How Increases in Worker Compensation Could Affect Limited-Service Restaurant Sales and Competitiveness
How Increases in Worker Compensation Could Affect Limited-Service Restaurant Prices
Addendum: How Increases in Worker Compensation Could Affect Limited-Service Restaurant Prices
Millions of Californians go to counter service restaurants every week, the vast majority of whom are price sensitive. As inflationary pressures have increased throughout 2022, restaurants have worked to hold price increases below other food sectors (13.1% for grocery compared to 7.6% for restaurants year over year in July). Support for AB 257 declined ten points since March with less than a third of voters (32%) in support of the policy. Voters expect policymakers to address price increases, not exacerbate them.
EPI publicly released a study analyzing nearly a decade of data from the California Department of Industrial Relations (DIR) on alleged labor law violations. The data shows conclusively that fast food restaurants have far fewer wage claims as compared to other industries, undermining advocates’ case for AB 257.
Finance is opposed to this bill because it creates significant ongoing costs at DIR. Additionally, it creates a sector-specific rule-making body within DIR, which could lead to a fragmented regulatory and legal environment for employers and raise long-term costs across industries. Finally, it is not clear that this bill will accomplish its goal, as it attempts to address delated enforcement by creating stricter standards for certain sectors, which could exacerbate existing delays.
Over the past few years, several pundits and politicians have proposed the introduction of German-style “sectoral bargaining” in the United States. In such a system, unions representing all employees in a sector bargain over the terms and conditions of employment for employees at all firms in that sector. …
U.S. antitrust law, broadly speaking, prohibits competitors from coordinating their behaviors in ways that set prices or that otherwise manipulate the competitive landscape in ways that cause anticompetitive harm to consumers. …
Decades of antitrust precedent push against the notion that firms that are otherwise competitors can jointly negotiate on wage and related restrictions, rejecting even “special case” exemptions such as those for the “learned professions.”