A proposed California legislation that would require giant fast food restaurants to pay employees up to $22 an hour in public rebuke has been made public by the CEO of McDonald’s US operations, who said that the proposal “should ring alarm bells throughout the nation.”
In an open letter published on Wednesday, Joe Erlinger, president of McDonald’s USA, said that California’s proposal is unjustly constructed and would result in more cost increases for customers.
He was reacting to a plan that could raise the minimum wage for all workers in the state from $15.50 an hour to $22 an hour for fast food businesses with more than 100 locations the following year.
Erlinger said that the new wage requirement would apply to a McDonald’s franchisee who owns one site but not to a corporation with 20 locations, calling it “lopsided, hypocritical and ill-considered legislation that damages everyone.”
Erlinger stated that the proposal would increase consumer expenses at a time when inflation is already high, citing projections that if the measure is passed, the cost of consuming fast food in California will increase by 20%.
After passing the California state legislature on Monday, AB 257 now just need governor Gavin Newsom’s signature to become law.
‘The measure will be examined on its merits when it reaches the Governor’s desk,’ said a Newsom representative, adding that his office normally does not comment on proposed legislation.
The proposed legislation would establish a new, 10-member Fast Food Council with equal representation from companies and employees, as well as two state officials, who would have the authority to establish minimum standards for pay, hours, and working conditions in California.
The council would be allowed to set salaries as high as $22 per hour next year, with cost of living hikes after that. It would have jurisdiction over chains with more than 100 sites nationwide.
The plan has received support from labour groups and unions; Service Employees International Union President Mary Kay Henry referred to the bill’s passing as “a historic event.”
As campaigners urged other states to follow California’s lead, she said that the law was “a significant step forward for employees in California and around the nation.”
The bill’s sponsor in the Senate, Democratic state senator Maria Elena Durazo, said that it was “bringing industry and labour together at the table.”
It was a “really, very well-balanced manner of handling both the employers, the franchisees, and the employees,” she said.
Nearly every Republican senator who spoke opposed the plan, including Senator Brian Dahle, who is also the party’s contender for governor in November, during the partisan debate that followed.
“This is a first step in organising all of these employees.” At the end of the day, it will increase the price of the goods they provide, according to Dahle.
Later, he clarified: “There are absolutely no slaves employed by California companies. If you don’t like your employment, you may leave at any time and find work elsewhere.
The discussion has garnered interest around the country, including on Capitol Hill, where Democratic U.S. Rep. Ro Khanna expressed optimism that it might inspire similar initiatives elsewhere.
In response to such requests, Erlinger sent a letter on Wednesday in which he called the California idea a “poor” model for use nationwide.
California is where I was born, therefore it’s difficult to see it live up to its reputation for pushing enterprises out of the state, the man wrote. “California is not leading the way once again.”
Erlinger said that he supported legislation that would increase salaries for all employees and pointed out that McDonald’s currently thrives in areas where all businesses are compelled to pay at least the equivalent of $22 an hour.
He said that by limiting applying to chains with more than 100 sites, California’s law ‘targets specific workplaces and not others.’
This is a blatant instance of government choosing “winners” and “losers,” which is not its proper function, he said.