Reflecting on Damar Hamlin and California's Fast Food Pay Conundrum

On today's episode of the 5 Things podcast:

USA TODAY 5 Things Sunday Host James Brown reflects on watching Buffalo Bills' Safety Damar Hamlin going into cardiac arrest during a football game.

Also, James and USA TODAY's Medora Lee discuss the minimum wage and a controversial California law that turns over determining the minimum wage for some fast food workers to an appointed board.

California Gov. Gavin Newsom signed the law known as AB 257, or the Fast Food Recovery Act into law on September 5, 2022. A million people signed a petition to have a referendum on the law. The law is expected to discussed in court in January 2023.

Follow James Brown on Twitter.

Medora Lee's USA TODAY archive

Medora's coverage of California's Fast Food

Restaurant group lawsuit halts California's Jan. 1 fast food bill

Not so fast. A million signatures delay California's fast-food bill for a vote in 2024

If you have a comment about the show or a question or topic you'd like us to discuss, send James Brown an email at jabrown@usatoday.com or podcasts@usatoday.com. You can also leave him a voicemail at 585-484-0339. We might have you on the show.

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Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.

James Brown: Hello, and welcome to USA Today's Five Things. I'm James Brown. It's January 8th, 2023. In this week's episode, USA Today finance reporter, Medora Lee, and I will discuss California's fast food worker wage conundrum. But first, regular listeners of the show know that I say two words, go Bills, before just about every episode. There's tons of reasons why and in the light of Buffalo Bills' safety, Damar Hamlin going into cardiac arrest during a game on national TV, I think it's a good time to explain some of those reasons. I'm a native of western New York. I grew up and live just an hour east of Buffalo. I'm a Niagara University graduate, NU is just north of Buffalo.

Buffalo is also where one of my childhood broadcasting idols, Tim Russert, was born. During his tenure as moderator of Meet the Press, he'd occasionally end episodes with go Bills. I remember watching and smiling. I promised myself that I'd do that someday. Go Bills is an amorphous phrase, it has many meanings and many shapes. It's a greeting, a punctuation mark, a tie that binds our community and a point of pride for our tribe. I can't tell you how many times strangers and other Bills' fans see me out in Bills' gear and say, "Go Bills," and I respond, "Go Bills." The Bills are a part of the fabric of our community. When they lose, it feels like we did.

When they win, we feel it too, and when Damar fell my heart was with him. Thankfully, through some luck and some amazing medical personnel, Damar is somehow recovering slowly, breathing on his own, even talking to his teammates on Friday morning. My thoughts and prayers are with him, and I hope yours are too. I've been watching football my entire life and I've never seen anything like that moment. In the hour or so after, I actually found myself begging, praying that the NFL would cancel a football game. I can barely believe that. I know the explanations but I'm still piecing together how I feel about it and whether I'll be okay watching the sport I love. We'll see. I suppose maybe we'll do an episode about it, but there are three things I know for sure right now. Life goes on as does this show and I'll keep saying go Bills, be well Damar.

This week, we start with a pop quiz. You've got five seconds. What is the minimum wage in the United States? 5, 4, 3, 2, 1. The answer is, it depends. Well, kind of. I'll explain. Nationwide, the minimum wage is $7.25. That's hard to believe in 2023, but that's according to the US Department of Labor, but states can make their own decisions about wages. The minimum wage in Georgia and Wyoming is actually $5.15, but all employers in the country have to pay at least the federal minimum wage. 30 states have decided that 7.25 isn't enough. Many of them have changed their laws in recent years and, in some cases, recent weeks.

Take my home state of New York. As of New Year's Day 2023, the minimum wage downstate, in New York City, Long Island, in Westchester County, it's $15. It's different where I live in western New York. Here, it's 14.20, for now. Things are changing again in the next few years. Wages are also different for tip workers and home healthcare aide.s in California, they're taking things further. The minimum wage there is 15.50, unless you work in fast food. A bill was passed a few months ago that could change things radically. USA Today finance reporter, Medora Lee, has been covering this. Medora, welcome back to Five Things.

Medora Lee: Well, thanks for having me, I appreciate it.

James Brown: Help me understand this law. What exactly does it do?

Medora Lee: This has been a story of lots of twists and turns. The unions collected signatures and got a bill passed last summer to establish a 10 member fast food council. These members would not be elected, they would be appointed, and the reason for this was because they thought that fast food workers should be protected. There are lots of things in the bill, protecting their workers' rights, establishing good working conditions, but one of the big sticking points was also that they could decide to raise the minimum wage to, get this, $22 an hour. That was actually a bill that passed. It was signed by Governor Newsom on Labor Day 2022 with lots of fanfare.

They were all excited, but then the restaurant groups and some franchise groups got together and they got a petition for a referendum on this bill because they said it was not right to pass this bill, it should go to the voters to decide because this $22 minimum wage would increase fast food prices for everybody, as businesses would have to pass on those costs to consumers. Under the weight of 40 year high inflation, this was going to be a big deal for franchisees, for restaurant owners, and for consumers. And so, they were able to collect over a million signatures and they handed them in to the Secretary of State, think it was December 5th. And so, usually when they get to that point, the signatures still have to be verified but usually they will then put the legislation on hold until all of those signatures can be verified. But in this case, at the very last minute and just before New Year's, the state said they were going to go ahead and just put the law into action anyway as planned on January 1, 2023 so this was extremely problematic.

The restaurant groups got together and they filed a lawsuit. I actually didn't think the courts would take it up. I mean, this was literally two days before the holiday weekend was about to start, but the court took a look at their lawsuit and said they were going to put a temporary restraining order on it until they could hear two sides in January.

James Brown: As you've laid out, there are lots of sides to this issue, it's a totally complex story. It's the kind of thing I like. Let's say I'm a minimum wage worker and I live in California and I don't work in fast food. I would be thinking, "Man, I'm getting screwed." Why Is it just for fast food workers? Do you know?

Medora Lee: Exactly. Well, it's not just even fast food workers. The president of USA McDonald's or McDonald's USA actually pens a letter, an open letter that they put up on the website last summer, and this is really unusual for McDonald's. They don't usually get too involved vocally, outwardly about legislation and they've supported minimum wage hikes and things like that in the past for their workers. He makes a point saying that this is not even just for all fast food workers, it's for a select group of fast food workers, and so he felt that the legislation was extremely targeted. There are some provisions, things like, okay, so all fast food workers who work at a chain that has 100 stores nationally, at least 100 stores nationally. And so, there are people who can operate a chain of stores throughout the state of California.

Maybe they own 20 stores and those people would not be affected. Yet, McDonald's franchises a lot of their restaurants, actually most of their restaurants, so it could be a single franchiser in the state of California, like I just own one or two McDonald's but I would be slapped with this because the chain that I represent owns hundreds of stores across the country, so is that fair? That was one of the things that he pointed out. I haven't checked on this but I have no reason to think that the president of McDonald's USA is wrong. But he also said that, interestingly, it excludes places that bake bread.

James Brown: That's odd.

Medora Lee: Extremely odd. He says in his letter that he can only assume that there was some back room politicking going on here because that's extremely odd.

James Brown: I'm just thinking through the scenario you're laying out here. Let's say I own a franchise, I own part of a chain. I own one franchise of 100 and it's the only franchise in California. Therefore, my workers would be subject to this law.

Medora Lee: If I'm just a working class kind of person, I saved up all my money and I'm going to open up a McDonald's. But because I'm part of a McDonald's that has 100 stores across the country, at least, I would be subject to it. The unions who pushed for this law said that a lot of minority people work at these restaurants, and so this would help a lot of the minority community. The other side, the restaurant folks said, in fact, a lot of minorities franchise businesses like McDonald's or Chick-Fil-A, or whatever, and when I think about ... I have to tell you that I have a unique perspective because my family ... I'm a minority, my parents were immigrants and they came to the United States, and so I can see the pro business side, the business side, but I'm also a worker. I work for a big company like Gannet, USA Today, and so I can see it from the worker side so I kind of straddle both sides.

Coming from Chicago, I can see that that's very true. Even my dad has remarked to me about this. We still live very close to Chicago's Chinatown where our family business started. Back in the day, people would work really hard and open up a little grocery store or a little restaurant in the neighborhood. But nowadays, if you drive through Chicago's Chinatown, you see a lot, a lot of new businesses and their chains. Something has changed in the way that people start businesses so I will see a lot of Asian bakeries and Asian restaurants and then find out later that these are big chains that are from overseas.

I feel like the restaurants aren't completely wrong that way, that a lot of minorities find that as a way to earn a good living and they save up and someone has already given them the blueprint and the map to start a successful business because they may not have the know-how and they get trained, but it's still kind of like their own business. You know what I mean?

James Brown: Yeah. I think I get where you're going. Please correct me if I'm wrong, what I'm hearing here is, in a lot of cases franchises are a ticket to wealth for minorities.

Medora Lee: Yeah.

James Brown: There are also places where a lot of minorities work making very little money.

Medora Lee: Right, exactly. It's kind of interesting, right?

James Brown: Yeah, it is interesting. Both could end up hurt by this scenario.

Medora Lee: I can see all sides to this, I really can. I mean, I think that people should be treated well and be paid fairly but, at the same time, I think a lot of people don't really think about business owners because I think that every business owner or land owner is lumped in with pretty close to Jeff Bezos or Elon Musk, which is just really not the case. We're not all millionaires, but I think that that mentality is that, "Oh, you own a business and it's successful and you're part of McDonald's, you must do really well and you're rich and taking advantage of us," but it's not always really the case. I think that sometimes people just generalize a little too much. That's just my opinion.

James Brown: All right, so let's look at the consequences here. When businesses have to pay more for something, workers being one of those things, generally the price of their product goes up. So if this board makes a decision to raise employee wages as much as 60%, then 3% into perpetuity, price of that hamburger or taco is going to go up a bunch.

Medora Lee: Right. They may not put it in right away, like overnight, but you're talking about that meal's going to definitely cost you more. And so, there's that other argument too is, okay, look at the people who eat fast food, the demographics of those people. This is where it starts to get so murky. A lot of people ... I mean, we always have the kids who doesn't like french fries or milkshakes, but we also have lower income and middle income workers who find that as a quick meal that they can afford. And so, that's another kind of wrench in the picture is that we have to look at the people who consume these meals the most and then now they're going to be hurt. I mean, I don't know how much eggs are there but I think I went to the grocery store the other day and a dozen eggs are almost $4.

James Brown: Same here.

Medora Lee: Right, so now my fast food prices are going to go up like 20%, 30%.

James Brown: The cost of these meals are going to go up. At the same time, these jobs will be more attractive but they'll likely be less of them.

Medora Lee: Right, exactly. That's why I think that a lot of the critics on the restaurant side say, "Who benefits from this? Which big entity benefits from this?" Maybe the unions.

James Brown: Perhaps.

Medora Lee: Yeah. I don't want to say that the unions are bad, I don't think. Like I said, I think the unions, they have the important role to play when something bad happens. It's always good to have a big entity on your side who's going to fight for you, right?

James Brown: Yeah, absolutely. There is an entire side of this that you could argue that if you're a little guy, you're a worker, you're making minimum wage, and you're working for a franchise of a giant company, McDonald's or Wendy's or Taco Bell or what have you, your wages might not go up without having some representation. In this case ...

Medora Lee: Exactly.

James Brown: ... An elected board deciding what your industry's wages should be.

Medora Lee: Right. It would maybe make their lives a little bit easier. They would be able to afford their rent better without having to take on more debt. But McDonald's has come out and said that they believe that people should get paid. They're not against raising the minimum wage. They have raised the minimum wage but I think that they object in how it's being done and how they feel the bill is targeted towards certain chains. I don't know, maybe this is going to end up with everybody coming back to the table, we can hope, and everybody gets a little bit of something. I don't know. We'll have to see because the courts will hear the case and we'll see if it goes to a ballot. If it goes to a ballot, we won't know for a while because I think that it would go on the November 2024 ballot.

James Brown: So that's just under two years from now.

Medora Lee: Yes, and then the voters will decide. If it does go to a ballot and you live in California, expect to see tons of commercials on this because they said that both sides have raised a lot of money to hash this out.

James Brown: Is this just a California thing? Are there seeds of this in other states too?

Speaker 2: I'm not sure if there have been discussions in other places, this far reaching. I think that this is where the sticking point is. I think that maybe a lot of people think that California would be the place to start it because they're historically seen as extremely progressive, but once California goes, a big state like California, this is the fear is that copycat legislation will start to crop up everywhere. If it followed the pattern, it would go from California to maybe New York to Chicago, if I had to guess.

James Brown: Any famous last words?

Medora Lee: Any famous last words? Oh my goodness, I'm on the hot seat here. I don't know if I have any famous last words. Go eat your fast food now before the prices may or may not go up in California, I don't know.

James Brown: Medora Lee, thank you for joining me.

Medora Lee: Thanks. Will talk to you later soon, hopefully, I love this show.

James Brown: If you like the show, write us a review on Apple Podcast or wherever you're listening and do me a favor, share it with a friend. What do you think of the show? Email me at jabrown@usatoday.com or leave me a message at 585-484-0339, we might have you on the show. Thanks to Medora Lee for joining me. And, to Alexis Gustin and Shannon Ray Green for their production assistance. For all of us at USA Today, thanks for listening. I'm James Brown and, as always, be well.

This article originally appeared on USA TODAY: Reflecting on Damar Hamlin and California's Fast Food Pay Conundrum