“I can’t charge $20 for Happy Meals.” Those are the words of Scott Rodrick, the owner of eighteen McDonald’s in Northern California, where legislators have increased the minimum wage to $20 per hour for fast food workers. So Rodrick and many other franchisees are being forced to make hard decisions regarding employees whom they can no longer afford to employ. Rather than helping fast food workers, California’s politicians are putting them out of work or preventing them from getting hired at all. That’s what happens when politicians implement price controls. Heather Haddon reports in The Wall Street Journal:
A California state law is set to raise fast-food workers’ wages in April to $20 an hour. Some restaurants there are already laying off staff and reducing hours for workers as they try to cut costs.
California restaurants, particularly pizza joints, have outlined plans to cut hundreds of jobs in the months leading up to the April 1 wage mandate, according to state records. Other operators said they have halted hiring or are scaling back workers’ hours.
Michael Ojeda, a Pizza Hut driver for eight years in Ontario, Calif., received notice in December that his last day would be in February, according to a letter from his former employer. Pizza Hut franchisee Southern California Pizza offered $400 in severance if he stayed through February, but Ojeda, who said he made hundreds of dollars a week in wages and tips as a delivery driver, went on unemployment instead.
“Pizza Hut was my career for nearly a decade and with little to no notice it was taken away,” said Ojeda, 29, who previously supported his mother and partner on his Pizza Hut delivery wages.
Southern California Pizza didn’t respond to requests for comment. Pizza Hut said it was aware of some of its California franchisees changing their delivery services.
Some pizza-chain operators in California are laying off drivers ahead of the wage law’s start and farming out delivery service to apps. Franchisees for Pizza Hut and Round Table Pizza, a chain of around 400 units founded in Menlo Park, Calif., have said they plan to lay off around 1,280 delivery drivers this year, according to records that major employers must submit to the state before large layoffs.
In San Jose, Brian Hom, owner of two Vitality Bowls restaurants, now runs his stores with two employees, versus four workers that he typically used in the past. That means it takes longer to make customers’ açaí bowls and other orders, and Hom said he is also raising prices by around 10% to help cover the increased labor costs.
“I’m definitely not going to hire anymore,” he said.
Proponents of the California law setting the new minimum food-worker wage and a state-appointed council overseeing it have said the measures would help improve the lives of hundreds of thousands of local workers. Organized labor groups have said they hope to replicate the law in other states.
The coming minimum-wage increase for California fast-food workers at bigger chains represents a 25% increase from the state’s broader $16 minimum wage. McDonald’s, Chipotle Mexican Grill, Jack in the Box and other restaurant chains have said they would raise menu prices in California to offset some of the cost.
Many California restaurant operators are looking for other ways to cover the cost, like reducing hours, closing during slower parts of the day or serving menu items that take less time to make.
“I can’t charge $20 for Happy Meals. I’m leaving no stones unturned,” said Scott Rodrick, owner of 18 McDonald’s restaurants in Northern California.
Other restaurateurs, including Hom of Vitality Bowls, said they are turning down opportunities to open new locations in California and looking at expanding in other states instead.
Action Line: It’s not all California’s fault. The politicians who allowed America’s economy to become dominated by burger-flipping jobs should accept some of the blame. The grandfathers of today’s burger-flippers drove America to be history’s greatest manufacturing economy, and then it was all given away by the globalist Great Reset crowd in Davos. As for a $20 minimum wage, Mike Rowe recently explained that you can’t climb the ladder of success if you can’t reach the first rung. When you want to talk about your ladder to success, and where you’re going from here into retirement, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
