California Gov. Gavin Newsom is pushing again towards claims that he sought to incorporate a particular exemption in a brand new minimal wage legislation to assist a longtime good friend and donor—however the governor’s objections solely underline how the whole legislation was a giveaway to his political allies.
Beginning subsequent month, fast-food chains working in California should pay staff a minimum of $20 per hour, despite the fact that the minimal wage for different jobs within the state will stay at $16 per hour. Newsom signed the invoice to create that increased wage mandate, however the legislation features a particular carve-out seemingly tailor-made to exempt Panera Bread (and different chains that promote bread as a standalone menu merchandise). Newsom had pushed for that exemption, Bloomberg reported earlier this week, as a favor to Greg Flynn, proprietor and CEO of the Flynn Restaurant Group, which operates 24 Panera places within the Golden State.
After the story took off within the media, a spokesman for the governor’s workplace claimed the allegation of favoritism was false. Newsom “by no means met with Flynn about this invoice and this story is absurd,” wrote Alex Stack in an announcement to Motive and different media shops that coated the story. “Our authorized staff has reviewed and it seems Panera will not be exempt from the legislation.”
The primary declare is perhaps true in solely the narrowest sense. The Related Press has confirmed that Flynn met with the governor’s workers concerning the minimal wage invoice and that he instructed exempting “eating places like bakeries, bagel outlets and delis” from the upper minimal wage legislation. Flynn denied chatting with Newsom straight, nevertheless it actually seems that he tried to train some affect over the lawmaking course of.
In the meantime, the governor’s workplace’s declare that the exemption does not apply to Panera solely raises different questions—like, why is that exemption there in any respect?
That is a query that reporters in Sacramento have seemingly been making an attempt to reply for months. Requested straight concerning the bakery exemption at a press conference last year, Newsom mentioned it was “a part of the sausage making” of the legislative course of. Within the wake of the Bloomberg story, Newsom’s workplace has not provided a greater rationalization for the carve-out. Till that adjustments, the questions will persist.
“If [Newsom] is unable to supply a greater justification for this carve-out, it raises severe questions concerning the integrity of his administration,” a bunch of Republican lawmakers wrote in a letter requesting that state Lawyer Common Rob Bonta examine the matter.
Newsom’s explanations concerning the carve-out appear to be “falling aside in actual time, notably as a result of Californians are accustomed to watching this administration hand out favors to its pals,” Will Swaim, president of the California Coverage Heart, tells Motive.
Swaim drew a parallel to the aftermath of the passage of California’s Meeting Invoice (AB) 5 in 2019, which successfully banned freelancing in lots of industries. After newspapers complained that the legislation would make it tougher for them to make use of freelance labor, Newsom backed a short-term after which a longer-term exemption for the trade.
After all, the controversy over the slender bakery exemption to the minimal wage legislation appears to overlook the bigger level: the whole legislation is a weird exemption from the state’s current minimal wage statute. Perhaps a particular curiosity and private good friend influenced that one part of the brand new legislation, however there isn’t any doubt that different particular pursuits—labor unions that give enormous marketing campaign contributions—are the rationale why the rest of the law singles out fast food restaurants whereas successfully exempting different employers.
Briefly: Newsom’s claims that particular pursuits did not affect one a part of the invoice can be extra plausible if particular pursuits hadn’t clearly influenced the whole invoice.
“This was a foul invoice to start with—imposing an unsupportable minimal wage on companies that function on razor-thin margins has already raised menu costs and accelerated layoffs within the trade,” says Swaim. “Its victims shall be small franchisees who do not have Panera’s pull and staff who are actually going through mass layoffs.”
