McDonald’s, In-N-Out and Chipotle are spending millions to block raises for their workers | CNN Business


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

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

The measure, known as the FAST Act, was signed last year by California Gov. Gavin Newsom and would take effect on January 1. On Tuesday, the California secretary of state announced that a petition to halt implementation of the law had gathered enough signatures. to qualify for one vote on the state’s 2024 general election ballot.

The closely watched initiative could transform California’s fast-food industry and serve as a benchmark for similar policies in other parts of the country, advocates 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 made up of labor, employer and government representatives to oversee standards for workers in the state’s fast food industry.

The council had the authority to set industry-wide minimum standards for wages, health and safety protection, time off policies, and remedies against worker retaliation at fast-food restaurants with more than 100 locations across the board. Nacional level.

The council could raise the fast food industry’s minimum wage up to $22 an hour, compared to the $15.50 minimum for the rest of the state. From there, that minimum would rise annually based on inflation.

California’s fast food industry has more than 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.

Advocates for the law, including unions and labor groups, see this as an innovative model for improving wages and conditions for fast food workers and overcoming obstacles to unionizing workers in the industry. They argue that success in California may lead other worker-friendly cities and states to adopt similar boards regulating the 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 that organize and bargain at an individual store or plant. This makes it nearly impossible to organize workers at fast food and retail chains with thousands of stores.

The California law would move the state closer to industry bargaining, a form of collective bargaining in which workers and employers negotiate wages and standards across an industry.

Opponents of the law say it is a sweeping move that would have detrimental effects. They argue that it unfairly targets the fast food industry and will raise prices and force companies to lay off workers, citing an analysis by UC Riverside economists that found that if restaurant workers’ compensation increases by 20%, prices of restaurants would increase by approximately 7%. . If restaurant workers’ compensation increased by 60%, limited-service restaurant prices would increase by as much as 22%, according to the study.

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

On Wednesday, McDonald’s US Chairman Joe Erlinger slammed the law as one pushed by struggling unions that would lead to “an unelected council of political pundits, not local business owners and their crews,” making key business decisions.

Opponents turned to a similar strategy used by Uber, Lyft and gig companies seeking to repeal a 2020 California law that would have required them to reclassify drivers as employees, rather than “independent contractors,” which would provide them with benefits such as 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 employees.

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