Cynical Legislation to Destroy Jobs

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I have read a lot of legislation over the years, but never have I read a piece of  legislation quite as cynical as California’s AB257 Fast Food Accountability and Standards Act passed by the Legislature and signed by Gallivanting Governor Newsom. The people who created this legislation obviously think we are all fools. Allowing this to exist will destroy the jobs they believe they are protecting.

The reason this legislation was passed is quite clear (you probably have figured this) — the Service Employees International Union (SEIU) has largely failed to unionize employees at fast-food restaurants and has figured out a workaround to get the employees under their control.

First, the legislation creates specific rules that allow a restaurant to be exempt from the draconian rules for one reason – the restaurant is subject to a collective bargaining agreement. Second, it creates the Fast Food Council (FFC) where nine positions are appointed by the Governor/ Legislature, and one is a career union government worker from the Department of Industrial Relations. Sure, it has two representatives from franchisors and two from franchisees, but they are being chosen by Governor Newsom. What are the chances that they will be warriors for business? Even if they are in there pitching for keeping their businesses alive, they will be outvoted 6-4 every time. I guarantee that the other six will never vote on a significant issue in favor of the business owners.

It gets worse. The legislation does not go into effect until it has 10,000 signatures on a petition by California fast-food restaurant employees. Who will be collecting those signatures? The legislation does not say, but we all know – the SEIU. The SEIU will then use those people to organize in the various restaurants.

A lot of reports have addressed the fact that (once established) they can raise the minimum wage in the subject restaurant to a maximum $22 per hour. If they only raise it to $20 per hour, they will tell us how responsible they have been. Traditionally, these positions at fast-food restaurants have largely been filled by young people with little work experience. If you have ever read about a McDonald’s franchisee operating in a largely black neighborhood, they are taking young blacks with zero work experience and making them into responsible workers. All franchisees do this. They are initially not worth the current minimum wage of $15 per hour, let alone $20 or $22 per hour.

Because of that, restaurant franchisees will turn to automation and eliminate a sizable number of these entry-level jobs. Have you been to a parking facility recently? You get a ticket from a machine and then pay electronically. All those jobs at parking facilities have evaporated. Say goodbye to walking into a McDonald’s and hearing “Good Afternoon, welcome to McDonald’s. May I take your order please?” Unless they build that into the computer screen, you will be placing your order and paying electronically.

For some reason, the legislation exempts fast-food restaurants that bake bread for sale. You will soon see Subway and like operations selling their rolls in packages of six.

To make it seem like it is not all about raising wages to a level that makes no sense, the legislation speaks significantly about the FFC creating rules regarding worker safety. Here is another point that creates cynicism. The rules only affect fast food restaurants that have 100 or more locations anywhere in the world and do not include table service restaurants. I have worked in or with restaurants for 50 years. I cannot see what safety rules are of concern to fast food employees of chains with 100 locations that do not affect sit-down restaurants or those chains with less than one hundred locations.

The legislation is loaded with ad hominem attacks on fast-food operators. It states, “For years the fast-food sector has been rife with abuse, low pay, few benefits, and minimal job security.” In another section, they state there have been numerous complaints by fast food workers. What are “numerous complaints”? That could be 20 over the years. This displays the tenor of the people who wrote this law. The last real job these people probably had was working as a teenager in a fast-food restaurant. As always, they want to tell us how to run an operation in which they have zero experience themselves.

Here is something to think about. People have been bantering about the fact that prices at fast food places covered by this law would go up 20%. That is way too low. If the wages go up as projected, the prices will go up more like 30% to 50%. It will not just be untrained, inexperienced workers getting these wages, but the supervisors will demand similar raises. If you operate a chain of ten restaurants, you will have to raise your wages commensurately or all your employees will walk across the street and take a job at Burger King. This will affect wages at casual dining establishments and dinner houses as their employees will demand wage increases or take a job at Jack-In-The-Box.

It appears the people who wrote this legislation have not been to a restaurant recently. In California with the raising of the minimum wage to $15 per hour and the Biden inflation raising the cost of all the food and supplies in a restaurant, it has already caused many people to cut back on their restaurant trips as the cost of meals has soared. Labor factors in restaurants are already out of control before this law. These new regulations will jump prices up even further cutting more visits to local restaurants and more closures. The pandemic closed thousands of restaurants already.

This is all because unions have not been able to do two things. First, they have wanted to make the franchisors mutually liable for operational decisions by franchisees and they have failed largely because it makes no sense. Second, because the fast-food industry has huge employee turnover, they cannot organize them. That is largely because of non-committed workers. Operators hate turnover. It costs them training and customer service. Hard to organize people who are not going to be on the job next month.

The fast-food industry is fighting back by attempting to get an initiative on the ballot to kill this cynical piece of legislation that will have the exact opposite effect of the supposed intent of the manipulators behind it. When that happens, make sure everyone you know signs the petition and then votes this trash legislation off the books.

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This article was published by Flash Report and is reprinted with permission from the author.

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