More California Restaurants Slashing Jobs, Halt Hiring Ahead of Minimum Wage Hike

2024-03-26 14:00:59

Even more California restaurants have laid off people before the $20 minimum wage hike in April.

California hasn’t learned anything when it raised the minimum wage in 2019.

Pizza Hut already slashed 1,800 delivery drivers in December. Brian Hom, owner of Vitality Bowls restaurants in San Jose, has two employees for his two stores.

Hom raised prices by 10%. He said having only two employees means “it takes longer to make customers’ açaí bowls and other orders.”

Hom also won’t hire more people or open more stores in California; he might expand outside the state.

Some chains have said they will raise prices, while some operators will do everything they can to avoid that:

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.

It’s simple economics. A business must make a profit to stay open and provide goods to consumers.

This is not hard. Rising costs in any part of a business affects the other parts:

Alexander Johnson, a second-generation owner of 10 California Auntie Anne’s and Cinnabon restaurants, said the higher wages would lift his labor costs by around $470,000 annually. He has reduced his staff by about 10, and his 73-year-old parents have returned to working in the business to help shave costs.

Johnson said he turned down a recent offer to add a location in a waterfront tourist area in San Francisco because of the projected operating costs.

“It pains me to think about shutting down stores or laying people off,” said Johnson, who moved to Nevada this year to open Scooter’s Coffee locations in the state. “I love California, and I’m very sad about what’s going on.”

But yet politicians and labor organizations continue to lie, calling these moves job creators.


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More California Restaurants Slashing Jobs, Halt Hiring Ahead of Minimum Wage Hike


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