Updated Sep 5, 2022 - Politics & Policy

Newsom signs "groundbreaking" law for low-wage workers

Gov. Gavin Newsom speaks a Homekey site to announce the latest round of awards for homeless housing projects across the state on Wednesday, Aug. 24, 2022

Gov. Gavin Newsom speaks at a Homekey site on Aug. 24. Photo: Brian van der Brug/Los Angeles Times via Getty Images

California Gov. Gavin Newsom (D) on Monday signed a bill that could increase wages for fast food workers to up to $22 per hour in what labor advocates are touting as a "groundbreaking step" for low-wage workers.

Driving the news: Newsom signed the Fast Food Accountability and Standards Recovery Act, or A.B. 257, on Labor Day, despite facing fierce opposition from business groups, who warned that the law could increase costs.

  • "Today's action gives hardworking fast-food workers a stronger voice and seat at the table to set fair wages and critical health and safety standards across the industry," Newsom said in a statement.
  • The bill will create a 10-person council — made up of business, labor and government representatives — to designate an industry-wide minimum wage, which could go as as high as $22 per hour, with annual raises of either 3.5% or the rate of inflation.

The big picture: The bill could trigger duplicate laws nationwide, Axios' Emily Peck reports.

  • The law also may signal the re-emergence of "sectoral bargaining," a tactic in which workers from different companies in the same industry negotiate for pay together, Peck notes.
  • The bill will cover as many as 550,000 fast food workers in California.

By the numbers: The minimum wage in California is currently $15.00/hour for employers with 26 or more employees, and $14.00/hour for employers with 25 or fewer workers.

What they're saying: "It was a battle of Goliath versus David and we just had our voice to ensure A.B. 257 became a reality," Ingrid Vilorio, who works at Jack in The Box, said Monday during a news conference.

  • "We are united to build a better industry where all races, nationalities work together to make a better industry. We know it's not over, it's the beginning. We're going to keep working so that these half million workers have a voice."

The other side: "By signing A.B. 257 into law, Governor Newsom has not leveled the playing field but instead targeted one slice of California's small businesses and consumers who rely on counter service restaurants to feed their families," the campaign to stop the law said in a statement on Monday.

  • "My people are the backbone of my business and will always come first," Harris Liu, a Sacramento-based McDonald's franchisee, said in a statement.
  • "But instead of endorsing legislation that benefits all workers, Governor Newsom is creating an unequal playing field that threatens small business owners and communities across the state."

Go deeper ... California fast-food bill marks pivotal moment for low-wage workers

Editor's note: This article has been updated to include the current minimum wage amounts and to clarify that wages for fast food workers could increase to up to $22 per hour.

Axios Latino's Astrid Galván contributed to this report

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