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From Jeanne Kuang of CalMatters’ California Divide team:
Low wages and unpredictable hours make fast food the industry with the highest percentage of homeless workers in the state, according to a new union-sponsored report that is sure to stoke debate this year amid the latest contentious legislation over the industry’s labor practices.
The report released Tuesday — conducted by the think tank Economic Roundtable in Los Angeles and using five years of Census surveys — estimates that of homeless individuals in California who work or have worked in the past year, nearly 11% were employed in fast food.
Fast food workers made up 6% of the state’s overall homeless population, according to the study. Researchers pointed to both low wages and precarious hours: On average, “frontline” fast food workers — cooks, food preppers, dishwashers, cashiers and counter service workers — were only employed about 26 hours a week. That’s compared to an average of 35 hours across all other industries, the state’s definition of full-time employment.
The report concludes better pay in the industry could have prevented more than 10,000 people from becoming homeless in California since 2014, amounting to a fifth of the state’s jump in homelessness.
Daniel Flaming, president of the Economic Roundtable and one of the report’s authors, noted the industry grew during the pandemic.
- Flaming: “The solutions are not to diminish the industry, but to make it viable and that includes processes for setting equitable, sustainable wages across the board, predictable and viable scheduling and accountability from the industry.”
One response Service Employees International Union is pushing this year is a bill to make fast food franchisor companies — the McDonald’s and Burger Kings of the world — jointly responsible for wages and working conditions of their franchisees, the smaller businesses that actually run the restaurants and employ the workers.
The state has extended this “joint liability” in other low-wage industries in its effort to combat wage theft, but doing so for fast food franchises would be unprecedented in U.S. labor law and is hotly contested by the corporations and franchisees, who say such a move would upend a model that has allowed many small or minority business owners to get their start.
Last week, the businesses got a boost from their own report arguing they’re being unfairly targeted. An analysis of California workers’ wage claims by the Employment Policies Institute, a think tank in Washington partially funded by the restaurant industry, showed fewer than 1% of worker claims of wage theft were filed against a franchised fast food restaurant.
- Michael Saltzman, EPI executive director: “The numbers are clear: Quick-service restaurants, and franchisee-owned restaurants in particular, represent a fraction of total wage claims.”
The labor bill has passed two Assembly committees, but its provisions were among the more controversial stripped out of last year’s legislation creating a state council to regulate fast food wages and working conditions — a law on hold because the industry qualified a November 2024 referendum.
In another move to boost lower- and middle-income Californians, CalMatters’ health reporter Kristen Hwang explains how the Legislature and Gov. Gavin Newsom are at odds over a controversial 2019 tax penalty they agreed to pass.
Known as the individual mandate, the tax penalizes Californians who don’t have health insurance. Though Democratic lawmakers balked at the idea of penalizing the state’s poorest residents, the Legislature ultimately approved the tax on the governor’s “verbal assurances” that the money would go towards lowering costs for Covered California enrollees.
But that’s not quite what happened. Though more than $1 billion has been collected since its enactment, only about $355 million was used, in 2020, to lower costs for patients. Newsom says a state law doesn’t require the funds to be used on health care, and plans to temporarily move $333.4 million of the penalty money to the general fund.
Calling it a “rip-off” of funds, Senate Democrats propose to instead use the money to get rid of deductibles and copays for 900,000 Covered California enrollees next year.
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