Editor’s Note: This article is part of an ongoing series exploring the political issues affecting restaurants and shaping the industry’s job market. Interested in discussing restaurant policy? Email us at [email protected].
The high cost of the restaurant business has sparked a political fight between owners and employees as the industry’s labor woes worsen. The National Restaurant Association is one of the biggest players in this conflict, pushing for changes that would lower costs for restaurateurs.
Although restaurant employment has reached pre-pandemic highs, the main concern of operators continues to be the labor supply, according to the NRA. Restaurant wages have kept pace with, and at times outperformed, inflation, making the restaurant sector the only major industry to see such wage growth post-pandemic.
But restaurant workers are joining forces to negotiate for higher wages, safer work environments and extended benefits. A slow wave of union organizing is putting pressure on employers ranging from starbucks and chipotle very small independent make such changes, which would incur additional costs for operators with thin margins.
The NRA is forming a coalition with franchises and national brands to defeat an effort by the Service Employees International Union and fast food workers to remake California labor law. Such changes would include an industry standard-setting council mandated by the FAST Recovery Act (AB 257).
Restaurant Dive spoke with Sean Kennedy, the NRA’s executive vice president of public affairs, about how the association plans to address issues facing restaurants.
This interview has been edited for clarity and brevity.
RESTAURANT DIVE: Let’s start with AB 257. How does the National Restaurant Association plan to stop it?
SEAN KENNEDY: California voters signed a petition saying the bill was offensive enough to them that they wanted it put on hold until it could be on the ballot in November 2024. The coalition gathered about 1 million signatures. That’s revealing.
What we’ve found is that when you explain the gist of what the FAST Act stands for, people scratch their heads and say, “That doesn’t make any sense. Why are you putting a new level of regulation on a subset of an industry? There are many small businesses up and down Main Street. Why would you treat one segment of one of those businesses as different from the others?
AB 257 targets national brands, which may have small business elements in terms of franchisees, in the case of McDonald’s, or may not, in the case of Starbucks.
KENNEDY: You [may] get the marketing push of a national brand, but you won’t get much more. You’re still expected to create a work environment that draws people to come and stay, just like the independent burger joint down the street. We are a small business industry in general.
Considering how many small business owners there are and how culturally entrenched this industry is, how did SEIU get AB 257 done?
KENNEDY: I don’t think it’s a surprise that California is the first state to do something like this. Organized labor has deep roots in the [California] assembly and senate, and they used it very effectively.
Coming out of the pandemic, he had a lot of sympathy for workers in the restaurant industry, so it was probably a bit of a perfect storm where the messaging aligns with it being a state that naturally has strong ties to organized labor.
Does that have any implications for state policy outside of California?
KENNEDY: There has not been any significant repartee to the FAST Act that has moved. Is this California specific legislation? We act like it’s not. We see this as such a unique challenge for a segment of our membership that we are investing in advocacy and public relations strategies in several states where we believe it could spread.
We’re interacting with chambers of commerce, engaging with local elected officials, mayors, state representatives, and restaurant owners.
Our defense is based on using the restaurant owners themselves so that they are not only the face of this, but also the voice. At the end of the day, they own one or two restaurants in a community and they will face a unique set of regulations that other businesses won’t. And to describe what the impact will be: Will this make it more likely that they will expand or employ more people or support the community, or less?
Is the National Restaurant Association concerned about the organization in the workshops and the militancy of the workers?
KENNEDY: No. What we want to make sure is that workers understand what are the pros and cons of being part of a union. That’s a problem that individual brands actually handle more than the National Restaurant Association. We do not provide legal advice on what they should do on that front. Different brands take different approaches.
Looking at high-level data from the Bureau of Labor Statistics, employment has recovered to late 2019/early 2020 levels. In constant dollar terms, sales have not grown much beyond that level. How is this employment situation different from the immediate context prior to the pandemic? What should the industry do to attract workers?
KENNEDY: [The industry should] educate people about what a job in the restaurant industry can be. There are a lot of people in this country who don’t want an office job. They don’t want to be sitting in a cubicle from nine to five. They want to connect with other people. They want to be a part of serving and serving a community.
Millennials look for different things in a workplace and for their careers than Gen Z and Gen X, etc. We are an industry that is constantly adapting to figure out how to get the best, the brightest and the most motivated. [workers]. For much of our workforce, this is their first, second, or third job out of college. Some of them are still trying to find themselves.
We spend a lot of time working to adapt and re-explain the restaurant industry to an ever-evolving workforce from a generational perspective.
What can major employers do to address those aspects of restaurant work that could alienate workers?
KENNEDY: Every job is going to have things that are attractive and things that may be less attractive. Working in a restaurant, depending on what your job is, can be very physical.
We are working on things as basic as air ventilation and cooling in the back of the house. We need to make sure we’re giving operators the right guidance to make the right decisions and the right investments on how to make upgrades to make the back of the house a more comfortable place for workers.
Many workers are drawn to restaurants by word of mouth from their coworkers or friends who work in a restaurant. Educating people on how to treat their workers plays a huge role in attracting other employees.
You [need to] have a management operation that is really listening to its employees. This also begins to move to the unionization front. Yeah [workers] feel that they are being heard. If they feel like they have skin in the game, it creates a more positive workforce and workplaces, where they don’t feel like they need to move into a union space or don’t feel like they need to leave to go. to another restaurant.
The advantage restaurant workers have, right now, is that once they’re trained, such as through the NRA Educational Foundation, it’s incredibly portable. Once you’re in a restaurant and you know how the back of house works, or you know how the front of house works, you’re a valuable poaching opportunity for another restaurant.