On Labor Day, Governor Gavin Newsom signed AB 257, which puts a 13-member board of political appointees with virtually unlimited authority to set wages, benefits and working conditions for tens of thousands of fast food restaurants in California. With the stroke of a pen, Newsom has taken a big bite out of the family budgets of millions of Californians who are already struggling with record inflation.
The state minimum wage is already $15, but the new Fast Food Council will be able to raise it to $22 an hour as soon as 2023, and an extra 3.5% every year after that.
In May, the Labor Department reported fast food prices were climbing at an annual rate of 7.4%. AB 257 will send that number climbing even higher, taking an even bigger bite out of working gamily budgets.
For now, the law applies to restaurants that are parts of chains with 100 or more restaurants – which amounts to 16,753 franchise locations in the state run by 5,820 owners. Those are small businesses, and disproportionately immigrant owned.
Like UNITE-HERE Local 11’s push to impose a $25 an hour minimum wage on Anaheim hotels and event centers, AB 257 represents an attempt by unions to cudgel fast food franchisees into unionizing: the law contains an escape clause exempting restaurants that sign collective bargaining agreements paying their workers 30% above the state minimum wage.
At least, that’s the plan. However, these scheme’s often fail to take account of a higher law: the law of unintended consequences. The more likely result of this attempt of state direction of an entire industry will be to accelerate the trend toward automation in the fast food industry – a trend that is already gaining momentum. When government arbitrarily boosts labor costs, businesses will turn to technologies such as AI and robotics as substitutes for labor, meaning fewer jobs and fewer hours.
How did members of Orange County’s state legislative delegation vote?
Every Republican voted against this exercise in economic central planning, while the Democratic members split between support for it or not voting at all.
In Support of AB 257
Senator Bob Archuleta (Democrat)
Senator Dave Min (Democrat)
Assemblywoman Sharon Quirk-Silva (Democrat)
Opposed
Senator Pat Bates (Republican)
Assemblyman Phillip Chen (Republican)
Assemblywoman Laurie Davies (Republican)
Assemblywoman Janet Nguyen (Republican)
Assemblyman Kelly Seyarto (Republican)
Assemblyman Steve Choi (Republican)
Not Voting
Senator Josh Newman (Democrat)
Senator Tom Umberg (Democrat)
Assemblyman Tom Daly (Democrat)
Assemblywoman Cottie Petrie-Norris (Democrat)
A vote for AB 257 was a vote for lost jobs, less work, higher food prices and franchise closures. This is obvious to anyone with even a feeble grasp of economics.
