Pizza Hut vs. Welfare State

by philg

“Calif. fast-food chains slash workers as $20-an-hour minimum wage looms” (New York Post):

Michael Ojeda, a Pizza Hut driver for eight years in Ontario, Calif., received one of the notes from Pizza Hut franchisee Southern California Pizza in December telling him that his last day of work would be in February.

Southern California Pizza — which operates 224 Pizza Huts in the greater Los Angeles area — offered $400 in severance if Ojeda stayed through February, according to The Journal.

But Ojeda, who told the outlet that he made hundreds of dollars a week in wages and tips as a delivery driver, decided to claim unemployment instead.

“Pizza Hut was my career for nearly a decade and with little to no notice it was taken away,” said 29-year-old Ojeda, who was supporting his mother and partner on his Pizza Hut delivery wages.

Even if you don’t depend on Pizza Hut to maintain your BMI, there is much of interest in the above. The restaurant was out-competed for Mr. Ojeda’s time and effort by the Welfare State. Also, in the Department of American Family Disintegration, Mr. Ojeda is not supporting an intact mom and dad, but he’s instead supporting his mom and a sex partner who isn’t his biological father. (Though maybe it is instead a 2SLGBTQQIA+ love story? The “partner” could be Mr. Ojeda’s same-gender partner and not the mom’s partner.)

The article reminds us of the importance of connections in a planned economy:

Panera Bread, however, was ruled exempt from the $20-an-hour minimum wage hike by Gov. Gavin Newsom after the billionaire owner of several of the chain’s locations donated to his campaign, according to a report.

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12 thoughts on “Pizza Hut vs. Welfare State”

  1. There’s a palpable decrease in the number of employees compared to 5 years ago & the skill of the employees. $20 doesn’t buy what $5 did last week. It’s one of the rare times a personal experience can reflect a manestream media news cycle, but a very old news cycle it is.

  2. You read the article too fast.

    He was laid off.

    The only “competition” with the welfare state for his labor was for the last weeks of it. But they had already fired him at that point.

    • O.R.: Your understanding of the article is the same as mine, I think. Every day each of us can decide whether to work or not and for whom to work. Mr. Ojeda apparently had a choice, for at least a few weeks, of whether to work for wages or live off the Welfare State (#2 in the world by percentage of GDP, but that was before coronapanic so perhaps we are #1 now; see https://www.washingtonpost.com/opinions/robert-samuelson-our-giant-welfare-state/2014/11/25/28f815bc-74c1-11e4-a755-e32227229e7b_story.html ). He wisely chose the Welfare State!

    • not sure about “wisely”. CA weekly unemployment benefits are about 1/2 of earned weekly income and last for 26 weeks. So he could make extra money and go on 26 weeks half paid vacation, presumably a little better paid if extra $400 severance were calculated as part of his last week income. Now he would have to start looking for work earlier.

    • The cash income of unemployment might be less, but that will qualify Mr. Ojeda for all kinds of means-tested taxpayer-funded subsidies, e.g., for housing, health insurance, food (SNAP/EBT), etc. Or if he was already on these programs, he’ll get larger subsidies. So his spending power might fall by 15% even if his income falls 50%. If he wants to make up that 15% he can do some work for cash so that he doesn’t lose his benefits.

  3. “Pizza Hut was my career for nearly a decade”.

    I can understand getting such a job as a high school or college student, or someone in acting school. But a career?

    • a) there are two sides to the bell curve, not to mention that our country has been the target of a POPULATION BOMBING campaign since at least 1965 but especially post 1990 consisting of millions of people from low-IQ countries such as Guatemala (47.52) Somalia (67.67), India (76.24), and Mexico (87.73). It is unlikely that neurosurgery was an option for this guy (although, with enough DIE and ethnic nepotism, anyone can get hired to do anythinig!)

      b) Changing careers is not easy. Work takes up a lot of time, and even if it doesn’t take up every minute, often the SCHEDULE precludes further education or even sending out many job applications. It happens even to adjunct professors, who were smart enough to get advanced degrees.

  4. I suspect this should be seen primarily as a policy arbitrage story.

    If these drivers were kept on at the pizza place, they need to be paid a higher wage. If the pizza shops outsources their delivery service to another company (like Uber eats), that 3rd party will pay the lower minimum wage.

    I predict these pizza places will soon use language like “Pizza Hut, powered by Doordash”, and have a tight integration that allows them to function nearly exactly as before.

    And I suspect the tech stack at these delivery companies is better than the tech stack at pizza chains, which will ultimately deliver a higher level of service.

    There are likely engineers on both sides of these relationships working around the clock tightening these integrations now.

    It won’t be long before students are reading business cases where pizza shops were able to up their game by outsourcing their logistics to companies that specialize at logistics, and this arbitrary $5 wage difference was the impetus for it to happen now.

  5. “Panera Bread, however, was ruled exempt from the $20-an-hour minimum wage hike by Gov. Gavin Newsom after the billionaire owner of several of the chain’s locations donated to his campaign, according to a report.” – If Newsom were a Republican Panera would be prosecuted fro bribery and Newsom for corruption, in New York.

    • I heard the story also from Peter Schiff. Talk about corruption – the rule was so specific only Panera Bread could qualify for the exemption. You had to be baking bread for more than 2 years before the minimum wage hike began.

      I mean, this is like South American level corruption. But nothing in the MSM news…

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