Good day all. As the year comes to a close, businesses are preparing for new laws and regulations allegedly designed to “Help” working Americans. One of these new laws was a massive increase in the minimum wage in the People’s Democratik Republik of Kalifornistan. It isn’t even in effect yet and it’s having the expected results.
What are these results? Businesses are already notifying employees that they are going to be laid off. Here are the details from the Business Insider:
Two Pizza Hut operators in California are eliminating their in-house delivery services at hundreds of stores, resulting in more than 1,200 driver layoffs, according to federal-employment notices reviewed by Business Insider.
The layoffs, effective throughout February, affect Pizza Hut delivery drivers across California, including at Sacramento, Palm Springs, and Los Angeles locations. The Pizza Hut franchisees are reducing staff as fast-food chains in the state brace for a new law that increases worker pay to $20 an hour in April.
“PacPizza, LLC, operating as Pizza Hut, has made a business decision to eliminate first-party delivery services and, as a result, the elimination of all delivery driver positions,” a federal WARN Act notice filed by the fast-food operator with the state’s Employment Development Department said.
The reason for the layoffs is simple. The costs of these government mandated pay raises will bankrupt the franchises. They would be forced to raise prices to the point where people simply couldn’t afford to buy their products. Going with a third party service, which charges fees that cover their costs is really their only choice.
Customers will have to rely on third-party delivery apps to get Pizza Hut delivered from these locations. Most Pizza Hut restaurants in the state work with third-party delivery apps, such as DoorDash, Uber Eats, and GrubHub.
I, personally, almost never order food delivery. Most of the places I go to are no more then 10-15 minutes away and I can either walk or drive to them. Even with the price of gas, it’s cheaper then paying a delivery service, and I don’t mind the time it takes for me to go there.
It’s unclear whether other Pizza Hut franchisees plan to scrap in-house delivery in California.
I would say it’s a good bet, or they start charging a lot more for deliveries.
Mark Kalinowski, a restaurant-industry analyst, wrote in a note this week that he expected “more harm to come” in various ways as fast-food chains “take action in an attempt to blunt the impact of higher labor costs.”
That action is going to be a lot more self service kiosks as well as higher costs for products. There comes a point where it’s cheaper to automate then to higher people to do the jobs.
Chains such as Chipotle and McDonald’s said they planned to pass the costs of higher wages in California to customers by raising menu prices.
There comes a point where people simply stop coming in, and we are rapidly reaching that point. Between Bidenflation and the epic stupidity of the Communists and Socialists in government, most of whom have never had a real job, let alone had to make payroll, businesses in places like Kalifornistan have given up and are either closing their doors or moving to states that are more business friendly.
In 2022, Gov. Gavin Newsom of California signed the FAST Act into law. It called for the minimum wage for fast-food workers to increase to $22 an hour in 2023. But corporate chains such as McDonald’s, Chipotle, Chick-fil-A, and franchise-advocacy groups fought the law. A coalition of restaurant-industry organizations said the law could raise costs for fast-food restaurants by $3 billion. They rallied to get a referendum on the ballot.
A new law, AB 1228, replaced the controversial FAST Act this year. The minimum-wage increase for fast-food workers was changed to $20 an hour. The new law was viewed as a compromise between the labor unions representing fast-food workers and the restaurant industry.
Unions, why am I not surprised? They have pretty much destroyed businesses in Kalifornistan, first with outlawing contracting and now this. I’m sure they’ve been telling all these workers “Look at the big pay hikes you’re getting thanks to the Union’s efforts.” What they won’t be telling them is that a lot of these people, especially teens in their first jobs, will be out of work or unable to find a job next year.
I don’t think the Ruling Political Class gives a damn though. These kids are to young to vote, or they don’t bother to vote if old enough. Sucking in the “Contributions” from the Unions is more important to them. Frankly, I think that the voters in Kalifornistan are getting what they deserve, good and hard. Enjoy!
Thatisall
(3 votes, average: 5.00 out of 5)
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