Why California’s Fast Food Council’s new law is good for business

Now that AB 257 has been signed into law, California has a unique opportunity to kick off freeway Business and employment strategies for owners and workers in the fast food industry.

AB 257 create a statewide “Fast Food Council” consisting of representatives of industry, workers, and government to establish minimum wages, safety, and employment and training standards for workers. workers in major fast food chains and their franchises. The bill also encourages cities with 200,000 or more residents to form their own regional councils.

So far, AB 257 has mostly been framed as a benchmark of employment that would be good for the industry’s 550,000 workers, which, of course, is at its core. Just framed that way, it was met with Opposition from industry lobbyists.

The key to AB 257’s success for the business and for the industry workforce is that it will cover all fast-food chains in the sector, including those owned by the company. and direct operators of major fast food chains and chain franchisees. Doing so will level the playing field and create pressure on low-paying businesses to learn how to manage their businesses and workforces with high-road strategies.

High street business strategy is one that can compete successfully by paying good salary and benefits because it achieves high productivity and low turnover through talent training and development, attracting workforce engage in problem solving and continuous improvement, treat everyone fairly and respect all workers’ rights.

This is in contrast to a low-road strategy that relies on low wages, high turnover, and strong resistance to any form of worker expression to remain competitive. While research has shown that in industries like fast food one of two strategies can help companies compete successfully, only high street companies can do so and provide high quality jobs.

As it will include representatives of industry, government and workers, the Fast Food Council can do more to promote and support high-street approaches to level the playing field between the shops. customers that have provided high-quality jobs and those who hold them back by competing on a low-wage, high-return model.

In doing so, the council will not only set minimum standards for working with industry and workforce leaders to pursue an industry-wide strategy to upgrade employment practices across the board. Research has shown that creates both good jobs and profitable companies.

This can start with an industry- and region-specific approach to training and development. Experts in this field concluded that this is the best way to drive workforce growth – and it works well in other industries such as hospitality and areas like southeastern Wisconsin. These approaches overcome the classic market failure that keeps many individual companies from investing in training: If they train workers, competitors bid them down, so the business costs and its competitors receive benefits. State and federal workforce development agencies understand this and desire to support regional and regional based initiatives. By encouraging cities to form their own councils, this measure is even better positioned to address this market failure.

Suppose, I think 80% of California’s fast food workforce that includes people of color, better training and internally developed and promoted practices will help companies meet diversity, equity, and inclusion goals ( DEI) that Most companies like it but too often it’s still elusive. Combining these development efforts with opportunities for advancement and mobility will help companies build a reputation as an employer of choice. Attract the next generation of talent and take a step toward greater economic equity as called for in California’s Future of Work report.

If council business, labor and government representatives work effectively together at the industry level, they will demonstrate that there is an alternative to intense battles over workers’ representation. , all too common as workers seek to gain a voice in their workplace in this industry. Councils can provide education and training to managers and worker representatives on how to build high-quality labor management Relationships that evidence suggests there are better outcomes for the company and its workforce.

We must carefully evaluate how this experiment works and see what it might mean for good business strategies for investors, employers and employees, not just in California but nationwide.

Thomas Kochan is Professor Emeritus at the MIT Sloan School of Management, co-founder of the Worker Empowerment Research Network, and author of Shaping the Future of Work: A Handbook of Change and the New Social Contract.

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