McDonald’s president who made $7.4 million last year says proposal to pay fast-food workers $22 an hour is ‘costly and job-destroying’

McDonald’s exec slams the FAST Act in open letter.John Greim/LightRocket through Getty Pictures

  • The FAST Restoration Act may increase minimal wage for California quick meals staff to $22 an hour.

  • A coalition led by chains like McDonald’s have secured a referendum vote in November 2024.

  • This week, a prime McDonald’s exec slammed lawmakers for passing the legislation in an open letter.

The president of McDonald’s USA threw shade at California lawmakers for passing a fast-food legislation that he stated would make it “all however unattainable to run small enterprise eating places” within the state, Joe Erlinger stated in a January 25 open letter.

AB 257, dubbed the FAST Act, signed into legislation final yr, may increase hourly restaurant wages to $22 an hour within the state. The open letter was printed after the state authorised a referendum backed by fast-food chains that may put the legislation up for a vote in November 2024. The legislation was beforehand set to be enforced on January 1. However till the vote, state officers cannot implement the legislation.

A majority of McDonald’s practically 14,000 eating places within the US are run by franchisees, with a whole bunch of shops working in California. The open letter was titled, “California retains searching for methods to lift costs, drive away extra companies and destroy development by way of dangerous coverage and dangerous politics.”

Within the letter, Erlanger famous that the corporate wasn’t in opposition to rising the minimal wage. “Let me be clear: we assist laws that results in significant enhancements in our communities, together with accountable will increase to the minimal wage. Our enterprise does nicely when our workers and our communities do nicely,” he stated.

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“Whether or not you are a lawmaker, a enterprise proprietor or chief, or an on a regular basis voter, one factor is obvious: California has develop into a dramatic case research of placing dangerous politics over good coverage,” Erlinger stated. In response to monetary disclosures, Erlinger made about $7.4 million in wage, inventory choices, and different compensation from McDonald’s in 2021, the newest yr full compensation historical past is on the market.

A coalition of restaurant trade organizations led by McDonald’s, Chipotle, and In-N-Out supported the referendum. 

Restaurant analyst John Gordon, a guide for a lot of McDonald’s franchisees, stated he isn’t shocked by Erlinger’s remarks, which appear to be setting the stage for a battle main as much as the November 2024 vote, he stated.  2024 is a presidential election yr, and turnout is predicted to be excessive.

McDonald’s taking a public stance on anti-business laws, he stated.

Supporters of the union-backed FAST Act, signed by Governor Gavin Newsom on Labor Day, say the legislation would enhance working situations for 1000’s of fast-food staff within the state.

AB 257 creates a 10-member council of quick meals staff, franchisees, franchisors, advocates for quick meals workers, and representatives from the governor’s workplace. The council will set up minimal requirements on wages, working hours, and different working situations associated to the well being and security of staff. The legislation applies to meals chains with greater than 100 places, together with Starbucks, Wendy’s, Burger King, and McDonald’s.

The trade’s commerce group, Nationwide Restaurant Affiliation, stated the legislation would harm small enterprise house owners, together with quick meals franchisees who personal one or two eating places. The group stated increased wage mandates may increase prices for California fast-food eating places by $3 billion.

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One other important sticking level for the restaurant trade – state officers, together with Newsom, would appoint members of the 10-person council.

“The state is instructing us a strong lesson about what our future may seem like if this one-sided type of democracy is mimicked elsewhere or goes unchecked within the Golden State,” stated Erlinger, a local of California. “There are huge, essential points that want the eye of lawmakers. Implementing pricey and job-destroying laws like AB257 is just not the reply.”

Mary Kay Henry, president of the Service Staff Worldwide Union, stated chains like McDonald’s, Chipotle, and Starbucks, who backed the referendum, “assume they’ll purchase their manner out of something.”

Quick-food staff throughout California stated they plan to strike Thursday and Friday to protest chain assist of the referendum to overturn the FAST Act.

“California voters are about to show them an costly lesson: no company is extra highly effective than half one million staff becoming a member of collectively to demand a seat on the desk,” Henry stated in response to the referendum. “As California fast-food staff defend this landmark legislation and assert their voice, SEIU is totally dedicated to standing with them of their battle.”

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