Walters: Two years on, Californians still don’t know impact of $20 fast-food wage

As the California Legislature churns toward the end of its session processing the remnants of thousands of bills introduced during the year several measures encompass the Capitol s preponderance enduring conflict Labor unions vs employers over working conditions Unions seek higher wages and benefits citing the welfare and financial requirements of workers and their families Employers counter that the cost of providing what unions want adversely affects their competitiveness in other states and nations and forces them to raise prices reduce employment or even leave California to remain solvent Related Articles California bill that would mostly prohibit local federal officers from concealing faces heads to governor s desk Opinion Newsom must protect California s drinking water from microplastics Bill to cut fares for Uber and Lyft heads to Gov Newsom s desk Newsom lawmakers reach a deal to inject billion into high speed rail With marathon meetings and secret negotiations California Legislature barrels toward end of session In the main unions fare better than employers in California s political arena not surprising given that union-friendly Democrats from the governor down dominate the Capitol One of the bulk intense union-employer battles arose in over act that would have raised the minimum wage for fast food workers to an hour It also declared that fast food franchises are merely subsidiaries of their parent chains rather than independently owned businesses Fast food companies and franchisees saw it as a double whammy that not only would increase their costs but it would undermine the franchise system itself The industry also disliked the bill s creation of an appointed council with the power to regulate fast food working conditions especially wages The measure passed both legislative houses with party-line votes and Gov Gavin Newsom signed it The industry responded with a campaign to put the issue on the ballot pledging that affected corporations would spend any amount of money to overturn the law due to its effects on the franchise system Which faction would win such a battle will never be known however because a year after the bill was signed and after lengthy negotiations a compromise was worked out and speedily enacted It raised the minimum wage to an initial an hour and left the oversight council intact albeit with chosen changes More importantly to the industry it did not interfere with the franchise system The new wage went into effect in April and since then the industry and the unions have sparred over its impact not only on wages but on overall employment and fast food prices The factions are marking the second anniversary of the compromise by issuing reports that could not be more different Labor acted first with the September release of an analysis by UC-Berkeley s Center on Wage and Employment Dynamics It s a research organization whose reports uniformly backing the union side of issues Researchers Michael Reich and Denis Sosinskiy declared that the wage did not reduce fast food employment didn t change the number of hours worked and only led to minimal menu price increases about cents on a burger They reported their examination included price records from more than restaurants in California and other states Five days later the Virginia-based Employment Policies Institute which was created by Berman and Company a lobbyist for restaurant hotel beverage tobacco and fossil fuel interests issued its examination based on figures from the federal Bureau of Labor Statistics It concluded that California s fast food industry has lost jobs since Newsom signed the law in September including since the law went into effect last year more than double the rate of loss seen in fast food outlets nationally It did not delve into fast food prices The two competing studies from less-than-objective sources leave us still wondering what the true impact might have been It s a knowledge gap that should be filled by someone or something with impeccable credentials because other business sectors might be the next targets In fact there s already a battle in Los Angeles over the wage for workers at hotels and other hospitality businesses imposed by the city council Dan Walters is a CalMatters columnist