The California legislature passed a bill this week that would allow a state council to set wages and worker conditions across the entire fast food industry. If signed into law, it would be a rare example of “sectoral bargaining” in the U.S., where parties bargain at an industrywide level versus with one business or location.
The FAST Act, as it’s called, has fierce opposition from fast food chains and franchise owners who are urging Gov. Gavin Newsom, D, to veto it before Sept. 30. The governor’s office has not indicated whether he intends to sign it into law.
California already has a $15 per hour minimum wage, which is set to go up 50 cents next year. This bill, however, could allow a council to set the hourly minimum wage for fast food workers up to $22 per hour next year, along with annual increases based on inflation.
The Service Employees International Union said the bill will give more than half a million fast food workers in the state “a voice to speak out against unsafe working conditions, poverty wages and wage theft.” The state council would be made up of 10 people and would include workers and employer representatives, along with state officials, appointed by the governor and legislative leaders.
Franchise industry representatives claim the bill will only raise costs on everyone at a time when inflation is sky high. A University of California Riverside study commissioned by the International Franchise Association shows employers would pass on about a third of the labor costs to consumers, raising food prices by 7% to 22%.
“The bill creates an arbitrary standard for one sector of workers while punishing small business owners and their customers,” IFA CEO Matthew Holler said.