(StraightNews.org) – Pizza Hut in California is laying off more than 1,000 delivery drivers before the minimum wage rises to $20 per hour. PacPizza LLC filed a WARN (Worker Adjustment and Retraining Notification) Act notice with California’s Employment Development Department, saying it had made a business decision to end all delivery services and eliminate all delivery driver posts – affecting around 1,200 jobs.
Similarly, Southern California Pizza Co. announced it will lay off 841 staff before the new pay increase takes effect in April. Workers expressed shock at the decision and said they now face an uncertain future as 2024 gets underway. Pizza Hut said it will use groups like Deliveroo and Uber to deliver its products.
Democratic Governor Gavin Newsom signed the pay rise into law in September, raising the minimum wage for fast food workers from $16 to $20 per hour. Saying it would “stabilize the industry,” Newsom blew off the notion that fast food workers are usually teenagers in their first job and said many families depend on the wage of such workers.
“We have the opportunity to reward that contribution, reward that sacrifice,” Newsom said.
The move came following pressure from labor unions in the Golden State campaigning to make corporations liable for any wrongdoing committed by franchises, but who agreed to drop that ambition in exchange for a higher minimum wage. The agreement came after weeks of negotiations and was met with joy by many workers.
The wisdom or otherwise of raising wages by government decree is a hotly debated topic. Conservatives and free market proponents generally argue that the market should determine pay, and government-imposed rates prompt job losses and increased prices, thereby pushing up inflation. Supporters of pay rises say it boosts the economy by encouraging spending.
Minimum pay rates vary from state to state, and the federal amount is $7.25. The states with the highest rates are California, New York, and Washington, all at $16 or above. Massachusetts and Maryland are close behind with $15.
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