For months, things have continued to go from bad to worse for fast food companies and their employees in California. Following the signing of AB 1228 in October by Governor Gavin Newsom, the new $20 minimum wage for fast food employees, a massive jump from the $16 minimum wage, has had multiple companies take extreme measures.
Some, like Chipotle and McDonalds, have announced already raised prices before the wage raise date of April 1st. Others are investing in automated kiosks and other automated devices to help reduce the number of employees. Some stores outright closed. Most notable, however, has been the massive amount of layoffs. Already, over 1,200 Pizza Hut drivers have had announced lay-offs, with drivers to be replaced by services such as DoorDash and Uber Eats in the coming months. Many other chains are currently also looking into doing the same for deliveries.
The Globe spoke with several of the affected drivers on Tuesday about the layoffs and what the new $20 minimum wage law means for them now.
“When that minimum wage law was passed, I just sort of knew about it,” said Jose, a Pizza Hut driver in L.A.
“We all did,” added “Jim,” a co-worker of Jose’s who wished to remain anonymous. “There were a few people really for it, but they got quiet about it around the managers. The managers, and the big boss who came by, they didn’t speak too often about it, but the few times they did, they said something like “It’s going to be hard to keep you all on board”. Before it was even a law, they knew something bad was going to happen.”
Both said that they were scared for months.
“I came to LA 15 years ago, and I’ve been trying to keep my head above water ever since,” continued Jose. “I’ve had to worry about legal status, getting married, the recession, having kids, keeping our house. This, this new minimum wage, I thought it would finally be something good. Tipping has gone down in the past few years since everywhere is demanding tips now, and this would have gone a long way.”
“Scared? Yes,” said Jim. “Management were increasing their doom saying after the bill was signed. There was a rumor that drivers wouldn’t even be needed anymore. At first, I didn’t believe that. But in the weeks before the official announcement, it started getting real. I actually had a few small panic attacks about it. You know, what was I going to do and all.”
But when the day came, the blame didn’t go the way most thought it would.
The firings caused by AB 1228
“At first, I was so pissed off at management,” added Jim. “They gave the word, the corporate company that runs these stores, and I really lashed out at them. But then my dad explained the dollars and cents about it. These stores would need to pay a higher wage without any more income coming in. I was still very mad, still am, but I saw how this wasn’t, like, corporate greed or anything. They were just getting squeezed. And being nervous was passed down to the kitchen, who is now fearing layoffs now too I should add.”
“I, as well as pretty much everyone else here, is blaming whoever wrote that law or bill or whatever. There are a few who are saying that Pizza Hut is doing this out of greed or that they could have cut costs elsewhere, but most are like maybe this went up way too fast. Some workers benefit, others are now out of a job. So the guy who wrote it, [Assemblyman] Chris Holden (D-Pasadena), as well as anyone else who thought this was a good idea. Great job. We hate you forever now. I’d say some other things, but I don’t think you can print them. But really, great Christmas gift guys. I hope you get the same in November.”
Jose had a different point of view.
“I am mad, but I am more worried right now. I have a wife, a family. I want to work and I need to work. Delivering pizzas wasn’t glamorous. You know, you think of having a job in California, pizza delivery man isn’t one to impress exactly. But there is dignity to it. I like driving the streets of LA in our area at night, seeing the light of downtown in the distance. I like delivering pizzas to people and asking the score, in English and in Spanish. During the pandemic, we were a lifeline to some people.”
“I guess I blame the person who wrote it, but I want to tell them who they are hurting. People with families, like me. Kids out of college trying to make ends meet. People looking for a better life here and sending money back home to help their family. People burnt out on life trying to make a second chance. This is a side hustle to many too, making ends meet.”
“To the people who think this is helping people out. It is only helping some out. There are many more being left behind because of you, because you thought this was the right thing. And we thought it was too for awhile. You helped some, but made life horrible for others. They need to know this.”
More lay-offs caused by the higher minimum wage are expected to be announced in the coming months in the leadup to the $20 minimum wage for fast food worker raise on April 1st.
View Comments (82)
The left is in an all out war on the little guy while pretending to be their pal. $20 is not much at all when you don't have a job. There is another element to this and that is the war on restaurants and affordable food for the middle class. The French Laundry could pay $50 an hour without raising prices one cent.
Let's not forget that those left making $20 an hour now have to do more work and it may not be worth it to them to maintain employment, especially if it is a second job. When other people get laid off, the amount of work does not decrease.
I noticed today that the only fast food joint in our county just closed. Windows boarded up and fenced off. Coincidence I am sure. ;)
All you people are Nuts, don't you realize that McDonald's alone made over 22 billion dollars in revenue. And you're telling me 20 bucks an hour's gonna to kill them, Get out of here. This is all a bunch of whining bullcrap from rich people losing some of their rich. And that's all it is.
Mike, Revenue does not translate to profits, While the revenue has not increased, the costs are skyrocketing leaving reduced profits. Labor is a very significant part of fast food costs and it just went up by 25% which will certainly reduce profits by a larger percentage than the increase. This will leave few choices for franchise owners other than to figure out how to do the work with the same mount of costs. What that means is that it will have a 33% impact on the number of people that work for those companies in California. yes 33% less people and they will accomplish it with automation and increased expectations from employees that remain. It doesn’t work the way you think it does.
The ONLY way 20 bucks an hour works is if ALL McDonald's were corporately owned AND they were willing to dip into their profit margin to pay the difference. However, McDonald's are mainly owned by franchisees. Unfortunately, restaurants, in general, operate on very thin margins. I've been a server in both family-style and fine dining restaurants. I've seen the prices-per-dish versus my individual sales. Several managers even let me see the bigger revenue picture at their establishments.
Example of thin profit margins: Dos Caminos, S. Park Ave b/t 26th & 27th in NYC, was housed in a Giant building in 2018; that site is closed now. They mainly made their profits selling tacos and margaritas. Their rent: SIXTY THOUSAND DOLLARS A MONTH..... that's A LOT of tacos to sell just to pay that MONTHLY bill. But every month, they had to buy food, pay workers, pay water, pay trash, pay electricity, too.
Mike, try starting your own business, and pay self employment taxes, federal taxes on your profit and net income, health care, dental care, etc to your full time employees, pay the city and state unemployment taxes and license fees, property taxes on the building you own, or rent if leasing, electricity at 36 cents a kilowatt hour (Yea California!) and keep up with California's 15% state income tax on those self employed making the big bucks. I think you would change your tune real quick!! Well, at least business owners in Cuba can live in poverty by the wages set by the Politburo, yea!
You are wrong, based on the news today, there could be 20,000 + layoffs, machines replacing people, higher unemployment, small businesses closing. The Governor is a real hero who needs to feel the pain of small businesses closing and hurting other people. Happy meals are unhappy meals!!!
Yeah but that’s the problem the didn’t specify the money had to be paid from the corporate profits and ceo wages, and since they want to keep those profits they’re just going make the customers pay it and raise prices and fire employees. Theres no way they’ll cut profits or ceo wages.
Beloved "bakery to the stars," Sweet Lady Jane, several locations throughout the L.A. area, with plans to expand to other locations, closed unexpectedly December 31 after 35 years. Hope the L.A. lib/leftists who are "devastated" by the unexpected closure of this bakery and want to "do something" (to 'undo' the closure) make the connection. Not holding my breath though:
https://www.foxla.com/news/sweet-lady-jane-dessert-shop-closure
I neglected to say before that I really admire what reporter Evan Symon did here. By going to those affected by the fallout, who were surprised by what happened, he made this issue tangible and completely understandable to readers. Something these workers thought would be a good thing went south in a big way. They've been had, they've been lied to, and with any luck because of it maybe they will learn an important lesson about the pitfalls of Marxist B.S.
I've been thinking a lot lately about the pride that people take in their work, no matter what they do, and how important it is. From Evan Symon's article we see that the guy who delivers pizza took pride in his work too and realized that he was doing something important for people, especially during the fake pandemic. Asm Chris Holden and his ilk don't understand this. It's all about money for them. I'm not even sure Holden understands about Marxism; to me he is a pompous bag of wind and not very bright, but he is a Marxist, whether he knows it or not. All he apparently understands is that he gets big donations from the unions and he does what they say if he wants to keep his seat in that useless state legislature. And in his district, I have no doubt that attempts to raise the minimum wage win him votes from those who don't understand how harmful this sort of legislation is to them. To add insult to injury, I'm confident Chris Holden KNOWS they don't understand it.
I was thinking about all that is lost to the worker because of this nonsense. A job, valuable experience dealing with one's co-workers and with the public, a dose of reality, pride in one's work ---- the list goes on and on. There are some who work in the restaurant (and other) business because they hope to one day open their own restaurant or business. What is the good advice typically given to these ambitious people? Work in a restaurant (or other business), learn every aspect of it backwards and forwards and upside down to prepare yourself. Forget about culinary school, learn the thing hands-on. This way one gets an education and is paid for it too. Even if it isn't with a "living wage."
Now that a long-time business such as bakery Sweet Lady Jane is no more after 35 years of a fine (and beautiful) product and happy customers, there will be fewer outlets in the L.A. area for someone to learn the bakery business from a top-of-the-line store should they have the dream and the ambition to open one of their own. Plus, how fun and satisfying would it be to work in a bakery and participate in creating something of beauty that customers love and think is delicious and can present to their friends and loved ones with pride and happiness. It's hard work and you're up early and on your feet all day, but so what?
Thanks a lot, Chris Holden, good job. You've stolen someone's dream on top of everything else. Happy now?
The minimum wage, no matter what any government says, is zero.
Good point.
couldnt agree more
have you guys check the profit those companies made last year? and the salary of their c e o ?
Radio dude Tom Sullivan said, decades ago when he was a Sacramento local guy, that most of the members of the California State Legislature are not very bright and that this political gig was the best thing to ever happen to them; otherwise they'd be inquiring if you'd like frys with that burger (not to disparage our fast food worker brethren, but the legislators would likely be the moron/screw-up/braggart crewmember you all hated).
Again, I salute you and AGREE 1000% with all you said! I'm a thinking there are Thousands of Californians who would agree with you! My real confusion continues to be WHY DO SO MANY CALIFORNIANS CONTINUE TO VOTE FOR THOSE EMBICILES? They must not be aware of a definition of INSANITY, which is DOING THE SAME THING OVER AND OVER, EXPECTING DIFFERENT RESULTS! Does that prove most Californians are INSANE? What else could it possibly be, HA!? I seriously want...to...know!!!! Who, in their RIGHT mind would keep VOTING for the party that is destroying them and their quality of life? And no, doing it out of habit doesn't count! The only thing I think it could be then, and that is TRULY sad to me, is that they have so much hatred in their hearts, and brains, they can't see past it to MAKE THE CHANGE FOR A MUCH BETTER FUTURE! And EVERYONE KNOWS WHAT I'M GETTING AT! I personally don't vote party lines, I VOTE for who's going to do the best job for me, my state, my country, and my family and friends! AND IT SURE ISN'T THIS CURRENT DEMOCRAT PARTY! SHAME ON THEM! THEY AREN'T LIKE THEY USED TO BE, THAT'S WHY I, AND EVERYONE WE KNOW, WILL NOT VOTE DEMOCRAT AGAIN! OPEN YOUR EYES, PEOPLE! THEY'RE NOW JUST THE PARTY OF ISH! SHAME ON THEM! DO THE 'RIGHT' THING, NOT THE 'LEFT' THING!
They keep voting for the Devil they know because they are afraid that the other choice will be worse.
Great commentary. Spot on.
Disgusting
Kempczinski, who took the helm of the Chicago-based company in late 2019, was paid almost $17.8 million in cash, stock and options awards in 2022, down from the $20 million he made the year prior, according to McDonald's proxy statement, filed last week with the U.S. Securities and Exchange Commission.Apr 18, 2023
please the poor things!!!!
Kempczinski, who took the helm of the Chicago-based company in late 2019, was paid almost $17.8 million in cash, stock and options awards in 2022, down from the $20 million he made the year prior, according to McDonald's proxy statement, filed last week with the U.S. Securities and Exchange Commission.Apr 18, 2023
please poor things !!!
McDonald's annual net income for 2023 was $8.469B, a 37.09% increase from 2022. McDonald's annual net income for 2022 was $6.177B, a 18.13% decline from 2021.
They weren't even part of the new law lol. You have to have over 60 locations to have to pay $20.
This is just fear mongering at its finest
$20 becomes the new minimum wage for all businesses in CA as the result of this act. And it is the lowest paid wage earners who now have to pay a larger percentage of their income for everything they buy. Plus future wage increases are built in by the act . In a hyperinflation scenario, probably to arrive around 2030-2032, the fast food workers will be unable to keep up with inflation. Supermarkets will benefit. And what is this BS about an exception for fast food businesses that make and sell their own bread?
Of course they will read your comment and continue to say it’s the democrats fault.
Great. Now landlords just get to charge more for rent. Why don't we attack the real root cause of why working families are struggling in California: lack of affordable housing due to regulatory gridlocks and stiff zoning laws.
Well, keep voting for the Marxists and California will soon join the happy citizens of North Korea, Russia, Iran, Cuba, Zimabwe, Vietnam and Cambodia. Yes, let's celebrate the new Democratic Party!! At least they have first rate healtcare, high wages and a government that truly cares for its citizens!
"...you helped some, but made life horrible for others. They need to know this.”
As if THEY cared one hoot. Nah, they got their name in the paper...the publicity that "look, I DID something!" is all THEY care about. You ain't schiff to a democrat.
The Democratic Party hates small businesses and wants everyone to work for the government., or be on welfare for life. Why not? The Federal Reserve can print dollars out of thin air, and give its citizens and excellent standard of living. A utopia!
$20 minimum wage for fast food work is part of a multi-pronged approach to make private California businesses and middle class workers fail. Legalizing shoplifting and other crime is another prong. Decriminalizing drugs was another, which lead to the homeless crisis. California water policy is hurting farmers, ranchers and overall agriculture in California. If someone wanted to drive productive people out of California, all these prongs would be the way to do it. People without financial means or employment skills to move will be stuck in California and used as sIave labor. This is being done so that China can move into California and take over businesses, agricultural land and production... everything. Because California politicians sold out to China.
We get what the elite CaliCommiecrats tell their masses of uneducated constituents to vote for, over and over and over again.
Perfectly said! Glad I'm old when I see what's happening! No grandkids to stress over! What the HELL kind of World will the future hold for all these young kids? This Country is becoming a huge JOKE to the Strong Countries of the World, think they aren't just waiting for the right time? Things are starting to implode here - and - it's ALL on the DEMONRATS! ALL OF IT! 100%! Ever wonder why they choose that name to represent them? (democrats) Just swap out the 'c' and insert 'n'......thought no one would notice, huh? DEMONRATS! those 2 letters than represent the words 'N'ever 'C'hrist! Mull on that!
Sounds like decades long one party rule in the once great Golden State needs to change. Let's bring in some conservatives next election and turn things around! After all, are not some of the grateful citizens of the most populous state now heading to GOP led states for lower taxes, less crime and homelessness, and regulations? What gives?
Brought to you, once again, by the democrat party.
The politicians do not seem understand economics and how the free market works. You cannot artificially increase wages on private companies and not expect layoffs and or price increases. The next stupid thing they will do is legislate that a private company can’t lay off people because the minimum wage goes up, or the state will sue the companies for laying off people (sarc.). This minimum wage increase will also be the hook to get unions like SEIU to organize and suck some of the employees wages for dues. This fills SEIU pockets which in turn kicks some of that money back to the politicians in donations. Then the employees will be upset when all of a sudden they are in a higher tax bracket. An insidious domino effect is going to happen. Vote the democrats out of office. Their policies are nothing but harmful to the people. I say democrats because they have been in control and running everything into the ground in California for decades. We need a change back to normalcy in California.
What do we have to lose? We are already losing our rights and liberties being regulated to the nth degree. The political elite treat us like a piggy bank (as of this month MediCal for just about every illegal alien in CA at over $2 billion a year in our taxpayer dollars will take effect) and serfs. Remember, the elected people work for us. It is we the people who give consent to be governed. They need to be reminded of this.
Fran, elections have consequences! Let's bring in the GOP again at the next elections like in the 60s - 80's when the Golden State was livable, and maybe things will turn around!
These far-right troll bots slinging nonsensical dog whistle words in the responses, are so "2023".
"More lay-offs caused by the higher minimum wage are expected" is a deceptive simplification. This article takes a lazy broad stroke at a complex issue.
As of 2024, $20 an hour (before taxes, insurance, 401k) in California is not enough to be called a livable wage considering the cost of housing, food, utilities, etc. This housing crisis is not a Democrat issue, or a "left" issue, it's a Capitalism/greed issue. It has been worsening since the great recession, exacerbated by issues such as rising housing costs, increased demand, and supply chain shortages affecting the construction of new homes. Logic is defined by the facts within.
Fast food companies in California can afford to pay $20 an hour in 2024, mainly because they operate on a large scale, which makes them more efficient and profitable. I'm not going to post all the food-to-cost ratio stats. Technology improvements have also made their employees more productive, allowing the companies to earn more per worker. Plus, we are not far off from automated robotic kitchens, and cashiers are already being replaced by automated kiosks. What is the chance these major fast food chains will lower the prices when they do not need to pay the workers?
Lastly, this growing expectation for businesses to be socially responsible, and pay fair wages is a good thing. The numbers do not lie. As of 2023, California maintained its position as the leading state economy in the U.S., with a GDP of about $3.8 trillion, representing 14.4% of the national economy. When the cost of living goes up, the wages should follow. When you fail to pay a fair wage, Unions and wage increase laws become necessary. Because, when hard workers earn a decent wage, they spend more in that economy.
Love to see the school of economics you went to. I didn't, but I understand 2 things you don't mention;
- law of supply and demand (whether cap/marx).
- Interest rate increases have kept ppl with low the rates in place - you have a strong demand, lack of supply, prices increase. HUGE part of the supply issues, local/state regs.
well, as interest increases, cost of goods increase, even labour. There is a balance sheet for everything in life.
basic Econ 101. Oh that's right, they don't teach that anymore, just DEI and body mutilation.
working in fast food takes minimum skills and should be paid as such. it is not suppose to be livable wage or a long career. these are jobs for high schoolers or someone that's trying to make ends meet. restaurant will pass these labor cost to consumers. get ready for a $25 big Mac soon..
You must work for cnn
One day you'll mature and understand how the real world works. One day.
So SAD to see that this world is full of Jesus Hating GOD denying Anti- CHRISTS who gleefully sacrifice other persons' well being to satiate their own childish fettishes. GOD lovers live to Self-SACRIFICE for the benefit of Others. And as I do sorely Despise your kind of AntiGOD-Think, I do sincerely HOPE, (not being able to PRAY for willful FOOLS) that your 'willfully ignorant kind' will turn and begin LISTENING to GOD's Voice in your soul, your CONSCIENCE. Howbeit, GOD does CLAIM responsibility for ALL Evil done EVERYWHERE under the Sun as HE Is the very DOER of it for our instruction AND Refining through spiritual conflict. ONLY the CHRISTLIKE shall Enter HEAVEN as the only kind appropriate to Constitute the single Body of the 'ONLY BEGOTTEN SON OF GOD'. Your LIBERTY in compliance with the Thoughts which GOD does Richly provide to YOU daily is yours' to possess which NO power on earth or spirit is able to rend from YOU! Our sole source of spiritual troublings are IN OUR OWN MINDS, period. For without any particular Troubling Thought, you CANT (no apostrophe) experience ANY ill emotional feelings. GOD is SENDING HIS promised 'Strong Delusion' into this world in order to stoke fires of refining upon every soul so to Purify them from Selfish thinking and to work in them a volition to begin Purifying their own minds into habitual 'Right' ways of Godthink. Let CHRISTLIKIANITY (self sacrificing) rise up to Reign across the entirety of the globe in preparation for the nearing Final Hour of JUDGEMENT. Love ye your Tormentors and Oppressors, and Pray for those who acquire evil power to steal from you or determine to End your life, as in murder you. Trust rather that GOD shall render HIS Perfect Justice in that Final DAY. Yeah, I agree, and dedication to communing with GOD is the ONLY way to be ready to Bless the person, and NOT curse, who is about to KILL you! The Wicked HATE GOD, and that is the Reason they Hate all who appreciate TRUTH absolutely. All such desire to accuse GOD for your troublings which THEY themselves ARE the Architects of in your life! GOD has, by way of recent inspired technologies, opened 'Pandora's Box' to ensure the required heating up of CONFLICT the World Over. You may Only ensure your own PEACE of mind and heart and aspire to lead others to that path.
Man's Laws CANNOT Create Peace anywhere! Thank You
Yes, and California has the highest unemployment rate of 5.25% in the nation right now. The wealthy elites live along the coast, the poor inland. The middle class, well.........(leaving for Arizona, Texas, the South and Florida of course!)
Additionally, robotics automation and AI are inevitable and industry-sweeping. So are the potentially catastrophic layoffs. Hence why I support a universal basic income (UBI) for every citizen of the U.S. UBI is a form of social security system where a government guarantees that every citizen receives a set amount of money regularly, regardless of their income, resources, or employment status. The concept of UBI is grounded in the idea of providing financial stability and reducing poverty levels.
Adjustment to changing labor markets, like we are now seeing, and then in the face of automation, UBI could provide a cushion for workers displaced by technology, allowing them to retrain and adapt to new job markets. That is what this article should have been about.
And to those who cry fowl to such a 'social' system, what other options do you see? You can not stop the progression of technology, and now that AI is already here, change is coming.
all that long wind to say NOTHING. you and your obvious commie troll routine are failing..BADLY.
simple, get govt out of the way - govt wants AI so they can attempt to control all aspects of your life.
Who do you think pays into the pot from the "universal income" is distributed? I find the sum total of your comments on this article to be rather naïve and suggestive of the following about the author: young and idealistic; Democrat; progressive mindset; only lived in California; tech worker; AI generated, etc.
We're not a freaking commune. Everyone needs to work and have skin in the game. You think druggies and the criminals are going to work? They'll sit back with their hands out collecting the money that I work for and will do nothing to toward making a contribution to society. No Universal income for anyone. Particularly the those who make poor decisions and end up living on the streets as a result of their own bad choices. I'll give a Hand Up. Not hand out.
Well, young people need to train for the jobs of tomorrow. Regardless if the world has robots doing work once done by citizens, someone has to design and repair those robots! Houses will always need painters, carpenters, and plumbers. Cars, trucks, need designers I don't think AI will replace the good old commode, right? And, we all need to eat. Somehow, we forget that before the industrial revolution everyone lived on a farm, or were self employed as a merchant, blacksmith, retail store owner, etc So, if those people could earn a living, and eat adequately, future technology will not mean the end of productive work! What is lacking is college freshmen chosing math, science and technology, and small business enterpreunership as majors. DEI, women's studies, liberal arts, history, etc, won't prepare students for the jobs of tomorrow! And, good news, someone has to program the AI!! Kiosks, automated robotic hamburger flippers at the fast food restaurants break down. Someone had to design them, and someone has to come in and repair them!!
Are only right and far-right-leaning responses allowed on this article page? That is the question.
You are welcome to post your communistic screeds but you will get appropriate responses. If your fragile woke snowflake feeling are hurt you might try a leftist site to post where you won't hear anything to offend your ears.
Shut the fuck up Karen
Considering they are the only ones that make any sense , it's probably because of embarrassment that liberals are not answering.
Valerum,
No, small business owners paying all the taxes and complying with job killing regulations does not mean right, middle or left wing. What is needed is Economics 101 to be taught all high school seniors and college freshmen.
The Democratic party used to be more conservative, and was pro-business. Now, not so much.
Try starting your own business. Your outlook will change quickly!