Chantel Brink
Chantel Brink
February 28, 2023 ·  4 min read

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

It’s in the pipeline – California voters are set to decide in the following year on a referendum that could change the fast food industry. The new state law could see the minimum wage increased to $22 per hour for fast-food employees. This is happening in the nation’s largest state. A lot is hanging on this decision right now, and raises are welcome by all.

Some of the community’s favorite brands, including Chipotle, Starbucks, Chick-fil-A, McDonald’s, In-N-Out Burger, and KFC, have donated $ 1 million each to ‘save local restaurants’ in a coalition to oppose the potential new law. Many others have criticized the legislation, spending millions on opposing it.

Known as the FAST act, the measure was signed last year by Californian Governor Gavin Newsom

Set to take effect on January 1, California’s secretary of state made an announcement that there was a petition in place to stop the law’s proceedings. This means that they (fast food outlet owners) have gathered enough signatures to qualify for a vote on the state’s 2024 general election ballot.

The first of its kind, the law could see the formation of a 10-member Fast Food council. This council would comprise of labor, employer, and government representatives.

These appointed few will properly oversee the standards for workers in the state’s fast food industry. They will have the authority to set sector-wide standards for wages, raises, health, and safety. Additionally, time-off policies and disciplinary remedies will be closely and strictly regulated, ensuring fairness for all. The new law will in due time affect more than 100 locations within the state of California.

Read: Wendy’s is the most expensive fast food restaurant in 2022

The current minimum wage is $15.50 per hour, but that could soon change with raises all round

If the council gets its way, the minimum wage could soar from $15.50 per hour to $22 per hour. This would, in turn, affect annual raises, which are based on inflation. There are over 550,000 workers in the fast-food industry alone in California. Of those, almost 80% are of color, and on top of that, a further whopping 65% are women. These figures were provided by the Service Employees International Union, which strongly backs the law.

Both union and labor groups strongly advocate for the law to be passed. The law will improve the pay and working conditions for fast-food workers and simultaneously cover labor disputes. It’s a win for everyone except those whose own pockets are their only focus. The argument is strong – this could set a precedent for the rest of the country.

McDonald's lit up at night
Image Credit: Mikechie Esparagoza / Pexels

Less than 4% of restaurant workers are currently unionized and those numbers are shocking.

The existing labor laws in the United States are instated to structure around unions that bargain on behalf of employees at individual stores or plants. With California’s proposed law, the state would be brought closer to sectoral bargaining. This would see labor forces and employees negotiating wages in the future according to set industry standards.

What does the Fast-Food employer have to say about offering raises?

Opposers are many, and they claim that this change would be too radical for the industry to follow, causing more harm than good. They claim that the movement is targeting the fast-food industry. Their argument has a valid point, though. The bill inevitably sees staff reductions as businesses will be forced into layoffs in order to afford operational costs.

To be fair, an analysis by economists does prove a knock-on effect here where not only will wages increase by 20% for staff, but restaurant prices could go up by 7%. If restaurant workers’ wages increased by 60%, those same restaurant prices would leap to 22% more than current. Those are big numbers.

This law creates a food tax on consumers, kills jobs, and pushes restaurants out of local communities,” said the Save Local Restaurants coalition. McDonald’s US President Joe Erlinger absolutely blasted the law. He claims that already struggling unions would see “an unelected council of political insiders, not local business owners and their teams,” being the ones to make key decisions.

Opponents are turning to strategies other industries used

Uber, Lyft, and Bolt sought to overturn a 2020 Californian law requiring them to reclassify their drivers as actual employees. They were classed as “independent contractors,” leaving them without benefits such as paid sick leave, overtime, and minimum wage standards. If these aren’t determined, you can be sure that raises are definitely not in the pipeline either.

They spent over $200 million to oppose the law being instated, and they were successful when voters passed Proposition 22. A ballot that measurably exempted companies from having to reclassify their workers as full-time employees. It’s truly shocking when it comes to corporate companies spending money to bully their way out of spending money.

Keep Reading: Store owner who shares her profit with employees gives ‘lesson in labor exploitation,’ and how owners take huge profits

H/t CNN Business