Fast Food Restaurant Owners Brace As $20 Minimum Wage Law set To Go Into Effect Next Week
New law causing more layoffs, reduced hours across state
By Evan Symon, March 25, 2024 11:56 am
With only a week to go before the AB 1228 $20 fast food minimum wage law comes into effect, restaurants across California continue to make last minute firings, employee hours cuts, and other measures to remain profitable and stay in business.
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. Roundtable Pizza has also done the same with many of their delivery drivers, with many other chains currently also looking into doing the same for deliveries. Seeing signs of massive layoffs ahead, many workers have even transitioned out to other lines of work in anticipation.
In recent weeks it has got even messier. Panera Bread, which was originally exempt over having in-store bakeries and selling bread on stand-alone, voluntarily went to the $20 wage following accusations that Governor Gavin Newsom had allowed the exception to take place to benefit a major donor. AB 1228 bill author, Assemblyman Chris Holden (D-Pasadena), recently also created a new bill that would grant numerous exemptions to the bill in an attempt to lighten the economic blow of AB 1228. However, as the Globe noted, AB 610 does anything but cleanup the mess caused by AB 1228.
While there have been attempts to try and spin this as a major labor win, with the Service Employees International Union (SEIU) launching the new and largely toothless California Fast Food Workers Union in February, fast food restaurant owners and managers have been bracing for the worst. Now, with a week left, many stores are scrambling to cut back employee hours, fire employees, set up lines so fewer employees are needed, and figure out what hours to close during the day during slow hours.
“This is what is incredibly stupid of the bill,” said “Annette”, an owner of a sandwich chain restaurant in Upstate California to the Globe. “If I still lived in LA, a $20 minimum wage would have been a major pain. Sure, you get customers coming in, but there are a lot more expenses for a restaurant there. I mean, taxes alone. Then, up here. You can have a restaurant in Siskiyou County or Shasta County where taxes are cheaper, but you still struggle with fewer customers. You can even have a spot on the Interstate on the 5, but there wouldn’t be enough traffic or cars coming in to justify the $20 an hour.
“It was a flat increase. You need to take into account a ton of variables. They were just thinking of the cost of living for employees. But that should just be one factor out of many. You have to go by county or by city. And you hit the nail on the head by pointing out just how much we are investing in automation and technology. It has been killing a lot of industries for years, especially blue collar ones. And now it is going after minimum wage jobs like these all thanks to new laws like these.”
$20 an hour hurting businesses
Another, a KFC franchisee, told the Globe “Major hour cutbacks for sure are happening here. We already kept it below 32 so not many are considered full time. But now we’re looking at the equivalent of giving them another shift off. We’re doing the same with less and consolidating tasks or having people only be at the register when customers are there.
“So people have been doing the math on $20 per hour. You know, $800 a week, or $41k a year. So, first of all, virtually no fast food worker works that long. This is a part time gig for kids, or if they’re lifers, they do two or three stores to make the equivalent of a full time job. And that’s all before taxes.
“Where it becomes a problem for us is, obviously, the costs. But, for a silver lining, we are now putting the few people above the 32 hours mark well below 30 now, so a lot of benefits just went out the window for them. I’m not using any glee or anything here. It sucks and we really wanted to do right by our employees as much as possible. But this $20 ruins that. If you see more people working 2 or three jobs or are frustrated by not having any customer service, thank AB 1228. We’re doing what we can to make this work, but they aren’t giving us any wiggle room.”
One of his employees, Pedro, who has worked there for almost 15 years, added that “My hours are being cut. This pay raise from the minimum wage is doing nothing because of that. So now I’m looking to take on another job to make ends meet. Which is hard now, as a lot of fast food workers are doing the exact same thing as me since they are in the same position all within the same industry. And I voted for these people who approved this.
“I thought AB 1228 was going to help us. We all did. But businesses just can’t keep up and now, it is only hurting us.”
Other owners and managers the Globe talked with on Sunday and Monday said largely the same thing but said that they couldn’t go into details. What they did say was that hour reduction, store hour fall backs, and layoffs were the three most common responses.
“We’re being painted as these monsters who care only about profits, but we honestly don’t want to lose our good employees here,” added the KFC franchisee. “We don’t want to be doing this but have to to maintain a healthy business. Our restaurants will look a lot different, say, this fall.”
More of the fallout from AB 1228 is expected soon as the new $20 minimum wage is expected to be put into place on April 1st.
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Stupid AB 1228 hasn’t even taken effect yet and just LOOK at the disastrous fallout already.
At first workers anointed a $20 minimum wage were apparently trying to hide “cat-who-ate-the-canary” facial expressions from their bummed-out bosses but now, and within a very short period of time, they are realizing that with jobs hanging by a thread, no benefits, and reduced hours they will be forced to look for at least one more additional job. NO ONE WINS, except for the craven politicians who did the bidding of their union donors who rule them and disrespected their voters by trying to buy their votes. Will anyone learn ANYTHING from this experience? Will anyone learn that this stuff DOES NOT WORK as advertised and only makes things worse —– for everyone?
If politicians really cared about their constituents, whether workers or franchise owners or customers or anyone else affected (but we already know they DO NOT), they would rush and run to get rid of AB 1228, ASAP. Repeal it, dump it, deep-six it. Bury it deep. Pretend they never heard of it. NOW. And never do it again.
Add AB 5 to AB 1228, and you have a bunch of unemployed workers you would not have had otherwise. CA’s revenue will be down significantly this year partly because of these regulations. Both young workers and retired workers who want some extra cash will be affected.
Here’s all everyone needs to know from this article, right here :
“One of his employees, Pedro, who has worked there for almost 15 years, added that “My hours are being cut. This pay raise from the minimum wage is doing nothing because of that. So now I’m looking to take on another job to make ends meet. Which is hard now, as a lot of fast food workers are doing the exact same thing as me since they are in the same position all within the same industry. And I voted for these people who approved this.”
Key takeaway : “And I voted for these people who approved this.”
Well, “Pedro” – welcome to being a conservative… REMEMBER “these people who approved this” and STOP VOTING FOR THEM!!!
The Democrats ARE NOT YOUR FRIENDS…
And their asinine insurance mandates and restrictions are KILLING the California real estate industry and homeowners everywhere, as more and more major insurers ABANDON California coverage as the RISKS posed by STUPID LEGISLATION causes them to FLEE the state, leaving us with the “California FAIR Plan” which will be a COMPLETE FLUSTER CLUCK if a major disaster befalls any one area…
These dumbass Democrats can’t balance the state budget, so what makes us think that they’ll be able to make the insured “whole” again if an earthquake or major wild/brush fire occurs….
So when are we going to rise up against the idiots in Sacramento and insist that they do SMART things, NOT stupid things???
The CRUEL IRONY of this taking place on ‘April Fool’s Day’ is not lost on me….
Saw a web-ad for t-shirts with pictures of Biden looking bewildered and the caption ” A ‘fool’ is someone who supported him in 2020, a TRAITOR is someone who still does”
Pedro worked for almost 15 years at a KFC franchise? Some of us remember a time when high school and college students used to work fast food jobs part-time to make a little extra money while going to school? Fast food jobs were never meant to be a career with “living wages”? The criminal Democrat mafia and their union boss cronies have now destroyed yet another industry in California?
TJ, those are loyal Democrat voters!!!
The current “administration” has expanded California’s immigrant (illegal) nationwide to the tune of tens of millions…
All to game the apportionment issue to gain political power, and grateful voters like “Pedro” WAS…
This was indeed the crux of this article:
“And I voted for these people who approved this.” admitted the employee, Pedro.
This is the mindset shared by the majority of California voters sadly and is why we are in the mess that we are. The constantly complain about how miserable life is here but continue to vote election after election for the exact same people who cause all the misery simply because on the ballot they have a “(D)” next to their name. It’s Stockholm Syndrome on a massive scale.