SACRAMENTO – Today, the U.S. Chamber of Commerce joined a coalition of California small business owners, restaurant owners, franchisees, employees, consumers, and community-based organizations in an effort to give voters the opportunity to protect Californians and local business owners from the damaging impacts of AB 257, or the FAST Act.
The bill was signed into law by Gov. Gavin Newsom earlier this month. It creates a council of unelected political appointees to set industry-specific wages and regulations in the counter-service restaurant industry. The rules promulgated by the council have the ability to override the California legislature and other state agencies charged with upholding public health and labor laws.
The Save Local Restaurants coalition, which is led by the International Franchise Association, the National Restaurant Association, and the U.S. Chamber of Commerce, released the following statement:
“Amid record inflation and a rising unemployment rate, the U.S. Chamber of Commerce is joining the Save Local Restaurants coalition to protect workers, small business owners, and consumers from skyrocketing costs and further layoffs. Californians are already suffering under the weight of rising prices, and AB 257 will make it harder to live, work, and own a business in the state.
“AB 257 not only harms California’s quick service restaurants and local franchisees, but also the very workers it claims to protect. Proponents of this legislation have indicated that similar efforts are headed for other states and industries, and now is the time to stop this bill before the harm spreads.
“Neighborhood restaurants provide first jobs and lifetime careers; dining choice and value for hard working Californians; and economic opportunities for underrepresented entrepreneurs across the state. The businesses singled out in this law already have strict rules in place to protect workers and consumers, but now those can be overridden by a small, unelected committee. This will stifle job growth and push up prices. California consumers will be forced to pay an estimated 20 percent increase in food prices at counter-service establishments, which will have the greatest impact on lower-income and communities of color.
“Before these repercussions hit the state, it is only right that California voters have a say in whether they must shoulder the burden of higher prices and job losses, as small businesses are forced to limit opportunities, lay off employees or close altogether. Given less than one-third of Californians support AB 257, it is critical they have the opportunity to have their voices heard and hold their elected leaders accountable.”
Neil Bradley, Executive Vice President and Chief Policy Officer of the U.S. Chamber of Commerce, said:
“If AB 257 stands, you can be sure that this will be the first of many efforts to impose on businesses of all kinds European-style sectoral bargaining complete with government-created boards dictating how small businesses operate and how employees work. The outcome in each case will be the same as in the restaurant industry: fewer jobs, fewer choices for consumers, and higher prices for families. The Chamber is proud to stand with the International Franchise Association and the National Restaurant Association in co-chairing the Save Local Restaurants coalition and leading the effort to provide voters a chance to weigh in on this harmful legislation that is bad for California and bad for America.”
Matt Haller, President and CEO of the International Franchise Association, said: “Franchising provides unparalleled opportunities to aspiring entrepreneurs, workers, and the communities they serve. The FAST Act stands to take that away while increasing prices for Californians at the worst possible time. It is only right that California voters have a say if they want to face job losses and even higher prices than they already experience before this bill crushes opportunity.”
Michelle Korsmo, President and CEO of the National Restaurant Association, said:
“Restaurants are the heart and soul of the communities they serve. They are also the economic engine that supports local farmers, families, and businesses around them. When a restaurant closes, it affects the whole community. It’s important to think about cause and effect of legislation like the FAST Act. The unchecked governing council created by the FAST Act will raise prices for consumers, make it harder to afford to bring on the important people who bring hospitality to guests, and the actions of this council could push these small business owners to close their doors for good. People shouldn’t view this as being just about quick service restaurants. The damages will extend far beyond quick service restaurants to all service businesses operating in the state and those industries that do business with restaurants. We have partnered with the International Franchise Association and the U.S. Chamber of Commerce to co-chair the Save Local Restaurants coalition because the stakes are too high for us not to push back against this law.”