California voters decide how to regulate the fast food industry

LOS ANGELES — A California law creating a council with sweeping powers to set wages and improve working conditions for fast-food workers was stopped after restaurant and trade groups submitted enough signatures to put the issue before voters next year.

California State Department officials said late Tuesday that Save Local Restaurants, a broad coalition of small business owners, large corporations, restaurateurs and franchisees, had submitted enough valid signatures to prevent the law from going into effect.

The group, which has raised millions of dollars to oppose the law, had to submit around 623,000 valid voter signatures by early December to ask a question on the 2024 ballot asking California voters whether the law should go into effect .

A law signed into law by Gov. Gavin Newsom, a Democrat, in September would create a 10-member council made up of union officials, employers and employees to oversee labor practices in the state’s fast-food industry.

The panel would have the power to raise the minimum wage for fast-food workers to as much as $22 an hour — well above the national minimum wage of $15.50. In addition, the council would oversee health, safety and anti-discrimination rules for nearly 550,000 fast-food workers statewide.

Opponents, including the International Franchise Association and the National Restaurant Association, argued that the measure, Assembly Bill 257, would lock out their industry and in turn burden businesses with higher labor costs that would be passed on to consumers in higher food prices.

Matt Haller, president of the International Franchise Association, said the bill is “a solution to finding a problem that doesn’t exist.”

“Californiaans have spoken out to prevent these misguided policies from driving up food prices and destroying local businesses and the jobs they create,” Mr. Haller said.

Last year, the Center for Economic Forecasting and Development at the University of California, Riverside, released a study that estimated employers would pass on about a third of wage increases to consumers.

But Mr Newsom, while signing the measure, said it “gives hard-working fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry”.

Mary Kay Henry, president of the Service Employees International Union, a staunch supporter of the measure, attacked fast-food corporations.

“Rather than taking responsibility for ensuring workers who boost profits are paid a living wage and work in a safe, healthy environment, companies in the fast food industry continue to race to the bottom,” said Ms Henry . “This is morally wrong and bad business.”

Efforts to get the issue before voters follow a playbook used by big corporations to bypass Sacramento lawmakers. In 2019, state lawmakers passed a measure that required companies like Uber and Lyft to treat gig workers as employees. The companies opposed the measure and helped get a proposal for the 2020 vote that would allow them to treat drivers as independent contractors. The measure was accepted with almost 60 percent of the votes.

The Fast Food Act has been closely watched by industry workers across California, including Angelica Hernandez, 49, who has worked at McDonald’s restaurants in the Los Angeles area for 18 years.

“We are undeterred and refuse to back down,” Ms. Hernandez said. “We can’t afford to wait for a pay rise to keep up with the skyrocketing cost of living and support our families.”

Alison Morantz, a professor at Stanford Law School who focuses on labor law, said what makes the law unusual is “its holistic approach to solving a variety of problems in a traditionally non-union industry — not just low and stagnant wages, but also discrimination in the workplace and poor safety practices.”

“If enacted, it will be closely watched and could herald similar efforts in other pro-worker jurisdictions,” Ms. Morantz said.


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