October 2022 | Volume 14, Issue 2

Read the full article on ABC News

According to the article, California Governor Gavin Newsom recently signed a nation-leading measure giving more than a half-million fast food workers more power and protections, despite the objections of restaurant owners who warned it would drive up consumers’ costs.

The landmark law creates a 10-member Fast Food Council with equal numbers of workers’ delegates and employers’ representatives, along with two state officials, empowered to set minimum standards for wages, hours and working conditions in California.

Newsom said he was proud to sign the measure into law on Labor Day.

“California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state’s prosperity,” he said in a statement. “Today’s action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry."

The law caps minimum wage increases for fast food workers at chains with more than 100 restaurants at $22 an hour next year, compared to the statewide minimum of $15.50 an hour, with cost-of-living increases thereafter.

The state legislature approved the measure on August 29. Debate split along party lines, with Republicans opposed.

Senator Brian Dahle, the Republican nominee for governor in November, had called it “a stepping stone to unionize all these workers."

Supporters had said they hoped the measure would inspire similar efforts elsewhere.

The measure's author, Assemblyman Chris Holden, D-Pasadena, said it would “a new way to ensure marginalized workers have a voice in the workplace.”

Restaurant owners and franchisers opposed the law, citing an analysis they commissioned by the UC Riverside Center for Economic Forecast and Development saying that the legislation would increase consumers’ costs.

The International Franchise Association called it a “fork in the eye” of people who run restaurant franchises and said it could raise consumer prices as much as 20 percent.

“This bill has been built on a lie, and now small business owners, their employees, and their customers will have to pay the price," IFA President and CEO Matthew Haller said in a statement. “Franchises already pay higher wages and offer more opportunity for advancement than their independent counterparts, and this bill unfairly targets one of the greatest models for achieving the American Dream and the millions of people it supports."

However, Holden urged opponents to give the law a chance.

“Speaking as a former franchise owner, I would have welcomed this inclusive process, that in reality benefits not only the worker but franchisee as well," he said in a statement.

 

Discussion Questions

1. Comment on the details of this law (the creation of a 10-member Fast Food Council with equal numbers of workers’ delegates and employers’ representatives, along with two state officials, empowered to set minimum standards for wages, hours and working conditions in California; a cap on minimum wage increases for fast food workers at chains with more than 100 restaurants at $22 an hour next year, compared to the statewide minimum of $15.50 an hour, with cost-of-living increases thereafter. ) In your reasoned opinion, is this sound law? Explain your response.

This is an opinion question, so student responses may vary. A quick mathematical calculation involving these numbers indicate that at a maximum hourly wage of $22 per hour, with an assumed 40 hours worked per week and two weeks of unpaid vacation, the total annual salary for a fast-food worker in California would be a maximum of $44,000 per year. Obviously, the purchasing power of this amount varies considerable from state to state—What $44,000 per year would purchase in California would be substantially less than what that amount would purchase in Mississippi.

In your author’s opinion, the structure of the Fast Food Council is sound, since it involves both employees, employers, and state representatives.

Class discussion regarding cost-of-living adjustments (COLAs) should be interesting, particularly since inflation has “reared its ugly head” in recent years. Students should know that most employees do not have such increases automatically “built in” to annual pay raise considerations by their employers.

2. The federal minimum wage is $7.25 per hour. Does not federal law “reign supreme” in this case? Why or why not?

Federal law does not “reign supreme” in this case, since the federal government has deferred to the states regarding whether to increase the state minimum wage to an amount higher than $7.25 per hour. Although the federal government does enforce the $7.25 per hour minimum wage as the lowest pay threshold for hourly (wage) workers, states currently decide whether to enact a higher minimum wage in their jurisdiction. For better or for worse, this has resulted in a “patchwork quilt” of varying state minimum wage laws in the United States.

3. According to the article, “(t)he International Franchise Association called (the subject law) a ‘fork in the eye’ of people who run restaurant franchises and said it could raise consumer prices as much as 20 percent.” Please respond to these comments.

This is an opinion question, so student responses may vary. Obviously, an increase in prices for fast food could be painful for consumers, particularly considering the highest inflation rate in approximately 40 years. However, it could be argued that historically, consumers have paid artificially low prices for fast food, borne on the “backs” of fast-food workers.