Liberal economics strikes again.
This time the victims include over 12,000 delivery drivers for Pizza Hut in the state of California who will be handed their pink slips over the coming months thanks to the state increasing the fast food minimum wage to a whopping $20 an hour. Guess what? That’s not going to help people, as clearly illustrated by the fact that such an increase is putting people out of work. If you needed additional proof the political left has no idea how the economy works — and I don’t think you do — this is it.
In fact, increasing the minimum wage is going to make the very problem they are trying to solve, worse. The reason for upping the minimum wage is to supposedly help folks who are struggling in poverty to have enough money to meet the current standard of living. What it actually does is increase the cost for business owners to run their companies, slicing into their profit margins. In order for them to make a profit and keep the doors open, they have to pass that cost on to consumers, thus the cost of living rises again, which then causes the state to increase the minimum wage, which leads to even more increases in the cost of living.
It’s a vicious cycle.
And that’s not all.
Many business owners are forced to reduce workers’ hours or even let them go, as is the case with Pizza Hut in California.
Check out more details from the Daily Wire’s latest report:
Numerous Pizza Hut franchises in California announced they would eliminate delivery driver positions and rely on third-party delivery companies such as DoorDash, GrubHub, and Uber Eats as the state’s minimum wage for fast food workers will increase to $20 in April, CBS News reported. The layoffs, which will start in February, will mostly affect Pizza Hut delivery drivers in Los Angeles, Orange, and Riverside counties.
One delivery driver told Business Insider last week that he was offered $400 severance pay if he worked until February 5 — the date Pizza Hut told him he would be laid off.
“The money they are giving us as severance pay is a slap on the face,” the Pizza Hut employee said. “It comes to $3 a month for nine-plus years of service.”
California’s Assembly Bill 1228, which increased the fast food worker minimum wage by 30% to $20 an hour, was signed into law by Democratic Governor Gavin Newsom in September. After the bill was signed, other fast food chains, such as McDonald’s and Chipotle, said they would increase menu prices to offset wage raises, according to Business Insider.
In 2022, Newsom signed the Fast Food Accountability and Standards Recovery Act, which called for fast food workers’ minimum wage to increase to $22 an hour, but fast food corporations opposed the bill and successfully got a referendum on the ballot. That minimum wage law was frozen by a California court last January, allowing groups who opposed the law to count signatures of those against the minimum wage increase.
The passage of AB 1228 kicked the old Fast Food Accountability and Standards Recovery Act to the curb and raised minimum wage for workers in these establishments $20 an hour. The impact of the legislation flowed down into 550,000 fast food workers and a total of 30,000 establishments in the state, CBS News reported.
The parent company of Pizza Hut, Yum! Brands — which also happens to own KFC and Taco Bell — stated it was “aware of the recent changes to delivery services at certain franchise restaurants in California.”
“Our franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations while continuing to provide quality service and food to our customers via carryout and delivery,” the company said in a statement.
Leftists, true blue bleeding hearts, are their own worst enemies. Their attempts to solve economic issues often create the very problem they are trying to solve. Is this done out of ignorance? Stupidity? Or is it something a bit more sinister? Are they purposefully attempting to collapse the economy in order to justify replacing our free market system with an apparatus that is socialist?
Those are questions we need to think about every single election cycle.