California schools forced to compete with fast food industry for workers after minimum wage hike

SACRAMENTO, Calif. (AP) — Lost in the hubbub surrounding California’s new $20-per-hour minimum wage for fast food workers is how that raise could impact public schools, forcing districts to compete with the likes of McDonald’s and Wendy’s for cafeteria workers amid a state budget crunch.

The minimum wage law that took effect Monday guarantees at least $20-per-hour for workers at fast food restaurant chains with at least 60 locations nationwide. That doesn’t include school food service workers, historically some of the lowest-paid workers in public education.

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Yet demand for school meals is higher than ever in California, the first state to guarantee free meals for all students regardless of their family’s income. And demand is projected to fuel an increase of more than 70 million extra meals in California schools this year compared to 2018, according to the state Department of Education.

But these jobs typically have lots of turnover and are harder to fill. The minimum wage boost for fast food workers could make that even more difficult.

“They are all very worried about it. Most are saying they anticipate it will be harder and harder to hire employees,” said Carrie Bogdanovich, president of the California School Nutrition Association.

Statewide, some districts have already taken steps to compete in the new reality. Last year, the Sacramento Unified School District — anticipating the law’s passage — agreed to a 10% increase for its food service workers and other low-paying jobs, followed by another 6% increase July 1 of this year to bump their wages up to $20 per hour.

Cancy McArn, the district’s chief human resources officer, said it was the largest single raise in the district in nearly three decades.

“We are looking not only at competing with districts and comparing with districts, we’re also looking at fast food places,” McArn said.

In Southern California, San Luis Coastal Unified doubled its food service staff to 40 people after seeing a 52% increase in the number of students eating school meals. The district prepares 8,500 meals daily for 7,600 students across 15 school sites — breakfast, lunch and even supper options for youth in after-school sports and activities.

The district has since limited the number of its entry-level positions, which are the hardest to fill, while seeking to hire more for complex roles like “culinary lead” and “central kitchen supervisor” that require more skills and hours — making them more attractive to job seekers.

“That’s allowed us to be more competitive,” said Erin Primer, director of food and nutrition services for the San Luis Coastal Unified School District.

Tia Orr, executive director of the Services Employees International Union California — which represents both school food service workers and fast food employees — said school districts and other service industries must consider raising wages because of this new law.

“This is a good thing, and it is long overdue,” she said.

But some districts are limited in what they can do. In the Lynwood Unified School District in Los Angeles County, the starting salary for food service workers is $17.70 per hour and maxes out at $21.51 per hour, according to Gretchen Janson, the district’s assistant superintendent of business services. She said these workers only work three hours per day, meaning they aren’t eligible for health benefits.

Janson says the district is waiting to see how employees react, adding: “We just don’t have the increase in revenue to be able to provide additional funding for staff.”

Nuria Alvarenga has worked food service in the Lynwood School District for 20 years. She makes $21 per hour now, but said she could likely earn more in fast food.

While she said several co-workers were considering finding other jobs, she hasn’t decided yet what she will do. She normally works at an elementary school, but has been filling in recently at a high school where she enjoys seeing former students recognize her as they stand in line for lunch.

“I’m so glad they still remember me,” she said.

School food service workers have gotten more support in recent years under a state push to expand school meals and make them more nutritious. That included $720 million in recent years for upgrades to school kitchens to better prepare fresh meals, plus $45 million to create an apprenticeship program to professionalize the industry.

It would be difficult for lawmakers to mandate a raise for school food workers given the complexities of the state’s school funding formula. That’s why some advocacy groups, including the Chef Ann Foundation, proposed a state-funded incentive program that would have given school food workers who completed an apprenticeship program a $25,000 bonus payable over five years.

That idea didn’t make it into Democratic Gov. Gavin Newsom’s budget proposal released in January. The state is facing a multibillion dollar budget deficit, limiting new spending.

Click here to read the full article in AP News

New $20 minimum wage for fast food workers in California is set to start Monday

LIVERMORE, Calif. (AP) — Most fast food workers in California will be paid at least $20 an hour beginning Monday when a new law is scheduled to kick in giving more financial security to an historically low-paying profession while threatening to raise prices in a state already known for its high cost of living.

Democrats in the state Legislature passed the law last year in part as an acknowledgement that many of the more than 500,000 people who work in fast food restaurants are not teenagers earning some spending money, but adults working to support their families.

That includes immigrants like Ingrid Vilorio, who said she started working at a McDonald’s shortly after arriving in the United States in 2019. Fast food was her full-time job until last year. Now, she works about eight hours per week at a Jack in the Box while working other jobs.

“The $20 raise is great. I wish this would have come sooner,” Vilorio said through a translator. “Because I would not have been looking for so many other jobs in different places.”

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The law was supported by the trade association representing fast food franchise owners. But since it passed, many franchise owners have bemoaned the impact the law is having on them, especially during California’s slowing economy.

Alex Johnson owns 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, prompting him to lay off his office staff and rely on his parents to help with payroll and human resources.

Increasing his employees’ wages will cost Johnson about $470,000 each year. He will have to raise prices anywhere from 5% to 15% at his stores, and is no longer hiring or seeking to open new locations in California, he said.

“I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard,” Johnson said.

“I have to consider selling and even closing my business,” he said. “The profit margin has become too slim when you factor in all the other expenses that are also going up.”

Over the past decade, California has doubled its minimum wage for most workers to $16 per hour. A big concern over that time was whether the increase would cause some workers to lose their jobs as employers’ expenses increased.

Instead, data showed wages went up and employment did not fall, said Michael Reich, a labor economics professor at the University of California-Berkeley.

“I was surprised at how little, or how difficult it was to find disemployment effects. If anything, we find positive employment effects,” Reich said.

Plus, Reich said while the statewide minimum wage is $16 per hour, many of the state’s larger cities have their own minimum wage laws setting the rate higher than that. For many fast food restaurants, this means the jump to $20 per hour will be smaller.

Click here to read the full article in AP News

Fast Food Restaurant Owners Brace As $20 Minimum Wage Law set To Go Into Effect Next Week

New law causing more layoffs, reduced hours across state

photo of cheeseburger and french fries
Photo by Isaac Taylor on Pexels.com

With only a week to go before the AB 1228 $20 fast food minimum wage law comes into effect, restaurants across California continue to make last minute firings, employee hours cuts, and other measures to remain profitable and stay in business.

Following the signing of AB 1228 in October by Governor Gavin Newsom, the new $20 minimum wage for fast food employees, a massive jump from the $16 minimum wage, has had multiple companies take extreme measures. Some, like Chipotle and McDonalds, have announced already raised prices before the wage raise date of April 1st. Others are investing in automated kiosks and other automated devices to help reduce the number of employees. Some stores outright closed.

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Most notable, however, has been the massive amount of layoffs. Already, over 1,200 Pizza Hut drivers have had announced lay-offs, with drivers to be replaced by services such as DoorDash and Uber Eats in the coming months. Roundtable Pizza has also done the same with many of their delivery drivers, with many other chains currently also looking into doing the same for deliveries. Seeing signs of massive layoffs ahead, many workers have even transitioned out to other lines of work in anticipation.

In recent weeks it has got even messier. Panera Bread, which was originally exempt over having in-store bakeries and selling bread on stand-alone, voluntarily went to the $20 wage following accusations that Governor Gavin Newsom had allowed the exception to take place to benefit a major donor. AB 1228 bill author, Assemblyman Chris Holden (D-Pasadena), recently also created a new bill that would grant numerous exemptions to the bill in an attempt to lighten the economic blow of AB 1228. However, as the Globe noted, AB 610 does anything but cleanup the mess caused by AB 1228.

While there have been attempts to try and spin this as a major labor win, with the Service Employees International Union (SEIU) launching the new and largely toothless California Fast Food Workers Union in February, fast food restaurant owners and managers have been bracing for the worst. Now, with a week left, many stores are scrambling to cut back employee hours, fire employees, set up lines so fewer employees are needed, and figure out what hours to close during the day during slow hours.

“This is what is incredibly stupid of the bill,” said “Annette”, an owner of a sandwich chain restaurant in Upstate California to the Globe. “If I still lived in LA, a $20 minimum wage would have been a major pain. Sure, you get customers coming in, but there are a lot more expenses for a restaurant there. I mean, taxes alone. Then, up here. You can have a restaurant in Siskiyou County or Shasta County where taxes are cheaper, but you still struggle with fewer customers. You can even have a spot on the Interstate on the 5, but there wouldn’t be enough traffic or cars coming in to justify the $20 an hour.

“It was a flat increase. You need to take into account a ton of variables. They were just thinking of the cost of living for employees. But that should just be one factor out of many. You have to go by county or by city. And you hit the nail on the head by pointing out just how much we are investing in automation and technology. It has been killing a lot of industries for years, especially blue collar ones. And now it is going after minimum wage jobs like these all thanks to new laws like these.”

$20 an hour hurting businesses

Another, a KFC franchisee, told the Globe “Major hour cutbacks for sure are happening here. We already kept it below 32 so not many are considered full time. But now we’re looking at the equivalent of giving them another shift off. We’re doing the same with less and consolidating tasks or having people only be at the register when customers are there.

“So people have been doing the math on $20 per hour. You know, $800 a week, or $41k  a year. So, first of all, virtually no fast food worker works that long. This is a part time gig for kids, or if they’re lifers, they do two or three stores to make the equivalent of a full time job. And that’s all before taxes.

“Where it becomes a problem for us is, obviously, the costs. But, for a silver lining, we are now putting the few people above the 32 hours mark well below 30 now, so a lot of benefits just went out the window for them. I’m not using any glee or anything here. It sucks and we really wanted to do right by our employees as much as possible. But this $20 ruins that. If you see more people working 2 or three jobs or are frustrated by not having any customer service, thank AB 1228. We’re doing what we can to make this work, but they aren’t giving us any wiggle room.”

One of his employees, Pedro, who has worked there for almost 15 years, added that “My hours are being cut. This pay raise from the minimum wage is doing nothing because of that. So now I’m looking to take on another job to make ends meet. Which is hard now, as a lot of fast food workers are doing the exact same thing as me since they are in the same position all within the same industry. And I voted for these people who approved this.

Click here to read the full article in the California Globe

California’s $20 Minimum Wage Fast Food Bill Gets Even Messier

‘It’s so flawed, you are exempting people and additional industries from the bill’

The fast food bill, California’s new $20 minimum wage law has a “cleanup” bill, Assembly Bill 610, which is supposed to… well… clean up the mess made by Assembly Bill 1228. At least that is what we are supposed to think. But AB 610 opened a new can of worms Monday, adding many new exemptions, and it has some Capitol watchers scratching their heads on the Republican votes.

In late February, the Globe reported that California Governor Gavin Newsom facilitated the exemption for a longtime friend from high school, donor and the billionaire who owns Panera Bread, from California’s new $20 minimum wage law. The exemption was written to the Panera Bread business model: A business operating a bakery and selling bread as a standalone menu item since September 2023, was exempted from AB 1228. Greg Flynn owns more than two dozen Panera Bread locations in California. And in addition of being a high school chum, Flynn contributed at least $164,800 to Newsom’s political campaigns, we learned.

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The Globe and other news outlets received a cheeky email from Newsom’s Deputy Communications Director Alex Stack insisting that all of the media which reported on the preferential treatment of a Newsom donor and old friend was “absurd,” and that “it appears Panera is not exempt from the law.”

It was not a good look for the Governor, who sees himself sitting behind the Resolute Desk one day.

With all of the backtracking and denials, the situation actually looks worse today. While the real scandal is that Gov. Newsom was only too happy to grant a special exemption in a terrible bill for a friend, the governor was perfectly okay with forcing all other fast food businesses in California to pay the exorbitant $20 minimum wage, and bow at the altar of Newsom’s new Fast Food Council.

Making a bad situation and legislation worse, the “cleanup” bill to AB 1228,  Assembly Bill 610 by Assemblyman Chris Holden (D-Los Angeles), was debated on the Assembly floor Monday over numerous additional business exemptions to the fast food $20 minimum wage and new fast Food Council – as if that will make Panera Bread’s exemption a little less sleazy.

Assembly Republican Leader James Gallagher (R-Yuba City) spoke strongly in opposition to the bad policy, and said as the cost of living continues to rise, this bill will make it much worse, and lead to even more job losses.

“It’s so flawed, you are exempting people and additional industries from the bill,” Gallagher said. He asked if the bill is so great, then why are so many exemptions needed?

He also lambasted the gut-and-amended bill, as well as the behind-closed-doors-process it took to pass AB 1228, as well as Gov. Gavin Newsom’s heavy hand on it. Democrat floor leadership shut him down on that line of reply.

Leader Gallagher asked why the bill needed a “clean up,” which often happens after a bad piece of legislation is hastily passed and signed into law – the supposed unintended consequences get rectified and “cleaned up” in new legislation.

So what does AB 610 now propose to exempt?

The bill language says: “This bill would exempt additional restaurants from the definition of “fast food restaurant,” including such restaurants in airports, hotels, event centers, theme parks, museums, and certain other locations.”

What are these locations? Assembly Floor Analysis says:

A “fast food restaurant” shall not include a restaurant that is any of the following:

a) Located in an airport, as defined, but excluding any military base or federally operated facility.

b) Connected to or operated in conjunction with a hotel, as specified.

c) Connected to or operated in conjunction with an event center. “Event center” means a publicly or privately owned structure of more than 20,000 square feet or 1,000 seats that is used for the purposes of public performances, sporting events, business meetings, or similar events, and includes concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers. “Event center” also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event center’s purpose.

d) Connected to or operated in conjunction with a theme park, as specified.

e) Connected to or operated in conjunction with a public or private museum, as defined.

f) Connected to or operated in conjunction with a gambling establishment, as defined.

g) for-profit corporation and its affiliates. ii) Primarily or exclusively serves employees of that corporation or its affiliates.

h) Located on land owned by the state, a city or county, or other political subdivision of the state, that is part of a port district or land managed by a port authority or port commission, a public beach, public pier, state park, municipal or regional park, or historic district, and is operated pursuant to a concession agreement or food service contract.

Think about this – AB 610 will exempt fast food restaurants in airports, hotels, event centers, theme parks, museums, gambling establishments, corporate campus cafeterias, and Publicly owned lands including ports, piers, beaches and parks concessions – not just from the $20 an hour minimum wage starting April 2024, but also from regulation by Gov. Newsom’s creepy new Fast Food Council, which the Globe has reported on as government expansion and control.

So if you own a Taco Bell on Broadway, you don’t get the exemption. But if you own a Taco Bell at the Sacramento International Airport, you’re good to go.

Even more interesting following the debate and indefensible “exemptions,” was the vote.

A number of Republicans abstained from voting.

Click here to read the full article in the California Globe

California’s fast food workers are getting a raise. But the labor-industry truce is fraying

Both sides billed the high-profile California fast food deal last year as a resolution to two years of escalating political tensions. 

One of workers’ biggest wins in the Legislature during “hot labor summer,” the agreement in the session’s final week resulted in a minimum wage hike for employees and some guarantees for companies. In exchange, the industry agreed to stop fighting the issue at the ballot box and lawmakers backed off on even stricter regulations.

But a month before the new wage — $20 an hour for workers at fast food chains with 60 or more locations nationally — goes into effect, the temporary truce is unraveling. 

As the Legislature pushes through a bill exempting fast food restaurants in airports, hotels and convention centers, Republican lawmakers who had vehemently pushed back on the wage hike are calling for the deal to be investigated, after Bloomberg reported that Gov. Gavin Newsom pushed for a bakery exemption that benefited a donor who owns two dozen Panera locations in California. 

On Thursday, Newsom’s office denied the story and said their lawyers believe Panera and other chain bakeries aren’t actually exempt — a decision that could lead numerous additional businesses to scramble to prepare for a wage hike. In a Bloomberg story Friday, billionaire Greg Flynn says he did not seek a special exemption, though he met with the governor’s staff along with other restaurant owners to suggest a carve-out for “fast casual” restaurants. On Saturday, the California Restaurant Association weighed in, saying there was never any discussion of any brand seeking an exemption, including Panera. And in an interview with KNBC aired Sunday, Newsom, himself, called the report “absurd.”          

The Service Employees International Union, which pushed for the legislation, said it agreed with Newsom’s reasoning. Senate Republican leader Brian Jones called for scrapping the fast food agreement altogether.

The renewed fights have moved to the local level, too. 

Some franchise owners are cutting jobs in advance of the minimum wage increase, while workers have begun pushing for additional benefits in San Jose and Los Angeles, prompting businesses to gear up to lobby back.

Worker advocates are also pledging to push for job security measures once a first-in-the-nation fast food regulatory council (another part of the deal) is in place. On Friday, Newsom announced his seven appointees to the council, including Chairperson Nicholas Hardeman, chief of staff to state Senate leader emeritus Toni Atkins. The governor’s other picks are a mix of franchisees, workers and others. Legislative leaders picked the final two members, both union leaders.

And some McDonald’s franchise owners, who have complained they were frozen out from last year’s deal-making, are retaliating against state lawmakers who supported it as they seek other public offices in Tuesday’s primary. The new California Alliance of Family Owned Businesses PAC formed earlier this year as an offshoot of prior lobbying by owners of local McDonald’s restaurants.

Its opening salvo: attack mailers against Assemblymembers Chris Holden, a Pasadena Democrat running for the Los Angeles County Board of Supervisors, and Kevin McCarty, a Sacramento Democrat running in a crowded primary for mayor. 

“In order to protect our family businesses in California now and into the future, it has become clear that we must more actively engage in politics across the state,” Kerri Harper-Howie, an alliance board member and a McDonald’s owner in Los Angeles County, said in a statement. “Politicians should know that if they agree to carry water for those who threaten our businesses, they will be opposed.”

Holden authored the bill forming a fast food council and mandating the wage hike, while McCarty was one of many Democrats who voted for it. The PAC has spent more than $300,000 against each. McCarty’s campaign manager Andrew Acosta said business owners are “trying to punish him for standing up for workers rights and higher wages.”

The PAC is also spending in an Inland Empire Assembly primary and in favor of Assemblymember Tim Grayson’s bid for the state Senate. Grayson, a Concord Democrat, voted in favor of the fast food deal last year.

The franchisee committee has spent more than $1.8 million so far this year. That’s not much compared to the tens of millions of dollars fast food giants such as McDonald’s and national industry groups poured into a campaign account for the effort to repeal the 2022 fast food law. The referendum was ultimately pulled from the ballot in last year’s deal. But it indicates the increasing activity of franchise owners in state and local politics. 

Marisol Sanchez, who owns 14 McDonald’s restaurants in the High Desert north of San Bernardino and helps run her family’s larger franchise business, said she never got involved in politics before last year. But when SEIU pushed a bill forcing fast food corporations to share liability for labor violations with franchise owners, Sanchez saw “the destruction of the franchise model, and basically … the destruction of my livelihood.”  

“It was a quick jumping into action,” she said, which involved meeting with lawmakers and now, contributing to the PAC. 

The joint liability bill ultimately became a bargaining chip to force a deal on the $20 wage. Sanchez said franchise owners were the “collateral damage.” She attributes that in part to a prior lack of political organizing by franchise owners.

“We weren’t communicating and organizing,” she said. “I think we took for granted that the community understood that we were not all corporate-owned restaurants.”

She said she’s always tried to offer starting wages of $1 more than the minimum wage, and had been in the middle of an expansion in recent years, buoyed in part by more Californians moving inland during the COVID pandemic. But she’s cutting back in advance of the wage hike, putting off a drive-thru remodel and slowing down hiring. 

The union that pushed for the deal criticized the new PAC, but said it would be unsuccessful.

“It’s shameful for these multi-billion dollar corporations to attack these pro-worker champions — and voters are going to see right through it,” Arnulfo De La Cruz, president of SEIU Local 2015, said in a statement.

Restaurant giants and a handful of local franchise owners have also registered this year to lobby in San Jose, where the new Fast Food Workers Union is pursuing a city ordinance mandating employers provide paid time off, predictable scheduling and “know your rights” training.

The union in recent weeks accused one city council member, David Cohen, of reconsidering his support in response to industry influence. Several franchise owners this month contributed to a new PAC whose main spending so far has been to send $18,000 to another political action committee that has bought ads against Cohen’s opponent in his re-election bid. 

Click here to read the full article in CalMatters

California’s War on Fast Food Jobs

Higher prices created by a $20 minimum wage for burger joints will lead to fewer customers, reduced profits, fewer restaurants, and a loss of jobs.

During a recent meal at a family-run restaurant in a small town, I noticed that the owners included in the menu an apology note to customers for the high prices they were charging. We all understand the owners’ predicament, as inflation has driven up the costs of pretty much everything, especially groceries. Nevertheless, customers who try to live within their budgets have little choice but to pare back their unnecessary restaurant trips.

I’m not the only one doing so. “Rising labor and food costs, ballooning interest rates, and corporate brand owners’ demands for upgrades and operational improvements have strained profitability for a number of fast-food chain operators,” according to a recent Bloomberg Law article focusing on increasing numbers of restaurant franchise bankruptcies. Inflation is hitting every industry, but those reliant on discretionary spending will suffer the most.

One would have expected the California Legislature to have recognized this industry’s ongoing, post-COVID problems before adding to their burden. Lawmakers need only wander around the Capitol and notice the large number of long-time eating establishments that have shuttered. And yet one of their signature legislative accomplishments this year will only hasten restaurant closures and job losses.

No matter what happens in broader society, we can always count on the California Legislature to do the bidding of the state’s powerful unions, which are committed to little else beyond boosting their membership rolls—whatever that might mean for the broader economy. And so the state recently agreed to a deal that will dramatically increase fast-food wages and make it more difficult for private companies to set their own operating policies.

In 2021, the Legislature introduced the Fast Food Accountability and Standards (FAST) Act, which echoed the European sectoral-bargaining model whereby a government commission sets the wages and working conditions in an industry. This radical idea would have essentially given unions control over the industry—saving them the difficulty of actually organizing workers.

Although that effort failed, the Legislature in 2022 passed two nearly as significant laws, per the pro-union OnLabor website: First, Assembly Bill 102 revived the moribund Industrial Welfare Commission and gave it the powers of a sectoral-bargaining commission. Second, Assembly Bill 1228 would have raised fast-food minimum wages to $22 an hour with an annual upward ratchet.

It also “would have made franchisors jointly liable for labor violations—a long sought-after provision that was taken out of the final version of the FAST Act,” On Labor added. The wage hike was problematic, but making national fast-food companies liable for labor violations at independently owned franchises would have destroyed the franchise model in California.

These laws posed existential threats to the restaurant industry, which then qualified a referendum on AB 1228 for the 2024 general election. In September, Gov. Gavin Newsom announced a “truce.” The industry pulled its ballot measure and agreed to a $20 minimum wage. In return, Newsom and unions limited the power of the Fast Food Council and removed joint-liability provisions.

The restaurants spared themselves a multimillion-dollar ballot fight, gained a lower wage, and preserved franchising, but the net result will be the same. A government agency will grab many management powers. Wages will go up early and often. Labor costs account for one-third of fast-food costs, so prices will rise. McDonald’s and Chipotle already have announced higher prices for next year.

The unions are claiming a victory for workers, but it’s not hard to guess the result. Higher prices will mean fewer customers and reduced profits. That means fewer restaurants and fewer jobs. Although the legislation only applies to fast-food chains with more than 60 outlets, it will drive up costs for mom-and-pop restaurants. They will have to compete for workers with chains that must pay a much-higher wage.

That’s not the only bad news. “Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount—and, if it is not, that worker is unlikely to be employed,” wrote famed economist Thomas Sowell. In other words, restaurants will not hire people who aren’t productive enough to justify the wage.

It will be tougher for young workers who lack job skills and for disabled people to get these jobs. I’m already noticing a higher percentage of older workers at fast-food establishments. I’m also noticing far more kiosks. Let’s be blunt: Fast-food work isn’t meant to be career work for most people. These are great ways to earn quick cash and learn basic skills, which can then be leveraged into better jobs as people build better lives for themselves. Unions and progressives want to take this approach to other industries.

Click here to read the full article in Reason.com

California food prices could get even more expensive as fast food wages set to increase

LOS ANGELES – The rising cost of groceries has left consumers feeling the pinch, and now, as California greenlights a $20 minimum wage for fast food workers, residents are bracing themselves for potential price hikes in the fast food industry. 

In September, a moment of victory and applause reverberated when Governor Gavin Newsom signed into law a $20-an-hour minimum wage for fast food workers, like Anisha Williams, marking a significant increase from the existing rates. 

While some larger fast food franchises, such as Chipotle, currently promise $16.25 per hour, the state minimum wage is set to rise to $17 an hour in January, with the new wage for larger fast food franchises reaching $20 an hour in April.

This significant pay raise for fast food workers may have unintended consequences for consumers.

McDonald’s and Chipotle are already in discussions about raising their prices to offset the increased labor costs. 

Even before this wage increase takes effect, customers are feeling the financial impact of dining out.

Brianna Sosana, a resident of Huntington Park, reminisced about the days when meals could be bought for just a dollar, whereas now, a simple meal can easily cost $10 or more. 

Tina Carranza from Bell Gardens expressed concerns about the rising prices and the potential burden on families, with a single meal costing up to $20.

Caila Glickman, a Silver Lake resident, highlighted the challenge of affording fast food meals, noting that lunch often costs her more than $15, which is unsustainable for her daily expenses.

While many recognize that they pay for the convenience and speed of fast food, some individuals, like Brenda Perez, a Huntington Park business owner, are willing to adapt if prices increase significantly, but they acknowledge that such an increase would need to be substantial to deter them from frequenting these establishments.

Click here to read the full article in Fox11

Do You Want Fries With That Shakedown?

California’s government has outdone itself with AB 257, a controversial sop to unions that will hurt the poor and raise prices in the fast-food industry.

There’s a joke circulating in California that goes like this: What’s the difference between the Titanic and the state of California? Answer: The Titanic went down with its lights on.

You don’t have to live here to get the dark humor, though it helps. Governor Gavin Newsom led the effort to eliminate oil drilling and ban the sale of new gas-powered vehicles beginning in 2035 — and simultaneously begged us not to run the AC or charge electric vehicles during California’s annual sizzling farewell to summer.

So, few of us were surprised when, on Labor Day 2022, the governor signed Assembly Bill 257, which promises to rescue the poor but will in fact immiserate them. The law was set to go into effect today but has been put on hold by a judge, for now.

Called the FAST Recovery Act, the new law will do for unions what decades of organizing could not accomplish in the dynamic fast-food business. It neatly eliminates the hard work of organizing unwilling workers by declaring them wards of a state commission comprising 13 political appointees who will govern work and wages in California’s fast-food businesses.

In California, political appointees like those proposed in AB 257 are manufactured by the legislature’s Democratic supermajority. That veto-proof majority, in turn, is curated by union leaders — people who raise in excess of $1 billion annually through union dues and spend much of that cash to finance the campaigns of candidates who, once in office, return the favor by doing what the unions tell them to do — things like passage of AB 257.

The smart money says California’s elected officials will hustle to appoint union-friendly commissioners who will quickly impose on fast-food operators a $23 hourly wage, more costly benefits, and molecular regulation of work rules.

In an industry that operates on razor-thin margins, this will have two immediate predictable outcomes. On the worker side, higher wages, richer benefits, and more cumbersome labor laws will lead to job cuts as franchise operators seek to curb their skyrocketing labor costs. In some places, restaurant owners will rapidly automate; ATM-like ordering kiosks will replace actual people — primarily immigrants and other minority people who, by way of the fast-food business model, are just beginning their ascent on the American economic ladder. Other business owners may simply sell off to larger enterprises whose high volumes will allow them to cope with slimmer margins. That will make it harder for workers to rise into positions of management and ownership.

On the customer side, as some franchisees simply close permanently, we’ll see the expansion of what progressives have called “food deserts” in poor communities already underserved by grocery chains. Customer service in the remaining stores will decline and prices will rise.

So, in a kind of grim partnership, poor customers and rising workers, immigrants and the native-born, will suffer together. This is the iron law of California progressivism: Claim that new laws will help the poor. When the actual effect turns out to be catastrophic for the poor, blame capitalism/markets/billionaires/racism, and expand government control of the business. Rinse, repeat, and promote as a national — even global — model for equity. And if Californians have anything to say about it, AB 257 will be coming to you, no matter where you live in the United States.

The most eye-popping criticism of AB 257 came from California’s own Department of Finance. In June, the department recommended that legislators vote against the bill. Its analysis concludes with language that can be applied to much of California’s regulatory empire, and is worth quoting in its entirety:

Finance is opposed to this bill because it creates significant ongoing costs at DIR [the state Department of Industrial Relations]. Additionally, it creates a sector-specific rule-making body within DIR, which could lead to a fragmented regulatory and legal environment for employers and raise long-term costs across industries. Finally, it is not clear that this bill will accomplish its goal, as it attempts to address delayed enforcement by creating stricter standards for certain sectors, which could exacerbate existing delays.

“Not clear”? In California, it’s absolutely clear that AB 257 — now law — will not accomplish its goal.

Where is such a bad idea conceived? Partly in academia, where professors celebrate as progress the imposition of a failing European model of government–labor–business “cooperation.” Writing in Fortune, Thomas Kochan exulted that, with AB 257, “California has a unique opportunity to launch a path-breaking high-road business and employment strategy for owners and workers in its fast food industry.” He hopes that its success will spread “across the nation.”

(Note to Dr. Kochan: You’re professor emeritus at MIT’s much-honored Sloan School of Management. I just live and work in California. But please, never, ever use any form of the infinitive “to break” and “California” in the same sentence. It’s what people in your school’s psych department call a Freudian slip.)

In California, the engine running AB 257 is organized labor, particularly the Service Employees International Union (SEIU) and its national “Fight for $15” activist wing.

SEIU has struggled lately. In part that’s because the Supreme Court’s 2018 decision in Janus v. AFSCME made government-union membership voluntary. Nearly 30 percent of government workers eligible to join SEIU and other unions have responded by hitting the eject button. The hundreds of dollars those workers save on annual union dues means lost revenue to the unions hoping to represent them. (Disclosure: California Policy Center, where I am president, has played a leading role in helping workers leave their unions.)

That rush to the union’s exits has created a cash crisis at SEIU. The union responded by pushing AB 257 with the expectation that the Fast Food Council will move rapidly to recommend universal membership in SEIU as the only solution to low pay and dangerous work conditions.

About those work conditions: Many media reports banging the drum for AB 257 relied on a UCLA Labor Center study that claimed to discover that working at your favorite burger joint is like cobalt mining. Vox cited UCLA’s finding that “43 percent of workers experienced workplace injury or illness, nearly half experienced verbal abuse, and a quarter said they were retaliated against by their managers for reporting workplace issues.” So did the Los Angeles Times, the San Francisco ChronicleCalMatters, and the Sacramento Bee.

Reporters were so eager to amplify a story about industrial “wage theft,” “workplace injuries,” and medieval exploitation that none took the time to examine UCLA’s study. In fact, recently published internal UCLA documents reveal that “the study was part of a larger advocacy strategy by the SEIU and its Fight for $15 campaign.” Specifically, the documents show that UCLA’s “independent” researchers outsourced the labor of recruiting and surveying fast-food workers to SEIU. When the study was released, enthusiastic reporters asked to interview the aggrieved workers. Then, UCLA’s documents show, “those labor groups even took efforts to obscure” the snuggly relationship between researchers and union activists.

You might be tempted to say that because the UCLA study was junk — corrupt, in fact — we may never know how truly grim things are in the fast-food business. But we do know: You are in fact safer working in a fast-food restaurant than in most other industries.

Newsom’s signature on AB 257 was still wet when SEIU unleashed its national media campaign promoting the California law as the solution to labor problems everywhere. “This is LANDMARK labor legislation that presents a way forward for fast food workers in this country,” SEIU said over and over. Using the hashtags #UnionsForAll and #AB257, union activists in TexasFloridaMissouri, and beyond posted photos of workers spontaneously celebrating California’s win as their own. Were they moved by the spirit of international labor, roused by their own personal experience? They were not. Their messages were crafted and amplified by one of California’s largest unions.

Let’s summarize: AB 257 will likely kill the jobs of immigrant and poor men and women who want to work in the fast-food industry — because this work, however difficult, is better than the alternatives. It imposes what union organizers could not achieve through voluntary association. It will raise food prices and limit food options in already struggling neighborhoods. It is opposed by the very regulatory body that is supposed to supervise its implementation. Its passage relied in part on a corrupt “study” by a major state university working with the union that will benefit from the new law.

It’s now likely that AB 257 will be opposed at the ballot box. As soon as Newsom signed the bill, an association representing fast-food businesses began gathering signatures for a statewide ballot proposition to repeal it. On December 9, the California secretary of state’s office declared that the association had submitted more than the minimum number of signatures to qualify the measure for the November 2024 ballot. Under California law, that should have postponed implementation of AB 257. Instead, the state’s Department of Industrial Relations announced it would dispense with a century of case law and impose the law on January 1. On December 29, the association announced it will sue the state to uphold its own laws. One day later, on December 30, a state judge cut the baby in half: The state can begin considering appointments to the commission, but it can’t change wages or work rules.

Click here to read the full article in the National Review

California Union Alleges That Fast-Food Effort to Block New Labor Law is ‘Willfully Misleading Voters’

California’s largest union on Thursday lodged a complaint with state officials alleging that a fast-food industry coalition violated state election rules in its campaign to block a landmark labor law from going into effect.

The complaint by Service Employees International Union California, which was filed both with California’s secretary of state and its attorney general’s office Thursday, focuses on a referendum filed in September seeking to repeal AB 257, which Gov. Gavin Newsom signed into law on Labor Day. The union sponsored the legislation, known as the Fast Recovery Act, to boost protections for fast-food workers. 

The union alleges that in a sprint to qualify the referendum for the November 2024 ballot, business trade groups, fast-food corporations and franchisees are backing a vigorous and costly voter signature-gathering process that is “willfully misleading voters.” Hired petition circulators for the referendum, according to the complaint, have approached voters and asked them to sign the petition under the false pretense that the effort seeks to raise the minimum wage for fast-food workers.

Instead, the referendum effort would allow voters to decide whether to overturn the Fast Recovery Act, which creates a first-of-its-kind council of workers, company representatives and state officials with the authority to raise the minimum wage for franchise restaurant workers as high as $22 next year.

The council has a mandate to set minimum industry standards on wages, working hours and other conditions for fast-food workers statewide. It’s a model that could transform the way workers negotiate standards with their employers not just in California but across the U.S.

Throughout the legislative process, fast-food corporations and franchisees argued it unfairly singled out their industry, and would burden operations with higher labor costs and cause food prices to skyrocket.

Save Local Restaurants, the coalition pushing to overturn the law, said in a statement that it “has been vigilant in maintaining compliance with California’s election laws” and added that it finds the complaint “frivolous.”

“This is another brazen attempt by the SEIU to force a law on Californians that they do not want and that they cannot afford,” said the coalition, which is spearheaded by the International Franchise Assn. and the National Restaurant Assn. 

The coalition said, in line with past critiques, that the new law would raise food prices and ultimately “cost thousands of jobs, and force the closure of local businesses.”

The coalition said it has collected “nearly a million” signatures thus far: “We are on track to collect hundreds of thousands of signatures above what is legally required due to the voters’ overwhelming opposition to this misguided law.”

It’s standard practice to collect more than the minimum number of signatures because some signatures may be deemed invalid.

The complaint alleges several instances of petition signature gatherers misrepresenting the issue. One contracted circulator in Los Angeles repeatedly said the petition “was for the minimum wage to go up,” while another in Stockton, Calif., asked for a signature on a “petition that will raise the minimum wage for fast food workers to 22 bucks an hour,” according to the complaint.

Click here to read the full article in the LA Times