. This will mean that customers at these Pizza Hut locations will have to rely on third-party delivery apps like GrubHub, DoorDash, and Uber Eats to receive their orders. This not only puts the drivers at risk of losing their jobs, but it also presents a major inconvenience for customers who have grown accustomed to the convenience of direct delivery.
The new law, known as AB1228, will affect approximately 557,000 fast-food workers at 30,000 restaurants in California. While it might sound like a well-intentioned effort to improve the lives of hard-working individuals, the reality is that it will have unintended consequences. By forcing businesses to pay significantly higher wages, the law will likely result in layoffs and reduced hours for many employees, making it harder for them to make ends meet.
Moreover, the law is set to increase the minimum wage to $20 an hour in April, with the potential for further increases up to 3.5% annually through 2029. This will likely lead to even more job cuts and business closures as companies struggle to keep up with the escalating labor costs.
And it’s not just Pizza Hut that will be affected; major chains like McDonald’s, Chipotle, and Chick-fil-A have already stated their plans to raise menu prices to offset the higher operating costs brought on by the new law.
As a result, many hard-working individuals will lose their jobs, while others will have to deal with increased prices and reduced hours. The government should not be in the business of setting wages for private companies, as it often leads to unintended consequences such as what we are seeing with the Pizza Hut franchises in California.
Layoffs in California’s fast-food industry? Never saw that one coming said no one ever.
California’s Fast-Food Casualties
Pizza Hut drivers are early victims of the new $20 minimum wage.https://t.co/tlFmakksz2— Al Tournas 🇺🇸🇮🇱⚓️🏌️♂️⛷ (@altournas) December 29, 2023
It’s important to note that Pizza Hut who is owned by Yum! Brands has stated that its franchisees independently own and operate their restaurants and comply with all federal, state, and local regulations. This further highlights the need for policymakers to listen to the concerns of businesses and their employees before implementing sweeping changes that will inevitably have negative effects.
The news of Pizza Hut franchises in California laying off over 1,200 delivery drivers is a stark reminder of the unintended consequences that often arise when the government tries to intervene in the economy. This unfortunate situation could have been avoided if policymakers had listened to the concerns of businesses and their employees before passing the new law.
