California’s new $20 minimum wage law has forced popular chain Mod Pizza to abruptly close at least five locations in the Golden State and 27 locations nationwide.
Mod Pizza, known as “the Chipotle of pizza,” shuttered its location in Clovis, near Fresno, two weeks ago, according to the New York Post.
Fifteen employees were let go at the Clovis location.
The Post reported that each of the laid off employees was given a $2,000 severance.
Mod Pizza was founded in Seattle in 2008 by husband-and-wife Scott and Ally Svenson, and is an acronym for “made on demand.”
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The move coincides with a rise in prices at McDonald’s, Burger King, Chipotle and In-N-Out Burger in California as a result of Governor Gavin Newsom’s decision to sign the minimum wage hike into law.
The minimum wage law came into effect on Monday.
⚠️🚨🚩#BREAKING – Mod Pizza starts closing California locations due to $29 per hour law taking effect.
When ants want to be paid for what a praying mantis does. pic.twitter.com/fNE5LsBrzg
— Ygor Petrov (@YgorPetrov) April 4, 2024
Is a high minimum wage bad for businesses?
Mod Pizza employees reportedly said they were told two days before their final shifts that they were being let go.
Despite the California Warrant Act requiring that employers give a 60-day notice to affected employees before a mass layoff, the former Mod employee — who wished to remain anonymous due to a non-disclosure agreement — said the corporation never gave a reason for closing the stores in California.
“Not from corporate directly, but I do have a feeling it had to do with the $20-an-hour increase, seeing as they knew it was coming,” he told KMPH.
Social media was divided over the decision to shutter several locations due to the minimum wage hike.
Mod Pizza should not be in business if they won’t pay their employees a livable hourly wage and benefits. I hope that every company that refuses to properly compensate their non managerial or executive employees for their work goes out of business
— Nathan (@cbdefender2019) April 5, 2024
This isn’t just about Mod Pizza ding dong. Mom and Pop businesses will go under because of this.
— Bridget Mercado (@BridgetLee2608) April 5, 2024
Other fast food chains are also seeing a spike in prices.
McDonald’s CEO, Chris Kempczinski, revealed that rising prices, including a Big Mac meal nearing $18 at some locations, have alienated customers making less than $45,000 a year.
The New York Post reported that over last summer, a McDonald’s franchisee in nearby Darien, Connecticut, that was called out for charging $17.59 for a Big Mac combo meal, also sold a Quarter Pounder with Cheese and Bacon meal with fries and a soda for $19.
That’s why we don’t go as much. When 2 people costs $25.00+ you tend to eat at home instead. We used to go a couple times as week. Now thay our grocery bill has also doubled we eat at home.
— TexasMimi 🇺🇲✝️☯️☮ (@archert712) April 5, 2024
With prices like these, more Americans are turning to eating at home over dining out.
