The legislature of California is looking to tighten regulations on fast food companies to improve working conditions for employees. Retailers are pushing back, and McDonald’s is among them.
Assembly Bill 257 (AB 257), which would form a fast food council to “set sectorwide minimum standards on pay, working hours, and other working conditions,” was passed by the California legislature earlier this week. Representatives from both workers and franchisees would sit on the council. The new requirements would affect fast food franchises with over one hundred outlets across the United States.
The bill claims that while fast food corporations benefited from the pandemic, California’s half a million fast food workers were affected hard. Fast food employees aren’t in a good position to share in a quick rebound and a more equal economy, despite the fact that corporations are making a lot of money.
It would open the door to many new opportunities for the state’s economy if this measure were to pass. Depending on the council’s deliberations, fast food employees could see an increase to a minimum pay of $22 per hour. Together, employees from different companies would have a stronger voice when they lobby for their rights.
The deadline for California Governor Gavin Newsom to sign the bill into law is September 30.
McDonald’s (MCD) USA president Joe Erlinger, among others, has spoken out against the plan. Restaurant lobbying groups also oppose it.
“To some, my support for increasing the minimum wage for workers may come as a surprise. In reality, I support laws that raise pay for everyone in the workforce, “It was Erlinger who made the remark.
Nonetheless, he warned that “California’s strategy targets some workplaces and not others” and that “this unfair, hypocritical, and ill-considered legislation damages everyone.”
Erlinger stated that this incident should serve as a “cautionary tale,” adding that it “would be dreadful” if other states followed California’s path.
The bill was opposed by the International Franchise Association as well. IFA President and CEO Matthew Haller issued a statement calling AB 257 “a discriminatory policy designed to harm the franchise business model.” Haller said that the bill would have an adverse effect on smaller franchise owners and cited a research that found that higher salaries may result in a 20% increase in menu prices. There is opposition to the bill from the National Restaurant Association as well.
While several organizations, such as the Economic Policy Institute, National Employment Law Project, and One Fair Wage, lobbied the state to enact the law in January, the state legislature ultimately decided against doing so.
President of the Service Employees International Union (SEIU) California State Council David Huerta issued a statement calling the bill’s passage “a crucial step forward to addressing California’s ongoing crises of racial and economic inequality,” noting that the vast majority of fast food workers in the state are people of color. According to him, “the only way to address the systemic challenges workers in this business confront is to give cooks and cashiers a true place at the table with their employers.”
According to SEIU president Mary Kay Henry, “the passage of AB 257 represents the most significant achievement in workers’ battle for fairness on the job in a decade.” The power of workers is rising across the country.