McDonald’s, In-N-Out and Chipotle are spending millions to block employee raises


New York
CNN

California voters will decide next year on a referendum that could overturn a landmark new law setting working conditions and minimum wages of up to $22 an hour for fast-food workers in the world’s largest state. country.

Chipotle, Starbucks, Chick-fil-A, McDonald’s, In-N-Out Burger and the owner of KFC Yum! The brands have each donated $1 million to Save Local Restaurants, a coalition that opposes the law. Other large fast food companies, business groups, franchise owners and many smaller restaurants have also criticized the legislation and spent millions of dollars opposing it.

The measure, known as the FAST Act, was signed into law last year by the governor of California. Gavin Newsom and was to come into effect on January 1. On Tuesday, California’s secretary of state announced that a petition seeking to block the law’s implementation had garnered enough signatures to qualify for a vote in the state’s 2024 general election.

The closely watched initiative could transform California’s fast-food industry and serve as a bellwether for similar policies in other parts of the country, supporters and critics of the measure argued.

The law is the first of its kind in the United States and authorized the formation of a 10-member fast food council comprised of labor, employer and government representatives to oversee standards for workers in the fast food industry. state fast food.

The council had the power to set minimum industry-wide standards for wages, health and safety protections, leave policies and remedies for worker retaliation in fast food restaurants with over 100 locations nationwide.

The council could raise the minimum wage for the fast-food industry to as much as $22 an hour, from a minimum of $15.50 for the rest of the state. From there, this minimum would increase each year in line with inflation.

The California fast food industry employs over 550,000 workers. Nearly 80% are people of color and about 65% are women, according to the Service Employees International Union, which has backed the law and the Fight for $15 movement.

Defenders of the law, including unions and labor groups, see it as a revolutionary model for improving wages and conditions for fast-food workers and overcoming barriers to unionizing workers in the industry. They argue that success in California could lead other labor-friendly cities and states to adopt similar councils regulating fast food and other service industries. Less than 4% of restaurant workers nationwide are unionized.

Labor law in the United States is structured around unions organizing and bargaining in a store or factory. This makes it almost impossible to organize workers in fast food and retail chains with thousands of stores.

The California law would bring the state closer to sectoral bargaining, a form of collective bargaining where workers and employers negotiate wages and standards across an entire industry.

Opponents of the law say it is a drastic measure that would have adverse effects. They argue it unfairly targets the fast food industry and will raise prices and force companies to lay off workers, citing an analysis by economists at UC Riverside which found that if workers’ compensation increase by 20%, restaurant prices would increase by around 7%. . If the wages of restaurant workers increased by 60%, prices at limited-service restaurants would increase by up to 22%, according to the study.

“This law creates a food tax on consumers, kills jobs and drives restaurants away from local communities,” the Save Local Restaurants coalition said.

On Wednesday, McDonald’s U.S. Chairman Joe Erlinger blasted the law as a struggling union-led law that would lead to “an unelected council of political insiders, not local business owners and their teams.” , making key business decisions.

Opponents have turned to a similar strategy used by Uber, Lyft and gig companies seeking to overturn a 2020 California law that would have required them to reclassify drivers as employees, not “independent contractors,” which would provide them with benefits such as minimum wage, overtime and paid sick leave.

In 2020, Uber, Lyft, DoorDash, Instacart and others spent more than $200 million to successfully persuade California voters to pass Proposition 22, a ballot measure that exempted companies from reclassifying their workers as than employees.

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