Tag: minimum wage

Seattle Law Mandating Higher Delivery Driver Pay Is a Disaster

In 2022, Seattle’s City Council passed an ordinance mandating a minimum earnings floor for app-based food delivery drivers in the city. The law finally went into effect in January 2024, but so far the main result has been customers deleting their delivery apps en masse, food orders plummeting, and driver pay cratering.

The ordinance, part of a legislative package called “PayUp,” was passed under the banner of protecting gig workers. By setting a compensation floor for app-based delivery drivers based on miles driven and amount of time worked, the ordinance operates as a (supremely complicated) minimum wage.

The wage floor is based on labyrinthine calculations: the “engaged minutes” for drivers are multiplied by a “minimum wage equivalent rate,” which is then multiplied again by an “associated cost factor” and then multiplied yet again by an “associated time factor.” Next, this sum is added to the total of “engaged miles” of drivers, multiplied by the “standard mileage rate” and then multiplied once more by the “associated mileage factor.” (If you’re lost, don’t worry—the text of the ordinance itself literally does the math for you).

Heralded as a “first-of-its-kind” legislative breakthrough when it passed, the first two months of the ordinance’s operation have provided a grim real-world Economics 101 lesson. First, the delivery companies were forced to add a $5 fee onto delivery orders in the city to cover the sudden labor cost increase. On cue, news stories started popping up of $26 coffees, $32 sandwiches, and $35 Wingstop orders in which taxes and the new fee comprised nearly 30 percent of the total.

Keep reading

Panera Bread exempt from California’s $20 minimum wage law after owner donated to Gov. Newsom

California Gov. Gavin Newsom signed a law that exempts Panera Bread from a new $20-an-hour minimum wage hike for fast food chains after the billionaire owner of several of the chain’s locations donated to his campaign, according to a report.

In September, Newsom, a Democrat, signed into law a measure that raises the minimum wage of food fast workers from $16 an hour to $20 an hour.

But the Fast Food Accountability and Standards Recovery Act (FAST Act) includes an unusual carve-out that exempts “chains that bake bread and sell it as a standalone item,” according to Bloomberg News.

Newsom reportedly sought the exemption, which benefits among others Greg Flynn, the billionaire CEO of Flynn Restaurant Group, the company that owns some two dozen Panera Bread locations in the state.

Flynn, who attended the same high school as Newsom, has been involved in business dealings with the California governor, according to Bloomberg News. He has also contributed to Newsom’s political campaigns.

Keep reading

California Senate Hopeful Barbara Lee Wants $50 Per Hour Minimum Wage

Minimum wage advocates are often asked why, if they think prosperity can be achieved by setting a floor on what people are allowed to charge for their labor, they don’t just hike it until everybody is wealthy? A candidate for the U.S. Senate has now risen to that challenge, proposing to set wages as high as $50 per hour. That could be a pathway to making everybody wealthy—if only the minimum wage made sense as policy, which it doesn’t.

This week, the four leading candidates for the U.S. Senate seat opened by the overdue departure of Dianne Feinstein met for a televised debate. Under California’s open primary system, Democratic Reps. Adam Schiff, Katie Porter, and Barbara Lee, Republican Steve Garvey, and all other candidates for the seat will go against each other March 5, with the two top vote-getters facing off in November.

Unsurprisingly for California and the year 2024, the spotlight was on bad ideas.

Keep reading

California’s New Minimum Wage Is Predictably Killing Food Delivery Jobs

A new California law will require that most food-service workers get paid at least $20 per hour starting next year.

But hundreds of pizza delivery drivers in the Los Angeles area are about to discover Thomas Sowell’s famous adage that the true minimum wage is zero.

Pizza Hut announced Wednesday that it would lay off about 1,200 delivery drivers in Los Angeles, Orange, and Riverside counties, CBS News reported. Pizza Hut franchises are outsourcing delivery to third-party apps like GrubHub and UberEats as a cost-saving measure in advance of the new law taking effect.

The layoffs are likely to take effect in February, The Los Angeles Times reports, just weeks before the new, higher minimum wage hits.

California’s minimum wage for all workers is already $15.50, one of the highest wage floors in the country. The new $20 per hour minimum wage applies to all employees of fast-food chains with at least 60 locations in the country.

Keep reading

Biden Minimum Wage Czar Demands Federal $15 Wage, But Students Under Him As Dean Make $13.50

While President Joe Biden’s nominee for Wage and Hour Administrator at the Department of Labor frequently calls for a $15 an hour minimum wage, the nominee has not called for students at the university he works at to receive the same.

David Weil, who Biden announced as a federal nominee last week, has backed a $15 an hour wage while not instituting such a policy at Brandeis, where he is a dean and professor. The group that alerted The Federalist to this contradiction is the American Accountability Foundation.

According to the Office of Student Financial Services, the minimum wage at the private school in Massachusetts is $13.50 an hour, the same minimum wage set by the state. Given the dean’s influence and position as a staunch progressive, it is curious why he would work at a school that does not provide the same compensation he seemingly determines is necessary.

Keep reading