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AB 257: Another Antieconomic California Boondoggle

After narrowly failing to make it through the California Assembly last year, AB 257 has been put back on the Sacramento agenda this year. Backers—unions and their Democrat operatives—think they can succeed this time. Now crunch time for that hypothesis is approaching, as the bill passed the state senate’s Labor, Public Employment and Retirement Committee in June and is scheduled to be considered by the California Senate Appropriations Committee on August 11, then voted on soon thereafter.

AB 257 was named the Fast Food Accountability and Standards Recovery Act (FAST Act), as if it would lead to faster economic recovery, rather than the opposite. Jackie Botts and Jesse Bedayn more accurately called it something very different—“a radical proposal” that would “allow the state to negotiate wages, hours and work conditions for an entire industry.”

FAST would create a government-appointed state council (as well as local councils) to set standards for all sorts of employment issues in the fast-food industry, as well as extend legal responsibility for compliance to franchisors rather than just franchisees. These are major union wish-list items that would enable forced unionization of the industry. It would apply to fast food restaurant chains with at least thirty franchises.

Despite Democrats’ and unions’ claims that the bill is a proworker means of addressing inequality by raising wages and improving working conditions, such claims deserve serious suspicion that this is just one in a long line of examples where “AB” stands for “another boondoggle.”

First, ask what California’s governments have done well enough in recent memory to justify turning a whole sector of the economy over to them. I can’t think of anything. Instead, our state has built a notorious reputation for high taxes and costly regulations producing unsatisfactory results. And in many areas, it has utterly failed at protecting Californians from assault and their property from crime, which is the government’s core function. That is a far cry from justifying expanding its reach further.

Second, remember that California politics is essentially dictated by unions. They are the only reason the state imposes project labor agreements, which saddle citizens with higher costs to transfer wealth to unions. Unions are the reason for Davis-Bacon Act restrictions at the federal level and similar ones at the state level that also exist to benefit unions by restricting everyone else. They are the real reason for restrictions on the rideshare industry. They are the primary impetus for protectionist legislation that harms most Americans. The only real reason unions are attempting to take over the fast food industry is that despite being given a host of special privileges and unique advantages, unions have been unsuccessful at unionizing many fast food workers.

That makes it crucial to understand that unions’ core efforts—trying to increase their members’ compensation—harm rather than help the vast majority of Americans as both workers and consumers. Unions artificially force up the cost of hiring their workers, and the resulting price increases harm consumers. The number of such jobs available is also reduced, because consumers will buy less at those higher prices.

The reduced number of such jobs, in turn, pushes workers into unemployment or into competition for nonunion jobs, pushing down compensation for everyone in those markets. Hurting consumers and most workers, while insisting that unions do the opposite, does not justify expanding union control over labor markets.

Third, we should understand how substantial unions’ special privileges and advantages already are. They range from strike powers to exemptions from antitrust laws to exemptions from liability for member violence (due to the Enmons ruling). (Unions leverage special government-granted powers, allowing current workers to prevent competition from others willing to do the same work for less, a form of collusion that any business would be legally prosecuted for.)

The Protecting the Right to Organize (PRO) Act, a major Biden administration initiative to do unions’ bidding, would provide even more unique advantages. It would repeal right to work laws that protect workers from being forced to join a union or pay union dues. PRO would require employers to provide private employee information (e.g., cell phone numbers, email addresses, and work schedules) to union organizers, violating the associational rights of those who don’t want to be approached or hectored by unions.

It would allow unions to initiate snap elections in nonunion workplaces more rapidly, limiting opponents’ ability to present opposing positions. It would codify “card check” elections, eliminating the protections against coercion that a secret ballot provides. It would let the National Labor Relations Board invalidate a vote against unionization for anything it decides represents “employer interference.” It would require contractors and franchisees to bargain with unions, outlaw employment arbitration clauses, authorize “secondary boycotts” by unions against companies maintaining a business relationship with a target company, and more.

Fourth, we should carefully consider the chasm between unions’ freedom-of-association claims and reality. Unions trumpet freedom of association to justify their existence. But they deprive many Americans of their associational freedoms. As the Supreme Court found in the Janus case, unions already inflict a “significant impingement on associational freedoms that would not be tolerated in other contexts.”

Union “rights” take away workers’ freedom to associate with a different union, to choose alternative forms of group representation, such as voluntary unions, to represent themselves in negotiations with employers, and to associate with nonunion employers. Workers’ freedom to resolve workplace issues directly with employers faces a similar fate, forcing such arrangements to be made exclusively through unions. Union association “rights” also take away employers’ freedom to not associate with them or to employ only nonunion workers. They take away consumers’ freedom to associate with lower cost, nonunion producers. That is, the freedom of association unions claim is their rationale is really a special privilege that is to be denied to others.

Unions even violate their own members’ associational freedom. As James Sherk has documented, not a single current worker in many unions ever voted to select that union, and vanishingly few current workers voted for them in other instances. That is because once a majority of an employer’s workers at a given time votes to certify a particular union, it becomes the monopoly negotiator for all its workers. No further elections need ever be held, and attempts to force them are strewn with roadblocks.

Fifth, ask why AB 257 would only apply to companies with thirty or more franchises. That makes sense if the goal is to impose extra burdens on large corporate franchisors to leverage them into unionizing their workforces. But it does not make sense if the concern is how food workers are to be treated, the bill’s supposed rationale. Shouldn’t we be concerned with all fast food establishments?

Shouldn’t we also be concerned with “slower food” restaurants? And what about the fact that running such franchises is the ground floor for many, who then earn their way up the income ladder, and the fact that, as Matt Haller notes, more than “60 percent of California restaurants are owned by people of color” (with more than forty local and minority chambers of commerce opposing AB 257).

Sixth, remember that just as unions dominate California politics, they and their backers will dominate the state and local FAST councils. It will essentially be unions negotiating over what they want to impose on everyone in the entire fast food industry. When was the last time such a self-serving political opportunity benefited anyone besides those given added dictatorial power?

There are a host of reasons for rejecting the FAST Act. It would expand the damage unions already impose on consumers and workers. It would reduce fast food workers’ freedom of association to the freedom to follow government-enforced union dictation. And the fact that so many workers in the industry have been unwilling to voluntarily unionize, despite the many special privileges unions have, is not a reason for giving unions more power to force them into it. Such coercion seldom improves the well-being of those being coerced.

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