Shots were fired this week in the ongoing battle for hearts and minds between labor organizers and the quick-service industry in California.
A report by the non-profit urban research group Economic Roundtable attempted to implicate the fast-food industry as the state’s largest “poverty employer,” saying more than 10,000 homeless individuals across California are fast-food workers.
The report estimates that fast-food workers make up about 6% of the homeless population overall in the Golden State, and that’s based on a count of 171,521 people across California without stable housing, as reported to Congress at the end of 2022.
Fast-food workers, the report contends, are at higher risk of becoming homeless because of the industry’s low pay compounded by part-time hours and high employee churn in the industry.
One-fifth of frontline fast-food workers (cooks, cashiers, dishwashers, counter servers) receive food stamps, for example, and four out of five were fired or quit in the last two years—though most quit. The reason: low wages.
The Economic Roundtable report, however, was underwritten by the Service Employees International Union, or SEIU, which has been in a bare-knuckle lobbying battle with the California restaurant industry in recent years over the Fast Act.
The labor-supported bill passed last year would have created a Fast Food Council with the authority to set industry wages and job standards. But the restaurant industry successfully pushed back, and now the Fast Act is on hold until voters can decide via referendum in November 2024 whether to enforce the legislation.
Meanwhile, the SEIU continues to draw attention to what it sees as the problem of working poverty—one that could be fixed if restaurant industry, in particular, would raise the wage floor.
“Poverty among frontline workers is the result of a system designed to ensure maximum profit for fast food corporations. Structural change is needed to correct structural problems,” the report said. “Solutions include allowing workers to organize and have a voice in setting industry standards, bringing together corporate executives, workers and government regulators to establish industry-wide standards, and requiring corporate brands to support local franchise operators in providing wages, benefits and scheduling that enable frontline workers to afford housing, food and health care.”
The International Franchise Association, which played a big role in getting the Fast Act tabled, dismissed the Economic Roundtable report, saying it was not a scientific study, “but an advocacy piece with zero credibility because the numbers were manipulated” to support the “predictable conclusion” that fast-food workers should be unionized.
“It’s shameful that SEIU would try to exploit the very serious issue of homelessness to pump out a bogus report to advocate for its union growth agenda,” said Jeff Hanscom, the IFA’s vice president of state and local government relations, in an email.
Restaurant industry representatives also poked holes in the data presented within the report, which attempts to document how easily frontline fast-food workers can fall into homelessness, even in states like California, where there is no tip credit and the minimum wage is among the highest.
The report, for example, estimates that frontline fast-food workers get an average of only 1,340 hours of paid work per year, which is about 26 hours per week, if they work year-round. By contrast, other industries, which more typically offer full-time work, employ people at an average of about 1,839 hours per year.
That estimate, however, is based on Census data collected between 2016 and 2020, before the pandemic, and that labor picture has likely changed.
The report also put the median annual earnings for frontline fast-food workers at $14,949 in 2020, saying two-thirds earn less than $20,000. That, again, includes data from a pandemic year of industry shutdowns, when there was an 11% dip in employment, according to Daniel Flaming, one of the report’s authors.
The minimum wage in California was also much lower—$13 per hour in 2020 versus $15.50 now, and even higher in certain cities, like Los Angeles, where the minimum wage will increase to $16.78 in July. And many employers say they are forced to pay rates that are higher than the minimum wage to compete for workers.
Flaming notes that the cost of living has increased more rapidly than wages.
It would be helpful, he said, if the fast-food industry stepped up and provided more recent data in a way that’s transparent and verifiable. “They are stakeholders in moving toward sustainable working conditions in the industry,” he said in an email.
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