At $15.00/hour California already has the highest minimum wage among the states (though D.C.’s is higher at $16.10). Now the state’s politicians want to create an entirely new process for setting wages for fast food workers. The state would grant power over fast food wages to an unelected group of appointees chosen by the state’s politicians. Heather Haddon and Christine Mai-Duc report for The Wall Street Journal:
California’s Legislature passed a bill Monday to create a government panel that would set wages for an estimated half-million fast food workers in the state, a first-in-the-U.S. approach to workplace regulation that labor union backers hope will spread nationally.
The bill, known as the Fast Act, would establish a panel with members appointed by the governor and legislative leaders composed of workers, union representatives, employers and business advocates. They would set hourly wages of up to $22 for fast food workers starting next year and can increase them annually by the same rate as the consumer-price index, up to a maximum of 3.5%.
A previous version of the bill passed by the state Assembly in January also allowed the council to oversee workplace conditions such as scheduling and made restaurant chains joint employers of their franchise’s employers, potentially opening them to liability for labor violations.
Representatives for companies including McDonald’s Corp., Yum Brands Inc. and Chipotle Mexican Grill Inc. succeeded in having those provisions removed in the state Senate via amendments over the past week, though they still oppose the bill.
“This is the biggest lobbying fight that the franchise sector has ever been in,” said Matthew Haller, president of the International Franchise Association, a trade group whose members own many fast food restaurants.
A University of California, Riverside School of Business study commissioned by the franchisee association found that setting minimum wages between $22 and $43 would generate a 60% increase in labor costs and raise fast-food prices by about 20%.
California’s current minimum wage is $15 and is set to increase by 50 cents on Jan. 1.
The final version of the Fast Act passed both houses of the Democratic-controlled state Legislature on Monday. In both the Assembly and the Senate, all of the “yes” votes came from Democrats and every Republican who voted opposed the bill.
Democratic Gov. Gavin Newsom now has until Sept. 30 to decide whether to sign or veto the bill.
Mr. Newsom hasn’t taken a public stance on the current version of the bill, but his Department of Finance opposed the original version.
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