California’s Unions Are Misusing Their Power

If you go to the “what we do” page of the California Labor Federation, the lead paragraph starts with this sentence: “The California Labor Federation is dedicated to promoting and defending the interests of working people and their families for the betterment of California’s communities.”

But they’re not.

What unions in California do has arguably helped their members, but the legislative agenda they support has not helped the vast majority of private sector working families. Laws passed by the California State Legislature, explicitly promoted by unions, usually cause more harm than good for the majority of California workers. Moreover, laws passed by the political coalition which these unions are part of, laws that these unions have often supported and rarely opposed, have devastated the economic opportunities for all but the wealthiest Californians.

The latest example of a bill promoted by California’s unions is AB 257, known as the “Fast Food Accountability and Standards Recovery Act.” It was signed by governor Newsom on September 5. This flawed legislation is going to form a “Fast Food Council” to regulate wages and work rules in fast food franchises. It will consist of the following members:

(1) One representative from the Dept. of Industrial Relations, a state agency, (2) two representatives of fast-food restaurant franchisors, (3) two representatives of fast-food restaurant franchisees, (4) two representatives of fast-food restaurant employees, (5) two representatives of advocates for fast-food restaurant employees, and (6) one representative from the California Governor’s Office of Business and Economic Development.

A quick look at the composition of these ten positions reveals an obvious outcome: It will be stacked 6 to 4 in favor of union advocates. The appointees from California’s state agencies, the governor’s office, and the restaurant employee representatives, will almost certainly be choices approved by the unions.

For this council to formally assume power, the California Department of Industrial Relations must first receive a petition of at least 10,000 fast-food workers approving the creation of the Council. That should not be a problem, considering there are over 550,000 fast food workers in the state. It’s also a vanishingly minute threshold, less than two percent of fast food workers have to sign the petition for it to take effect.

If unions truly cared about all the workers in California, this council would not use its considerable power to harm the industry or the state. But that’s not what early indications suggest. The council will have the power to establish a minimum wage of up to $22 per hour by 2023, with up to 3.5 percent annual increases thereafter.

There are plenty of additional powers the Fast Food Council will have to regulate any fast food restaurant located in California that is part of a national franchise chain with 100 or more restaurants nationwide, but the power to regulate wages merits a specific focus. Across every unionized sector, whenever wages have been negotiated by unions, problems follow, and AB 257 is no exception. Here are some of the difficulties that will surface if this council raises the minimum wage for fast food workers:

• Only affects workers in franchise outlets, making those outlets less competitive with non-franchise restaurants.
• Imposes a statewide hourly minimum pay even though the cost-of-living varies considerably across California.
• Stimulates investment in automation by major chains, potentially eliminating hundreds of thousands of jobs.
• Raises the price for fast food to consumers.
• Will drive many fast food franchisees out of business, harming small businesses and eliminating jobs.

There is, however, a more fundamental problem with raising minimum wages. While California’s unions have focused on increasing the wage and benefit packages for their members, particularly in the public sector which is almost 100 percent unionized, they have done nothing to address the out-of-control increases to the cost-of-living that have made it impossible for ordinary working families to survive. Even at union negotiated rates of pay, families are suffering.

For at least the last 30 years, and more so every year, unions in California have been part of a ruling coalition that exercises nearly absolute power over the state legislature. Along with unions – most of them public sector unions – this coalition includes powerful nonprofits, environmentalist hardliners, public utilities, most major corporations, and most billionaires especially in the bazillionaire rich high-tech industry.

Strange bedfellows? Yes! But on every major issue affecting the cost-of-living in California, unions have supported the political agenda of this self-serving ruling elite.

How Unions Could Help ALL Working Californians

To make housing affordable again, for example, abolish the ridiculously overwritten building code requirements, relax the zoning laws that prohibit urban expansion, quit charging criminally high fees for building permits, and deregulate the industries that supply building materials.

Investing in water supply infrastructure would guarantee Californians abundant and affordable water, which would lower the cost of housing – because housing developments cannot be built without the builders first knowing where the water is coming from – and of course it would also lower the cost of food. It would lower costs for every business that uses water, and lower the water bills that households have to pay.

Approving development of California’s rich resources of oil and gas, and upgrading and expanding California’s refinery capacity would create thousands of good union jobs, at the same time as it would bring gasoline and home heating costs back down to earth. Approving more nuclear and natural gas generating plants would make electricity affordable again.

Permitting the state’s timber industry triple in size, to again harvest and mill timber at the rate California’s 33 million acres of forests generate new growth – over 4 billion board feet per year – would create additional tens of thousands of jobs and make wood affordable again, further lowering home prices. It might also stimulate more construction using mass timber, which is one of the most exciting new innovations to hit the building industry in decades.

If unions cared about working families in California, they would identify and repeal the laws that have made it so hard for people to afford to live here. To this end, critics of unions may eschew cynicism and appeal to the good hearted intentions of union leaders and union members, and ask them to find the courage to break with the ruling consensus that has driven millions of people to flee this beautiful state, and driven millions more into poverty.

There are many answers to how we may promote and defend the interests of working people and their families for the betterment of California’s communities. Merely focusing on raising pay is one dimensional and exclusionary. Promoting ways to lower the cost of living will better everyone’s lives, and restore a progressive balance to the economic equation we all strive to optimize.