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California bill helps fast food workers 'beyond one store at a time': SEIU President

SEIU President Mary Kay Henry joins Yahoo Finance Live to discuss California passing a bill that allows a government panel to set wages for fast food workers.

Video Transcript

DAVE BRIGGS: California's legislature passed a bill Monday that would create a panel that would set wages and conditions for half a million fast food workers in the state. Workers could make up to $22 an hour starting next year if, and a big if here, if Governor Gavin Newsom signs the bill. Joining us now is Mary Kay Henry, the President of the Service Employees International Union. Nice to have you on the program. Why is this the right way to go about it rather than have these franchises unionize?

MARY KAY HENRY: Well, these workers have been trying to organize inside stores for 10 years. And they understand that the solution to their problem needs to be beyond one store at a time. And setting a statewide table that puts franchise owners, workers, and government together allows those groups to tackle the problems of low pay, health and safety issues, and harassment and discrimination on the job.

RACHELLE AKUFFO: Now, obviously, we are waiting for a response from some of the restaurant community. Now, some of them are saying the business interests-- the business interests are saying it unfairly targets the fast food industry and will drive up food prices. What's your response to that?

MARY KAY HENRY: They said that when we fought for $15. And what has happened instead is $15 minimum wage has put more money in the pockets of working people who are spending it in their neighborhoods and that's creating more jobs. And so I think what would really benefit all of us at this moment is if industry could come to the table thinking together about how to solve the problems of worker shortages, and education, and training needs that they have, and link arms with their frontline workforce to improve conditions for consumers, workers, and employers at the same time.

DAVE BRIGGS: That number, Mary Kay, 20%, comes from UC-Riverside, is independent analysis that says, again, the cost of food for these restaurants-- and it has to be more than 100 locations across the country-- 20% increases for food costs would dramatically impact lower income residents of California. How concerned are you about that?

MARY KAY HENRY: Well, I questioned the 20% increase as a result of this fast food sector council. I think that rising costs have hit low wage workers and their families the hardest all across the economy. And so the challenge, I would say back, is there are workers around the world and in the US who have high wages and benefits, but have a labor management relationship where prices have been held in check because there's a collaborative relationship between labor and employers.

RACHELLE AKUFFO: And I want to get your response when it comes to franchises. We saw that International Franchise Association President and CEO Matthew Haller released a statement against the bill writing, quote, "AB257 is a discriminatory measure designed to target the franchise business model. The bill creates an arbitrary standard for one sector of workers, while punishing small business owners and their customers."

The statement also says that the bill is, quote, "based on the flawed premise that working conditions are worse in counter-service restaurants rather than other food sector establishments." So what is your take on that comparison? Is it worse for some of these counter-service workers?

MARY KAY HENRY: You know, I think that CEO needs to consider, these are working people in these restaurants who have to decide between paying groceries or rent and whether they can get school supplies for their kids. And it's in a sector of the economy where the major corporations are earning record profits.

And this is simply a way for working people, employers, and government to come together to think about what wage is reasonable that doesn't make food prices go out of control or hurt the customer, but allows the workers on the frontlines of these stores to live with dignity and respect and care for their children. And that's the key question that the fast food sector council is going to try and address in a way that puts all the stakeholders at a table.

These workers do not want to eliminate the franchise model. They simply want to be able to work hard for a living, and lead a decent life, and have their children do better than they've done.

DAVE BRIGGS: Some fear this would stop franchise expansion into the Golden State. But let's talk about federal minimum wage is $7.25. California, January 1, will be the highest in the country at $15.50. So some argue that is the last state that needs wage improvement.

The other aspect here that the opponents say is only 1.6% of current labor violations come from the fast food industry. So they're saying you're solving a problem that doesn't exist. What's your reaction?

MARY KAY HENRY: Well, low wages persist even in California. And $15 an hour, while it was a huge step forward back in 2015 when it was passed, has now been outstripped by rising prices. And there are many parts of California where a $15 minimum wage is like the $7.25 minimum wage in other parts of the country.

And that's why the sector council is a huge step forward for employers and workers in being able to consider what is the best wage that is going to attract the workers they need, reduce the turnover that costs employers money, and creates a livable wage for the people doing these jobs on the frontlines.

RACHELLE AKUFFO: And, Mary Kay, we did already start seeing this unionization push across the country, especially during COVID when a lot of workers were like, look, we're customer-facing and we're under a lot of pressure here. In terms of the potential for this sort of bill to then sort of be replicated across the country, what's the likelihood?

MARY KAY HENRY: Well, the fast food worker movement has been very active in states outside of California. Workers came from New York, and Illinois, and Kansas, and Missouri, and Florida. And I expect that those workers are going to join together in their states and press their elected officials to create a new model that allows these jobs to be good jobs that people can raise their families on.

DAVE BRIGGS: It's now in the hands of Governor Newsom. Mary Kay Henry, thanks so much. Appreciate your insight here today.