In May, McDonald’s workers in 15 cities led strikes to demand a company-wide minimum wage of $ 15. Fast food workers just do $ 11.80 per hour or $ 24,540 per year working full time, on average, making them some of the lowest paid workers in America. Fast food workers in California go even further. Last month workers rallied for the Quick Payback Act, a California bill that would create a worker and business interests council to set higher wages and working conditions across the industry. It would also make fast food brands liable for labor law violations in all of their independent franchises.
By holding parent companies accountable and improving labor standards across the industry, this bill would change the nature of competition in fast food restaurants. As it stands, strict franchise contracts push franchisees to profit by reducing workers’ wages, benefits, hours, and safety, as many other business decisions are beyond their control. Establishing comprehensive, worker-informed, industry-wide labor standards can especially benefit workers in heavily fractured industries with low unionization rates, such as fast food restaurants – provided workers don’t lose any labor law in the process (which sectoral negotiation proposal for workers in New York threatens to do).
Fast food companies exploit and abuse workers. California’s fast food workers are among the lowest paid in the state, averaging $ 13.27 per hour. According to SEIU, more than 70% of these workers are people of color. Planning may be unstable for working parents, and fast food workers experience exceptional levels of salary theft and other labor violations. Sexual harassment and racism are also rampant, according to worker surveys and Imelda Rosales, who worked at McDonald’s in the Los Angeles area for 11 years. “So many fast food workers are afraid to talk about issues in their stores because they are afraid of retaliation,” Rosales said through a translator. Indeed, a survey of fast food workers find 70 percent suffered consequences for reporting harassment. As the main source of income for her four children, Rosales sometimes had to take the shift offered by McDonald’s, take a second job, and work 6 a.m. to midnight seven days a week to support her family.
To understand California’s approach to protecting fast food workers, it’s important to remember how the fast food business model works. Massive fast food chains like McDonald’s or Domino’s pride themselves on their uniformity globally, but most of the big fast food chains don’t own the bulk of their restaurants. Some 73 percent fast food workers are employed by franchise chains, which means local independent business owners hire workers and run restaurants.
Amendments to the Antitrust Law to have permit franchisors to establish stricter contractual control over their franchisees, which calls into question the truly independent character of these companies. In a sample of franchise contracts reviewed by Open Markets Chief Economist Brian Callaci, 95% dictated which products franchisees could sell, 92% set their hours of operation, 83% gave franchisors the power to withdraw funds directly from franchisees’ bank accounts, and 56 percent set maximum and minimum prices. On average, foodservice franchises also purchase 63 percent of their supplies from sources dictated by the parent company.
Under these conditions, Callaci’s research reveals that franchisees rely on reducing labor costs to compete. “By removing non-labor variables from the set of choices to maximize franchisee profits, vertical restraints force franchisees to focus on minimizing labor costs and extracting the labor effort for their profit margins ”, Callaci written. Indeed, economic studies show that franchised fast food establishments offer lower wages and have more labor violations than establishments owned directly by the parent company.
The FAST Recovery Act would have disturb this dynamic. On the one hand, it would hold franchisors accountable for labor law violations at all of their franchisees, forcing the mother ship to think twice when drafting contracts that encourage squeezing of workers.
The bill would also create a government-sanctioned council of business and labor representatives to set industry-wide standards for wages, benefits, safety, hours and hours. other working conditions. The council would update the fast food workplace standards at least every three years and allow for temporary emergency standards, like the pandemic safety protocol. It would also hold hearings every six months to allow workers to share stories and to ban employer retaliation. In addition to getting higher pay and more stable hours, Rosales wants the bill passed to hold employers accountable for sexual harassment and racism. “We could get respect at work and protection from things like sexual harassment,” Rosales said. “We would have a place to go.”
New York State raised minimum wage for fast food workers through a similar wage setting board, and Seattle created a multi-party board that defines Labour Standards for domestic workers, including independent contractors. “Sector councils are really well suited to industries where unions have little or no density and where the structure of the industry is very fragmented and makes traditional organization difficult if not impossible,” says David Madland, senior advisor to the industry. ‘American Worker Project at the Center for American. Progress. Only 1.3 percent Of all restaurant workers are union members, and even if only one fast food restaurant could unionize, that wouldn’t stop the franchise at the bottom of the bloc from undercutting them on wages. “Sector council can help ensure competition based on productivity and improved service delivery, rather than squeezing workers,” says Madland.
It should be noted that not all industry standardization efforts are created equal. New York lawmakers recently introduced a sectoral bargaining proposal that, on paper, would allow delivery and ridesharing workers to elect unions to negotiate with tech companies, such as Uber and Instacart, for wages and benefits at the industry-wide.
However, this proposal also obliges construction workers to give up several rights, namely their right to be qualified as employees instead of independent contractors. To create a legal prune permanently classifying construction workers as subcontractors prevents these workers from directly engaging in collective bargaining. The bill would also prevent workers from being paid for time spent looking for rides (which would undermine the value of any minimum wages that unions might negotiate). The proposal also includes a no-strike clause and replaces existing state-level unemployment insurance with portable benefits that could be less generous, among many other questions raised by critics.
On the other hand, the Quick Payback Act in California does not prevent fast food workers from forming a union to negotiate benefits beyond the standards set by the sector council. Nor would the council remove existing protections and benefits for workers. The bill has already been spent by the California Assembly Judiciary, Labor and Employment and Appropriations Committees and awaits speaking votes in the Assembly and Senate.
This piece originally appeared in Power and power.