California lawmakers passed a controversial and landmark bill. The bill, AB 257, allows a 10-person council to raise the fast-food industry minimum wage to $22 an hour. It also allows them to set workplace safety conditions. AB 257 gives more rights and protections to more than half a million fast food workers. However, the restaurant industry warns the bill would hurt businesses and consumers. This bill challenges the current $15 minimum wage as a livable wage.
What’s the problem in the fast food industry?
The UCLA Labor Center surveyed fast-food workers, and they are struggling to make ends meet. The Guardian reports, “[m]ore than 40% of workers surveyed reported not having enough money to afford groceries during the pandemic, and nearly half said they were doing more than one job to try to make ends meet. Among workers who said they had expressed workplace concerns to their managers, 25% said they had experienced retaliation for doing so.”
There are many challenges to working in the fast food industry.
What will the bill solve?
The Los Angeles Times reports the 10-member council consists of two representatives from five groups. Worker representatives, worker advocates, government representatives, franchisor representatives, and franchisee representatives. The council will work to improve working conditions and wages for California’s fast-food employees. It’ll also “prevent wage theft, sexual harassment, and general lack of compliance with existing labor standards,” according to Vox.
What will the legislation do to California’s economy?
Unfortunately, a UC Riverside Center for Economic Forecast and Development analysis determined the legislation would increase menu prices by 20%. CNBC reports that nearly half of California restaurant operators say their business conditions are worse now than three months ago.
Also, California Governor Gavin Newsom’s Department of Finance opposes the bill. They say it will create “a fragmented regulatory and legal environment”. In detail, the bill only targets big chain restaurants of 100 locations or more. It is a “discriminatory measure designed to target the franchise business model,” according to an International Franchise Association statement to CNN.
McDonald’s USA President Joe Erlinger says, “[t]his is a clear example of picking ‘winners’ and ‘losers,’ which is not the appropriate role of government.” For example, Vox reports the legislation will hold “companies like McDonald’s and Pizza Hut legally responsible for any labor violations at individual stores, even if those individual stores are owned by franchisees. Right now, big corporations are generally not liable for their franchisees breaking labor laws.”
The AP reports, “[o]rganizations representing Asian, Black and LGBTQ businesses sent a letter to senators Monday arguing that the measure would harm minority owners and workers.”
What’s the status of the bill?
Governor Newsom has until September 30th to sign the bill into law.
