An innovative proposal that aims to increase the bargaining power of California’s 550,000-plus fast-food workers is one of the most exciting pieces of pro-worker legislation in years. Not only that, the bill—the Fast Food Accountability and Standards Recovery Act—could prove one of the most influential pro-worker measures as well, because many other states and industries might seek to copy it.
The proposal calls for creating a state-appointed council of fast-food workers, industry representatives, and government officials who would recommend minimum standards on pay, benefits, and working conditions at California’s McDonald’s, Burger Kings, Taco Bells, and other fast-food restaurants. That council’s recommendations would take force if approved by the state legislature or if the legislature fails to act on the recommendations.
The legislation, called the FAST Recovery Act for short, passed the California State Assembly by one vote in January and is expected to win Senate approval later this month, before heading to the desk of Governor Gavin Newsom. His office has not indicated whether he will sign it. The proposal has been championed by the Service Employees International Union and the Fight for $15, and also has strong support from the AFL–CIO, the two giant teachers’ unions, and many other unions.
In urging Newsom to sign the bill, Assembly Bill 257 (AB257), eleven union presidents wrote that the bill “creates an economic model to lift up low wage, predominantly immigrant, workers in the state.” The labor leaders added, “This bill is an opportunity to connect policy with your progressive values and demonstrate that California knows how to lead the nation with innovative solutions that tackle rising inequality.” Newsom and the union leaders know that if he decides to run for president in 2024, as is widely expected, Newsom would get on the wrong side of some very powerful labor unions if he vetoes AB257—which California’s business community vehemently opposes.
California’s fast-food workers earn $16.21 an hour on average, nearly $3 an hour less than the $19.15 an hour earned on average by the state’s non-fast-food service-sector workers.
Around 80 percent of California’s fast-food workers are people of color, and two-thirds are women. These workers face many abuses. In a survey done by the Fight for $15, 85 percent of the 400-plus California fast-food workers who responded said they experienced at least one form of wage law violation, whether being cheated out of overtime pay or not getting compensated for hours worked off the clock. Another recent study found that California’s fast-food workers earn $16.21 an hour on average, nearly $3 an hour less than the $19.15 an hour earned on average by the state’s non-fast-food service-sector workers. That study, by professors at Harvard and UC San Francisco, found that California fast-food workers earn $31,050 a year, almost $6,000 less than the $36,982 median for non-fast-food service-sector workers in the state. A survey conducted by the UCLA Labor Center found that 49 percent of California fast-food workers said they suffered verbal abuse; 43 percent said they experienced workplace injury or illness over the past year; 37 percent said they experienced incidents of workplace violence, whether assault or intimidation; and 13 percent said they experienced sexual harassment from managers, coworkers, or customers.
In writing about the push for AB257, Michael Hiltzik, a Los Angeles Times columnist, described conditions of one worker:
For Perla Hernandez, 42, working through the pandemic at a Burger King outside San Jose has been a harrowing experience.
Eight of her fellow workers came down with COVID-19 during her two years on the job. She says that included a supervisor whose positive test was kept from her until she had been working with him for hours; another supervisor pleaded with her not to go home because the restaurant was so short-staffed.
The company provided her with a mask and protective gloves early in the pandemic but didn’t arrange to replace them, even though the gloves were in shreds before her shift was over.
In the back of the restaurant, where Hernandez works as a cook, there’s no air conditioning. When she was injured on the job and had to stay home for eight days with stitches in both legs, there was no sick pay.
“We need the job, so we have to do whatever the managers ask,” she told me through an interpreter.
The FAST Recovery Act aims to improve conditions for fast-food workers, and it seeks to do so in a way that fixes a problem that has long irked America’s labor leaders. The nation’s unions have experienced a withering decline in membership in the private sector—they’ve gone from representing 35 percent of private-sector workers at organized labor’s peak, in the 1950s, to just 6 percent of private-sector workers today. That decline in union density has led to a concomitant decline in bargaining power that unions have been eager to reverse.
In recent years, labor leaders and their allies have focused on one idea in particular to reverse unions’ unhappy loss of bargaining power—that idea is sectoral bargaining. With sectoral bargaining, unions might bargain, for instance, on behalf of 80 or 90 percent of the workers in an industry, as is the case in many European countries, and that comes with a possible threat to strike by 80 or 90 percent of an industry’s workers. When 90 percent of an industry’s workers bargain, they have far more clout than when just 9 percent of an industry’s workers bargain. Less than 2 percent of fast-food workers in the United States are unionized.
Back in 2014, I wrote a story for the New York Times, with my colleague Liz Alderman, that compared the compensation of fast-food workers in the United States with their counterparts in Denmark. We found that fast-food workers in Denmark averaged the equivalent $20 an hour, while their U.S. counterparts were making a median of just $8.90 an hour. We also found that the main reason for the difference was the power of sectoral bargaining in Denmark.
In that story, we noted, “Under the industry’s collective agreement, there are five weeks’ paid vacation, paid maternity and paternity leave and a pension plan. Workers must be paid overtime for working after 6 p.m. and on Sundays.” Furthermore, “unlike most American fast-food workers, the Danes often get their work schedules four weeks in advance,” while many U.S. fast-food workers often get their schedules just two, three, or four days in advance, making it hard for them to schedule child care, doctors’ appointments or parent-teacher meetings. And many American fast-food workers don’t receive paid vacation or paid parental leave or a pension.
Little wonder that fast-food workers or other workers in the United States would like sectoral (or industry-wide) bargaining. But in a nation where just 6 percent of private-sector workers are represented by unions, there’s no silver bullet to jump from the status quo to European-style sectoral bargaining. It would be like suddenly transforming a firefly into a powerful dragon. California’s AB257 is a clever short cut—while it wouldn’t create standard sectoral bargaining, it would create a type of sectoral bargaining. On the thirteen-member state-appointed council would be four worker representatives (perhaps fast-food employees or union officials) and four business representatives (perhaps fast-food franchisees or officials from McDonald’s or other companies). The council would also include five representatives from state labor and health agencies. The council’s thirteen members would discuss, debate and haggle over pay, benefits, and working conditions for the state’s fast-food workers—it sounds a lot like sectoral bargaining. But the council’s members would not need to reach full agreement and a contract. Instead, a majority of the council would recommend minimum standards for the legislature to approve—perhaps on how much advance notice workers would have to be given of their work schedules. (These standards would apply only to fast-food chains that have at least thirty restaurants nationwide that share a common brand.)
Business is strongly opposed to AB257. Corporate lobbyists are crying that the sky will fall, as so often happens when unions or progressives push a worker-friendly proposal, whether it’s a $15 minimum wage or paid family leave. “This bill will make it next to impossible for quick-service operators who operate on razor-thin margins,” said Greg Flynn, who owns several fast-food restaurants in California. Sean Redmond, the vice president of labor policy at the U.S. Chamber of Commerce, said that AB 257 was “a radical proposal to micromanage the fast food industry” and that consumers would face higher prices because of the law. Jeff Hanscom, vice president of state and local government affairs for the International Franchise Association, condemned the bill as “one of the most damaging pieces of legislation to ever impact the franchise business model.”
Corporate lobbyists are crying that the sky will fall, as so often happens when unions or progressives push a worker-friendly proposal, whether it’s a $15 minimum wage or paid family leave.
A big reason that franchising companies like McDonalds oppose AB257 so vigorously is that it would make them joint employers with their individual franchisees. That means that if a franchisee cheated its workers out of $50,000 in wages or was fined $100,000 for safety violations, the McDonalds Corporation would be jointly liable.
As much as the business community complains about AB257, corporate America in ways has only itself to blame for such legislation. Because of shoddy, often uncaring business practices, fast-food workers often face abuse or disrespect on the job, whether wage theft, sexual harassment, inadequate protections from COVID-19, or being giving far too little advance notice of next week’s schedule. Moreover, American workers have less power and less voice on the job than workers in any other major advanced industrial nation, making it too easy for employers to underpay and push around their employees and too hard for many workers to obtain respect and fair treatment.
One gauge of how much power a nation’s workers have is what percentage of workers are covered by union contracts; being able to negotiate a union contract enables workers to join together to exercise their collective power. The United States has the lowest “bargaining coverage” percentage among major industrial countries, and as we are seeing now with Amazon and Starbucks, American corporations are dead set on keeping the number of workers who unionize and bargain collectively to a minimum. In the United States, just 12 percent of workers (public-sector and private-sector) are covered by union contracts, while in Italy, 100 percent are. In France, it’s 98 percent, Germany 54 percent, Canada 31 percent, and the United Kingdom 27 percent. (In Denmark, it’s 82 percent.)
With American workers, overall, having so little bargaining power and California’s fast-food workers facing so many abuses, the FAST Recovery Act seeks to improve the lot of the Golden State’s fast-food workers in a straightforward way: by giving them more voice and more power over their lives at work. AB257 might go far to quickly raise pay and standards for the state’s fast-food workers, and we shouldn’t be surprised if other states rush to enact similar legislation—and perhaps not just for the fast-food industry, but for other industries, as well, perhaps nursing homes or car washes.
In its lobbying materials, the National Restaurant Association issued an urgent warning about AB257, “If passed, also expect to see similar legislation in states like New York, Oregon, Washington, Illinois, and more.” That’s certainly something that workers across the U.S. might cheer about.