McDonald’s US President Criticizes California Fast-Food Bill

McDonald’s U.S President Joe Erlinger slammed California's new bill to set up a 10-person fast food council. In a published letter, Erlinger wrote that “this lopsided, hypocritical and ill-considered legislation hurts everyone.”

He started by saying, “As President of McDonald’s USA, it may come as a surprise to hear that I support raising minimum wages for workers. In fact, I welcome legislation that increases wages for all workers,” and that “when done thoughtfully, fairly and applied across an even playing field, this kind of legislation can be highly effective.”

However, he goes on to write that California’s bill called AB 257 “will do the exact opposite.”

On August 29, the California State Senate passed a heavily amended version of Assembly Bill 257, or the FAST Recovery Act, with a 21 to 12 vote. The bill aims to provide California fast-food workers and unions more influence over wage rates and workplace standards by including them in a committee that would have the authority to draft state labor rules for fast-food restaurants. 

Erlinger argues that the bill imposes higher costs on one type of restaurant while sparing others, “even if those two restaurants have the same revenues and the same number of employees.”

He explains that small business owners running two restaurants that are part of a national chain can be targeted by the bill, while someone who owns 20 restaurants not part of a large chain would not be.

“This is a clear example of picking ‘winners’ and ‘losers,’ which is not the appropriate role of government,” he wrote. 

He also noted that the bill could require single-location franchise owners of large chain restaurants to pay workers $22 per hour by 2023, which is 40% more than the current hourly wage in California. 

“Aggressive wage increases are not bad,” Erlinger wrote. “But if it’s essential to increase restaurant workers' wages and protect their welfare — and it is — shouldn’t all restaurant workers benefit?”

He added that some economists say the bill could drive up the cost of eating at a quick service restaurant in California by 20%. Many small business owners have already expressed concern that this could raise menu prices if it becomes law.

Erlinger is not the only one putting up a fight. State records show that other restaurant chains such as Chipotle Mexican Grill, Chick-fil-A, Yum Brands and Restaurant Brands International spent money to lobby California lawmakers to oppose the legislation, CNBC reported. 

 The bill has been primarily backed by labor organizations and fast food workers who believe it would protect them from employer abuse, including wage theft and sexual harassment. 

“Once again, California is not leading the way. We should all demand better, and I welcome a productive dialogue with elected leaders across the country,” Erlinger concluded.