Summary
➡ The increase in minimum wage in California to $16 an hour has resulted in mixed reactions. While some feel the rise is necessary for workers’ livelihood, businesses like Pizza Hut plan to cut jobs to maintain their bottom line. In response to the wage hike, many businesses anticipate raising product prices and leaning towards technology-based solutions, such as automation, to reduce labor costs. However, advocates argue that wage increases are essential to help workers meet fundamental living costs such as housing and groceries. Such economic shifts highlight the balancing act between worker rights and entrepreneurship.
Transcript
Good evening and thank you for joining us. I’m Carlo Chiquetto. Marcella Lee is off tonight. I’m Jesse Pagan. While supporters say the move is a long time coming, others say this new law could end. Hold on. I ain’t never seen two men sit at the newscaster’s desk. We got diversity, equity and inclusion at the newscaster’s desk. Now. I’m not even used to seeing this. Listen, the way that my brain work.
If you new here to the millionaire morning show, we look at things a little bit differently and we use our context clues before we start having a conversation. I never seen two men at the newscaster’s desk. Got a purple and green tie on turquoise. This looks very fruity, looks odd. It looks OD. I’m not used to. The first thing that I do is I try to figure out, okay, well, what’s the Instagram? What’s the Instagram of that young lady that’s sitting over there to the left? I just look at her, I look at her elbows, I look at her neck.
See if it’s a little tighter because you could tell how old a woman is because they got Botox and stuff now. So you can tell how old a woman is by her neck because they don’t usually get botox in a neck. That’s how you can tell how old a woman is. You all keep saying, black don’t crack. Look at that whole neck. Yeah, look at her neck. If you want to tell how old a woman is, look in this area.
Not in this area, not on her forehead, not in her ears. She dyed her hair. She keeps saying 50 is the new 20. Look at that whole neck. This is weird. This just caught me off guard. Straight off, right off the bat, end up hurting many of the workers it’s intended to help. CBS Hate’s Richard Allen digs into this from both sides. And this major boost to fast food workers minimum wage here in California is set to take effect in April.
But already some fast food chains like Pizza Hut are responding by cutting jobs. At first I was more like, really? After I leave, they decide to do this. San Diego. Noah Davidson Mendiola recently quit his job as a shift worker at McDonald’s. He’s in full support of this move to raise fast food workers minimum hourly wage to $20 an hour. I’m both happy because fast food workers really don’t get paid enough to deal with a lot of the situations.
But it’s also like, come on, you should have done this a long time ago. And while this pay hike applies to fast food businesses with more than 60 locations nationwide, some analysts believe it will spur other businesses to follow suit. Everyone else has to match, right? Because if you can work at McDonald’s or Starbucks for $20 an hour, why would you stay at the kitchen at Olive Garden or McDonald’s, Pizza Hut? All of these places.
Now, the way that they did it is they didn’t say, well, if you have more than 50 or 60 locations within the state, they said, if you got more than 50 or 60 locations as a company, whether you franchise them or not, nationwide, nationwide. Now, how did they then put the rest of these businesses at a disadvantage? Because if you then get at a fast food restaurant or they have a bunch of locations, and then they say, okay, well, you got to pay this high school worker or anybody that comes in here a minimum of $20 an hour.
He just described it. What happens is you then create an economy where everybody got a match, because at the very least, people are fighting. I never thought I’d be saying this in my entire life. People are fighting to get in Jack in a box, McDonald’s, Pizza Hut, Burger King, KFC, Starbucks. People are literally fighting to get inside of these locations that are innovating and laying people off. And so now you create a whole cascading effect, because it’s not just the mom and pop spots.
People that are working in plants or people that are doing much harder, difficult jobs that may start off at 1617, $18 an hour are saying, why should I be here? And I could just go and work at McDonald’s. I could go and take that. High school kids, man. Look, I seen a video where people were putting together their resume in order to make sure that they’re not too qualified to become full time.
Over at McDonald’s. People are basically saying, yo, I’m about to go and get me a part time job at McDonald’s, and hopefully they’ll hire me full time. They don’t even want a manager’s position. They don’t want none of that. So now, if you do something that’s a lot harder or more productive, or if you’re a construction worker or you ain’t got no experience, they are forced to match, at the very least, if not more, because you can’t just say, well, we paying $20 an hour, too.
Oh, skip that. I’m going to still go and flip burgers. That’s easy. I’m going to go and be on the fries. I’ll take lettuce. I’ll go work at McDowell’s instead of McDonald’s. Now, coming to America. Some of you all ain’t seen it. I’m going go to work at McDonald’s instead of McDonald’s now. So it’s two things that’s happening. First, there’s a cascading effect because it creates a situation where other businesses can’t compete anymore, even though that cost is being passed over to the consumer from the business itself.
So you’re going to continue to see rising prices, and then prices across the board for everything else is going to go up, which then makes that $20 an hour job is really still $12 an hour. Is still $12 an hour because all of the prices and inflation continues to go up in order to keep pace with the prices that’s being passed over to the consumers. Because they’re not going to take a loss.
They’ll lay you off. They’ll do more with less. They’ll raise prices, pass it over to the consumers, but they’re not going to take a loss. And the second thing that’s also going to happen is you’re going to basically prevent innovation within the state or those businesses, or you’re going to prevent people from coming over and opening up their business over in that part of your country. Over in California, they’ll say, well, we’ll open up everywhere else around it, but we won’t actually open up anyone’s inside of California because we don’t want to be subjected to what’s going on there or even at Walmart.
But not everyone sees this particular move targeting fast food chains as the right one. I wouldn’t say I’m particularly in favor of it, but I understand at the same time that a lot of these people just can’t afford to live here. Dale Young is a retired small business owner. He believes more needs to be done to stabilize the overall economy and not just this particular sector of the labor pool.
It’s a band aid. When is it going to stop? I mean, is next year. They’re going to raise it to $25 an hour. It’s never going to stop. How do you know that it’s never going to stop? Because we have history and we also understand finances and how money works in economics to substantiate and draw a conclusion to our argument. Give me an example, Anton. Okay, remember just a few years ago that was protesting for $15 an hour? Oh, y’all forgot about that.
We did plenty of shows where they were protesting, give us us free. Give us, us free. Give us us free. And they protested for $15 an hour. And then the unions over there at the automakers, what we was just covering right before the end of the year, and they got what they wanted and they got all the way up to what, $42 an hour or some crap like that, right? And then right after they got it, they started doing layoffs across the industry and they slowed down innovation, research and development.
And then they start laying off white collar workers and they start offering buyouts to people that’s already been there for an extended period of time. And now it’s $20 and then it’s going to be 25 and then it’s going to be 30 and then it’s going to be 35 and it’s going to be 40. And guess what? You’re never, ever going to be able to get what they call livable wage because a, those jobs were not meant for you to be able to survive off of.
It was meant to either bridge the gap or to give experience to people that was first coming into the workforce. That’s number one. And then b, money. The cost of being able to live is going to continue to go up and so you’ll never be able to protest your way over into being successful. You have to get a tangible skill that people will pay you above whatever the standard rate is or the minimum wage is in order for you to then grow within this economy.
It’s the only way. He also points out that this mandatory pay increase will force some businesses to cut jobs to maintain their bottom line. Case in point, Pizza Hut, which has announced it will lay off more than 1200 delivery drivers at hundreds of franchises across the state before this new law takes effect, its parent company recently told Business Insider. Our franchisees independently own and operate their restaurants in according 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.
And for more information on this and other new laws that are taking effect here in California in 2024, just go to cbSa. com new year. More pay California workers must now earn at least $16 an hour as part of the new minimum wage. Action News reporter Brianna Willis joins us now to share how these pay raises affect both employees and local businesses. So the minimum wage in California is 16.
If you have more than a certain amount of locations nationwide, the minimum will then become 20. Donna. Well, Warren, while fifty cents more per hour may not seem like a lot, the business managers I spoke with say it affects all of their operations. On top of that, for fast food restaurants, another more significant pay hike is just less than four months away. But workers groups say this money is needed as more people rely on these jobs to make a living.
With the new year, California’s minimum wage is notching up from Guy. Now, look at this guy right here, right? Look at this guy right here. Nothing wrong with working. Have no problem with it whatsoever. But he’s basically cutting meat. That’s either a meat or a cheese. You can cut meat or you can cut cheese with that. Looks like he’s cutting cheese, actually. Right? So we use it a lot of times in the restaurant business to cut corned beef.
We might use it to cut cheese, all of that, right? And this guy is making, at minimum $16 an hour for an automatic meat and cheese slicer. 15. $16 an hour for an automatic meat and cheese slicer. Nothing wrong with the fact that he’s working. As long as you’re not doing nothing illegal, I’m cool with it. Do you know how much meat and cheese that you got to sell in order to be able to justify paying somebody $20 an hour? I’m being honest.
Listen, you do know that restaurants were some of the not just restaurants, but just opening a business alone, let alone restaurants. You do know that they are some of the most difficult businesses to break into and be successful. You can have a line outside the door, and it does not guarantee you to actually be successful. When it comes to being in a restaurant business alone, it’s so hard.
It is very difficult. Especially when you build in a brick and mortar. Especially when you’re doing brick and mortar, it’s very difficult. You got so many costs and the margin for error is thin and slim, and you’re making it more difficult for businesses to then be able to stand up and compete. And they all basically going to be fighting for the slice of the pie. And the only people that’s going to survive is the people that then figure out how to leverage AI automation to do more with less and have less people inside of the businesses.
So now what I see happening is most places that are opening now, they’re not open in locations where you can come in and sit down unless it’s that type of place where they got service based. And in those service based places, prices are through the roof. Through the roof. But most places that are opening now, either they’re completely shutting down the inside of their location and just doing complete drive through, or they’re building them as drive through locations to where you don’t have to have a whole lot of people to staff in there in order to be able to run the business.
When it comes to raising the minimum wage, we’re just trying to keep people afloat. Dylan Savory, executive director of the Central Labor Council, says they advocate for laws like this to help people who cannot fight for themselves. We see that employers are not always willing to look at their books and give their employees the most that they can possibly afford. So it’s our job to go and supplement that with good policy and make sure that families can afford their housing, afford their groceries, afford their basic.
From a bunch of people that don’t know business to say the pay increases can be challenging to keep up with. So it’s kind of causing us to have to increase our menu prices as well as find new ways to limit labor. He just told you the two things that they doing. The owner of these restaurants and businesses, because most of them are just mom and pop spots, they doing two things.
They not hiring and they lowering the amount of people that it take in order to do the job, and they figuring out how to cut costs, and then they’re raising the prices ever so slightly over and over again in order to pass it over to the consumer because you’re going to have to pay for the people that they wind up keeping. He literally just told you what I’ve been telling you.
Oh, okay. Well, we got to raise prices, which basically raises inflation. We got to raise prices, and we got to pass that over to the consumer, and then we got to limit the amount of people that we can hire going forward. That’s basically what he just said. Let me rewind it for you. Local businesses say the pay increases can be challenging to keep up with. So it’s kind of causing us to have to increase our menu prices as well as find new ways to limit labor just to stay profitable.
Now, when you get back to us as a company, are we going to have to raise prices? Yes. Racellus Cardinas, general manager at Chibahud in northwest Fresno, says they just order new menus since prices have to rise. But in addition, he thinks they will need to cut shifts. It’s definitely limiting our available labor hours. At Chibahut and other fast food restaurants, there’s another law, AB 1228, raising the minimum wage for fast food workers to $20 an hour later this year.
We can’t pass on a ten to 15% price increase to our guests. It’s not fair because those are our family, our friends, our community. Chris Stubner says he’s lived in Fresno for decades and owns Wendy’s and KFC locations here. So the increase is personal. When he has to charge more, he says that ends up costing them a lot more than just $20 per hour. We pay workers comp fees based on our payroll dollars.
We pay other insurance based on payroll dollars. We pay taxes on that payroll dollar that a lot of people don’t see. So it’s not just $20 an hour that we’re going to have to raise our prices. There’s been a lot of behind the scenes Stubner adding that it’s crucial now more than ever to support local businesses. We have to look at all options just to survive at this point.
And a lot of people don’t take that into consideration. They don’t understand the true cost of business. But you have a lot of people protesting and legislature that don’t even realize that you are going to be making less even though they’re going to be paying you more. And that’s unfortunate. And so there is no end in sight. It’s going to continue to go up, it’s going to continue to suffer until they legislate themselves out of businesses opening in California because nobody is going to want to do business where they can’t be profitable.
It’s. And it’s a lose lose situation for everybody. But I don’t know, man. I don’t know. What do I know? What do I know? I’m just reacting to it and I’m just giving you the insight. .
Author
