California Governor criticized for favoring donor with unusual minimum wage exemption
California Governor Gavin Newsom Under Fire for Allegedly Pushing for Minimum Wage Exemption for Donor’s Restaurant Chain
California Gov. Gavin Newsom (D.) has come under fire for allegedly pushing to exempt a chain of restaurant franchises owned by one of his most generous donors from the state’s new minimum wage law.
The fast-food wage law, which will raise California’s minimum wage at fast-food chains from $16 to $20 an hour starting in April, comes with an exemption for restaurants that bake and sell bread, which would include the two dozen Panera Bread locations owned by Newsom’s billionaire donor Greg Flynn.
Newsom advocated for the bread exemption, which legislators eventually included in the bill to win over the governor, due to his “longstanding relationship with a Panera franchisee,” one person familiar with the law’s passing told Bloomberg.
Flynn has been involved in several business deals with Newsom and made large donations to his campaigns, including $100,000 to quash a Republican-led recall effort against the governor and $64,800 to help him get reelected in 2022. The business magnate also said he knows Newsom well enough to be able to reach him via text, Bloomberg reported.
Flynn denied he played a role in bringing about the exemption, although sources have told Bloomberg he privately urged the governor’s team to not classify Panera as a fast-food chain. According to Newsom, the wage law, known as the FAST Act, was the “result of countless hours of negotiations with dozens of stakeholders over two years.”
The exemption for bread-selling restaurants came as a surprise to many, including Michelle Korsmo, head of the National Restaurant Association, who said ”everyone’s scratching their head” about the exemption. “You may be celebrating or you may be lamenting the bakery exemption. But remember, all of that comes through relationships,” she told Bloomberg.
Even the bill’s lead author, Assemblyman Chris Holden (D.), claimed to be unsure about the exemption’s origins, with his chief of staff Willie Armstrong telling Bloomberg, “We don’t know how that came about.”
The wage law faced immediate backlash from fast-food chains operating in California. McDonald’s described the increase in minimum wage as a ”devastating financial blow” that will cost each of its locations in the state an estimated $250,000 a year. Other chains such as Chipotle are reportedly eyeing a price increase to counter the rise in wage costs.
What concerns have been raised about Newsom’s support for the exemption and its potential impact on the minimum wage law?
Rg reported.
Newsom’s support for the exemption has raised concerns among labor activists and some lawmakers who argue that it sets a dangerous precedent and undermines the spirit of the minimum wage law. Critics say that the exemption appears to be a quid pro quo arrangement, as it benefits a donor who has provided significant financial support to Newsom. They argue that this raises questions about integrity and the influence of money in politics.
Advocates for the exemption, on the other hand, argue that it is a necessary measure to protect small businesses and encourage job growth. They contend that the baking exemption is reasonable as it pertains to the specific operations of certain restaurants and does not undermine the broader goal of raising wages for fast-food workers.
The controversy surrounding Newsom’s alleged involvement in securing the exemption points to larger issues of money in politics and the influence of wealthy donors. Critics argue that this situation is a prime example of how money can buy influence and potentially undermine the integrity of the political process. They call for greater transparency and accountability in campaign donations and for politicians to be held to higher ethical standards.
Newsom’s office has denied any wrongdoing and states that the exemption was added to the bill based on input from various stakeholders and through the standard legislative process. They emphasize that the decision was not influenced by campaign donations or personal relationships.
Regardless of the intentions or motivations behind the exemption, the controversy surrounding Newsom highlights the need for a robust and transparent political system that ensures the interests of the public are protected and that decisions are made in the best interest of the people, rather than the wealthy few.
As this story continues to unfold, it serves as a reminder of the importance of campaign finance reform and the need to address the influence of money in politics. Transparency, accountability, and ethical standards should be at the forefront of our political system to ensure a fair and just society for all.
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