CHICAGO, January 25, 2023 /PRNewswire/ — Whether you’re a legislator, business owner or leader, or ordinary voter, one thing is clear: California it has become a dramatic case study of putting bad policies before good.
Last fall, the legislature passed a bill, AB257, or the FAST Act, almost entirely at the behest of organized labor’s firm grip on many of the state’s legislators. It makes it nearly impossible to run small business restaurants, but the impacts go much further. Under the FAST Act, an unelected council of political pundits, not local business owners and their teams, would make major decisions on crucial elements of running a business, fracturing the economy in the process.
As the head of McDonald’s US business and a California native, I have had reason to pay special attention to the bill and how it was passed. But the consequences of the legislation, and the lessons to be learned here, matter to all of us, particularly as the Golden State tries to emerge as a model for the rest of the country.
Advocates argued that this bill was about helping everyone, especially hard-working people employed in restaurants. But the facts just don’t support it.
There is no evidence to conclude that the FAST Act will better serve the needs of workers. That is not only my opinion, but also the conclusion of the state’s own experts. Of California The Finance Department said, “It is not clear that this bill will achieve its goal.oneThe Department of Industrial Relations (DIR) debunked a central argument of the FAST Act that claimed that wage theft was disproportionately high in quick-service restaurants. In fact, the DIR said that wage theft is up to five times lower in quick-service restaurants than in other industries.2
Three of the most prominent and credible media outlets in the country: The Wall Street Journal, Washington Post Y bloomberg unanimously said the bill was based on false promises, with one simply stating that it is a “recipe for higher restaurant prices and lower business and job growth.”3“
Economists estimated that AB257 would raise the price of eating at a quick-service restaurant in California by 20% at a time when fewer people can afford it.4
Even more baffling are the last-minute waivers that reek of secret special interest negotiations in sacrament (or maybe napa valley). One exception says that the law does not apply to certain restaurants that bake bread on site. Another exempts restaurant brands with fewer than 100 locations nationwide. Exceptions like these pit local businesses against each other and undermine the goal of helping all restaurant workers.
So how did it get this far?
After years of work and hundreds of millions of dollars, organized labor has failed to significantly increase its dues-paying member base in new industries. Take, for example, that in 2022, the unionization rate in the US (10.1 percent) was the lowest on record (in 1983, the first year for which data is available, the union membership rate was of 20.1 percent). Unions only gained 273,000 members in 2022 after four consecutive years of membership declensions in the preceding years.5
Simply put, organized labor has not succeeded in getting through the front door, giving everyday workers the ability to choose if they want a union. So she asked for a back door, pushing sacrament legislators to introduce, pass, and sign bad policy that hurts small businesses, workers, and consumers.
The top organized labor leader said legislation like AB257 “is the way we’re going to win the union part of our trip.6“By effectively creating a union bargaining table within the government, taxpayers will foot the bill for organized labor’s union drive.
More than 1 million Californians took notice and said they wanted the fate of this bill to be decided on a vote before they shouldered their burden, using Of California century old referendum process to stop it. This process was created over 100 years ago to give the people the power to control special interests.
But Of California legislators did not want the voters (or the State Constitution) to get in the way of their negotiation. So politically appointed government employees quietly moved in to enforce the law in the quiet cloak of the holiday season.
As a 20-year member of a company that operates in many different political environments across the country and around the world, this sounds a lot more like autocracy than democracy.
California Legal experts were outraged that the state did not “honor the right of the people to pass laws before they take effect.”7” The Wall Street Journal he said it was an embodiment of the demise of democracy in the state and surmised it was another reason why people and businesses were relocating.8
a judge in California finally ordered the state to stand still until the people had their say at the polls on November 5, 2024. And despite the court’s decision, the politically appointed employees went ahead and filed a request for $12 million and an army of well-paid lawyers to implement AB257.9 That’s just a drop in the ocean of what’s likely to come.
Let me be clear: We support legislation that leads to meaningful improvements in our communities, including responsible increases in the minimum wage. Our business works well when our employees and our communities work well.
Us welcome and support legislation that creates a level playing field and applies to all industries and all workers. We support legislation that has clear, meaningful, positive, and transparent results for the broader community and our restaurant teams. We applaud legislation that supports small business owners and the franchise business model, and that does not impede our ability to engage and meet the needs of employees and aligns with our values.
There are big and important issues that need the attention of legislators: inflation and rising costs, a deficit10 in it California state budget, housing crisis and economic uncertainty. Implementing costly and job destroying legislation like AB257 is not the answer.
The state is teaching us a powerful lesson about what our future could look like if this one-sided brand of democracy is imitated elsewhere or left unchecked in the Golden State. And this threat is real: Just last week, a Virginia legislator imported from California introduced almost identical legislationeleven that state leaders now have a chance to stop dead in their tracks. And no doubt they will continue to look for back doors in California.
Fortunately, California voters will have their say in 2024. In the meantime, if you see special interest legislation like this coming, workers, consumers, and small business owners need to come together and demand better.
joe erlinger President, McDonald’s USA
oneCalifornia Department of Finance: Department of Finance invoice analysis
2Employment Policy Institute: Not So Fast: Analysis of Labor Law Compliance at California Fast Food Restaurants
3WSJ: Of California fast food bill whopper
4UC Riverside: How workers’ comp increases could affect limited-service restaurant prices
5US Bureau of Labor Statistics: Union Membership Summary, January 19, 2023
6The Washington Post: California law stripping fast-food bosses of wage-setting power sparks fight
7OC Registry: An unlikely threat to popular democracy in California
8The Wall Street Journal: Democracy dies in California
9California State Budget Change Proposition
10The bond buyer: faced with a deficit, California the budget plan recovers the bonds
elevenHB 2478: Board of Standards for Workers in the Fast Food Industry
SOURCE McDonald’s USA