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Gavin Newsom accused of seeking exemptions for key donors from wage hike requirements

By Stew Davidson
|
March 1, 2024

A new California law has raised fast-food workers' minimum wage, but a key donor to Democrat Gov. Gavin Newsom has secured an exemption.

In a recent move supported by Newsom, the minimum wage for fast-food workers in the Golden State was set to increase to $20 per hour starting April 1. However, a notable exemption has come to light, seemingly tailored for a close associate and major donor of Newsom's, sparking controversy and raising questions about the integrity of the legislative process, as reported by The Blaze.

The controversial carve-out

The law, initially intended to enhance the financial well-being of fast-food employees across the state, has been criticized for its selective application.

Specifically, an exemption has been made for establishments that operate an on-site bakery, a criterion that conspicuously benefits the Panera Bread locations owned by billionaire Greg Flynn, a figure closely connected to Newsom.

This exemption appears to stem from a specific provision within Assembly Bill 1228, which narrowly defines eligible fast-food restaurants, thereby excluding Flynn's Panera Bread outlets from the mandated wage increase.

The definition includes a clause that spares establishments with an on-premises bakery, directly impacting the financial obligations of Flynn's business operations.

Newsom's response to the exemption

When questioned about the exemption, Newsom defended the legislative process as a complex negotiation, implying that such outcomes are part of the political give and take.

Newsom said:

That's part of the sausage-making that was part of 257, the original bill, and we went back and forth and [it] was part of the negotiation. It's the nature of negotiation.

This defense highlights the intricate balance of interests that often characterizes legislative decision-making, yet it also sheds light on the potential for personal relationships to influence policy outcomes.

The background of Newsom and Flynn

The connection between Newsom and Flynn dates back to their shared high school experiences and extends into their professional lives.

Notably, Flynn has been a consistent financial supporter of Newsom's political campaigns, contributing significant amounts over the years.

These contributions, alongside their personal and professional history, raise concerns about the potential for conflicts of interest in the crafting of legislation, especially when it appears to specifically benefit individuals within the governor's inner circle.

The legislative history surrounding the minimum wage increase for fast-food workers reveals a complex interplay of political, personal, and financial interests.

Initially, a more expansive bill, AB 257, proposed a higher minimum wage increase and included the bakery exemption. However, this bill faced opposition and was eventually replaced by AB 1228, which retained the exemption while setting a lower wage increase threshold.

The financial implications for Flynn and fast-food franchises

For Flynn, the exemption could represent significant cost savings, especially when compared to the financial burdens faced by other fast-food franchises required to comply with the wage increase.

For example, McDonald's franchisees are reportedly bracing for a quarter-million-dollar uptick in annual expenses due to the new law.

This disparity in financial impact underscores the broader concerns about equity and fairness in legislative decisions, particularly when they seem to disproportionately favor certain businesses over others.

Despite the exemption, some of Flynn's Panera locations have voluntarily committed to paying the $20 hourly wage for certain positions. However, inconsistencies remain, as not all locations have adopted this policy, leaving some employees earning less than their counterparts in non-exempt fast-food establishments.

The unanswered questions and the need for transparency

The revelations surrounding the wage increase exemption have prompted calls for greater transparency and accountability in the legislative process.

Critics argue that personal relationships and financial contributions should not unduly influence policy decisions, especially those affecting the livelihoods of countless workers.

The lack of response from both Newsom and Panera Bread representatives to inquiries about the exemption further compounds the issue, leaving many questions unanswered and fueling speculation about the motives behind the legislative carve-out.

Conclusion

  • A new law increases the minimum wage for fast-food workers in California, but an exemption benefits a donor to Gov. Gavin Newsom.
  • The exemption specifically applies to establishments with an on-site bakery, notably excluding certain Panera Bread locations owned by Greg Flynn from the wage increase.
  • Newsom's defense of the legislative process and the exemption highlights the negotiation aspect of lawmaking but raises concerns about potential conflicts of interest.
  • The financial and political connections between Newsom and Flynn, including significant campaign contributions, add a layer of complexity to the controversy.
  • The disparity in financial impact between exempt and non-exempt fast-food establishments raises questions about fairness and equity in the application of the law.
  • The lack of transparency and response from involved parties calls for greater accountability in the legislative process.