Labor is testing whether California's new fast-food wage-setting process would work elsewhere

Working Lunch: Minneapolis is essentially testing the portability of the controversial Golden State model.

A test of whether California’s new process for setting fast-food wages would work in other jurisdictions is already underway in Minneapolis, where home healthcare workers just had their minimum wage raised in one flash to $23.49 an hour.

Although restaurants there are not affected directly, the increase is essentially a trial of how portable California’s controversial wage-setting model might be, according to this week’s episode of the Working Lunch government-affairs podcast.

Co-hosts Joe Kefauver and Franklin Coley note that the steep pay hike was set by a wage-setting body similar to California’s Fast Food Council, a non-elected panel that has the power to set the minimum wage for units of large quick-service chains operating there. Even before the Council met for the first time, it was decided that the pay floor for most fast-food workers in the state would jump 25% on April 1, to $20 an hour. The council is expected to raise the minimum by another 3.5% on Jan 1.

While restaurants are outside the scope of Minneapolis’ wage-setting board, labor unions are likely to read the situation there as validation of their new strategy for organizing a highly splintered business, according to Kefauver and Coley.

“Guest what industry could be next?” said Kefauver.

“It’s not the only place,” said Coley, citing such other test locations as Detroit. “The labor community is test-driving this all over the country.”

The new approach is known as sectoral bargaining. Instead of organizing an industry employer-by-employer, union powerhouses like Service Employees International Union (SEIU) is attempting to unionize employees from all companies competing in an economic sector, be it California’s fast-food business or Minneapolis’ pool of home healthcare workers. Wages are then negotiated for the whole segment by labor proponents and representatives of all employers in that field. Essentially, collective bargaining is shifted to a body with wage-setting authority, like California’s Fast Food Council.

In addition, SEIU has formed a cross-brand union in California called the California Fast Food Workers Union, as well as one in and around Georgia, called the Union of Southern Service Workers.

For a deeper understanding of what the situation in Minneapolis could mean for restaurants, listen to this week’s broadcast of Working Lunch.

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