It's crazy to see basic economics lessons in real time.
Here we have California raising the minimum wage for fast-food employees from $16 to $20 per hour. And as a result, it looks like Pizza Hut is going to lay off more than 1,200 delivery drivers. Price of labor goes up, you fire those laborers and get new, cheaper ones from DoorDash or GrubHub. Great lesson in economics.
Y'all know California is going to demonize Pizza Hut for this. And I wouldn't be the least bit surprised if they actually laid out some sort of new regulation that fines companies who get around these wage hikes with layoffs and price hikes. It's California, they're capable of just about anything.
Pizza Hut is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour.
The law, known as Assembly Bill 1228, was introduced by Assemblyman Chris Holden, D-Pasadena, and signed into law in September by Gov. Gavin Newsom.
Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries.
A second Pizza Hut franchise, Southern California Pizza Co., is also planning to lay off 841 drivers. The layoffs will impact drivers in Pizza Hut locations in Sacramento, Palm Springs, Los Angeles, Central California, Southern Oregon, the Reno-Tahoe area, among others.
Man, I hate to see so many people get laid off. But good for Pizza Hut for finding their way around these new, higher wages. And hey, maybe some of those drivers can get a job working for DoorDash. Probably get a lot more work there anyways.
This was always going to be the natural progression of these fast-food wage increases. Business will always find a way around regulation, whether it be price increases, layoffs, or any number of creative solutions.
Thanks, Commiefornia, for the free economics lesson!
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