California Fast Food Workers Face Job Cuts Ahead of $20 Minimum Wage Rollout

Fast food workers in California are facing job cuts as many restaurants, especially pizza places, are getting ready for a new law that raises the minimum wage to $20 next week.

According to The Wall Street Journal, lots of these restaurants are planning to let go of hundreds of workers, reduce work hours, and stop hiring new staff.

Democratic Governor Gavin Newsom signed a law last September called the Fast Act, making fast food joints with 60 or more locations across the country pay this higher wage. This was after labor unions and folks in the healthcare industry pushed for it, and they’re getting a pay bump in June too.

“This is a big deal,” Newsom said, noting that it affects 80% of workers in the industry.

Job cuts started happening last year. For example, Pizza Hut said in December that they were cutting over 1,200 delivery jobs. Some Pizza Hut places even stopped delivering altogether.

Pizza Hut said people could still get deliveries through their app, website, or phone, and that the customer experience wouldn’t change.

Excalibur Pizza, which owns Round Table Pizza, is also cutting jobs—73 delivery driver positions in April, which is 21% of their staff. They said they’re shifting to third-party delivery services but see it as just moving jobs around since other restaurants are doing the same thing because of rising costs.

The new law says even places that sell ice cream, coffee, boba tea, pretzels, or donuts fall under this wage increase.

Greg Flynn, who owns a bunch of Panera franchises in California, tried to find a loophole earlier this year, saying that because they bake bread in-house, they shouldn’t have to raise wages. But Newsom’s office was like, “No way, that’s ridiculous.”

Chipotle’s CFO mentioned they’d have to raise their prices to deal with the wage increase.

Starbucks said they’re always trying to improve what they offer their workers, mentioning that their benefits and pay already add up to about $30 an hour on average.

“We believe in sharing success with our partners at every level in California,” said a Starbucks spokesperson.

Starbucks also recently closed seven stores in California, as reported by USA TODAY.