Pizza Hut, one of the most popular pizza chains in the US, has announced that it will lay off about 2,000 drivers in Southern California in 2024. The decision comes as a result of a new law that will raise the minimum wage for fast-food workers in California to $18 per hour in April 2024.

The Impact of the New Law

The new law, which was passed by the California legislature in 2023, aims to improve the living standards of low-wage workers in the fast-food industry. According to the law, fast-food chains with more than 30 locations in the state will have to pay their workers at least $18 per hour by April 2024, and $20 per hour by January 2025.

However, the law has also sparked controversy and criticism from some business owners and industry groups, who argue that it will hurt their profitability and force them to cut jobs or close stores. They claim that the law will increase their labor costs by up to 30%, and that they will not be able to pass on the cost to consumers due to the competitive nature of the market.

Pizza Hut, which operates about 200 locations in Southern California, is one of the first major fast-food chains to announce layoffs as a consequence of the new law. The company said that it will terminate about 2,000 drivers, who currently earn an average of $13 per hour, and replace them with third-party delivery services, such as Uber Eats or DoorDash. The company said that this move will help it save money and remain competitive in the market.

The Reaction of the Workers

The announcement of the layoffs has been met with anger and disappointment by the affected workers, who say that they will lose their income and benefits, and that they will have to look for other jobs in a difficult economy. Some of the workers have also expressed their frustration with the new law, saying that it will harm rather than help them.

“I’ve been working for Pizza Hut for five years, and I love my job. I make good tips, and I have a flexible schedule. But now they are telling me that I have to go, because they can’t afford to pay me $18 per hour. How am I supposed to pay my bills and support my family?” said Jose Ramirez, a 32-year-old driver from Los Angeles.

“I don’t think the new law is fair. It’s supposed to help us, but it’s actually hurting us. It’s forcing the companies to fire us, and it’s making it harder for us to find other jobs. There are not enough jobs out there, especially for people like us who don’t have a college degree or a lot of skills. We are the ones who need the minimum wage the most, but we are the ones who are losing it,” said Maria Gonzalez, a 28-year-old driver from San Diego.

The Future of the Industry

The layoffs at Pizza Hut are likely to be followed by similar actions by other fast-food chains in California, as they try to cope with the rising labor costs and the competitive pressure. According to a report by the California Restaurant Association, the new law could result in the loss of up to 50,000 jobs and the closure of up to 4,000 restaurants in the state by 2025.

The report also warns that the new law could have negative effects on the quality of service, the innovation, and the diversity of the fast-food industry in California. It argues that the law will reduce the incentives for the chains to invest in new technologies, such as automation or digital ordering, and that it will limit the choices and options for the consumers, especially for those who are looking for low-cost and convenient meals.

However, the supporters of the new law maintain that it will benefit the workers and the economy in the long run. They contend that the law will increase the purchasing power and the living standards of the fast-food workers, who will be able to spend more on goods and services, and that it will reduce the reliance on public assistance and the poverty rate among the low-wage workers. They also claim that the law will create more jobs and opportunities in other sectors of the economy, such as health care, education, or retail, and that it will foster a more fair and equitable society.

Conclusion

The new law that will raise the minimum wage for fast-food workers in California to $18 per hour in 2024 has sparked a heated debate and a major change in the fast-food industry in the state. Pizza Hut, one of the most popular pizza chains in the US, has announced that it will lay off about 2,000 drivers in Southern California in 2024, and replace them with third-party delivery services, as a way to save money and remain competitive in the market. The decision has been met with anger and disappointment by the affected workers, who say that they will lose their income and benefits, and that the new law will harm rather than help them. The future of the fast-food industry in California remains uncertain, as other chains are likely to follow suit and cut jobs or close stores, while the supporters of the new law argue that it will improve the living standards and the economy of the state in the long run.