California’s recent increase in the minimum wage for fast food workers has caused a ripple effect in the industry, with some businesses struggling to keep up.
One such chain, Mod Pizza, has shuttered five of its locations in the state just before the wage hike went into effect on April 1st. According to a local Fox affiliate, the company closed over two dozen shops nationwide, but workers at the Clovis location suspected that the California closures were due to the new law.
In an interview with KMPH, a Mod Pizza employee stated, “It just kind of seemed like the right timing, two weeks before all of the fast food locations in California got that increase that we closed.” However, Mod Pizza has not confirmed that the wage increase was the reason for the closures. FOX Business reached out to the company for comment, but they did not respond.
The legislation that was signed into law by Governor Gavin Newsom in September raises the minimum wage for fast food workers in restaurants with at least 60 locations nationwide, except for those that make and sell their own bread. This increase equates to an annual salary of $41,600, which is a significant jump from the previous minimum wage of $16 per hour. The median fast food worker in the US earns $13.43 an hour, while those in California make an average of $16.60 an hour, according to the Bureau of Labor Statistics.
In addition to the pay raise, the law also establishes a “Fast Food Council” that consists of representatives for both workers and employers. This council has the authority to approve further pay increases and set standards for working conditions. Governor Newsom stated that the goal of this legislation is to give fast-food workers a stronger voice and improve their wages, working conditions, and training.
However, not all fast-food establishments have been able to absorb the increase in wages. Fosters Freeze, another California fast food joint, recently closed its doors due to the financial impact of the wage hike. Monica Navarro, a former assistant general manager at Fosters Freeze, shared her experience with the closure, stating that she found out on her way to work that the restaurant was closing for good.
Similarly, Pizza Hut franchisee Southern California Pizza has also had to make tough decisions in order to cope with the wage increase. One of their employees, 29-year-old Michael Ojeda, was informed in December that his last day of work would be in February due to the expected financial repercussions of the wage hike. Ojeda, who has worked at Pizza Hut for nearly a decade, expressed his disappointment, saying, “Pizza Hut was my career and with little notice, it was taken away.”
The closure of these establishments has sparked concern among workers in the fast food industry, who fear losing their jobs due to the wage increase. Some employees are also worried that this trend may continue, leading to job loss across the state. However, supporters of the legislation argue that the increase in wages will benefit workers and improve their standard of living.
Overall, the impact of the minimum wage increase on the fast-food industry in California is still unfolding. It remains to be seen how other chains will cope with the wage hike and if more closures will occur in the future. As the “Fast Food Council” begins its work, it is likely that there will be ongoing discussions and debates about the effects of the legislation on both workers and businesses. Only time will tell the true outcome of this controversial law.
