Calif: Panera Bread owner gave $164K to Newsom, business exempt from new $20 minimum wage law
OAN’s Brooke Mallory
6:23 PM – Thursday, February 29, 2024
Following the billionaire owner of Panera Bread restaurants making major financial contributions to the California governor, Gavin Newsom signed a bill exempting the food establishment from a new $20 minimum wage raise.
Governor Newsom (D-Calif.) signed a bill into law in September that is meant to increase fast food employees’ minimum pay from $16 to $20 per hour.
Fast food workers will have a minimum wage of $20/hour beginning on April 1st—$4 higher than the U.S minimum wage for 2024. This applies to chains with 60 or more locations across the nation, and is effective as of April 1, 2024, according to ABC 7 News.
However, an important note to point out is that the Fast Food Accountability and Standards Recovery Act (FAST Act) has a unique exemption stating, “chains that bake bread and sell it as a standalone item” will not be forced to raise their minimum wage, according to Bloomberg News.
According to reports, Newsom requested the exemption, which benefits a number of people, including wealthy CEO Greg Flynn of Flynn Restaurant Group, who controls at least 24 Panera Bread establishments in the state.
Bloomberg News also reported that Flynn went to the same high school as Newsom, and that he has given over $164,800 to Newsom’s political campaigns.
According to disclosure forms, Flynn is one of the biggest franchisees in the U.S., with thousands of brands under his belt, including Wendy’s, Taco Bell, Applebee’s, and Pizza Hut. He also purchased a Napa Valley resort run by Newsom’s hospitality company in 2014.
Flynn denied any involvement with Newsom regarding the addition of the law’s bread exemption.
Last month, Newsom informed reporters that the exemption was “part of the sausage-making” process.
However, the National Restaurant Association’s Michelle Korsmo said at a convention last year that “everyone’s scratching their heads” regarding the “random” bread exemption.
“You may be celebrating or you may be lamenting the bakery exemption,” Korsmo said, according to Bloomberg News. “But remember, all of that comes through relationships.”
When the bill was initially proposed in 2022, Flynn openly opposed it. He said that increasing the minimum wage for workers in fast food establishments would negatively impact franchise owners’ bottom lines and raise prices for consumers.
According to Bloomberg, Flynn even urged Newsom’s aides to reevaluate whether Panera Bread qualifies as fast food.
The union that was advocating for the increase in the minimum wage allegedly accepted the exception for bread sellers as a compromise in order to win the governor’s backing. This led to its inclusion in the legislation.
In terms of other businesses facing the possibly impending law, Chipotle’s chief financial and administrative officer, Jack Hartung, additionally issued a warning earlier this month stating that customers in California can anticipate “significant” price increases as a result of the increase in minimum wage.
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What factors led to Governor Newsom signing a bill that exempts Panera Bread from the new minimum wage raise?
Title: Controversy Surrounding Panera Bread’s Exemption from California’s Minimum Wage Increase
Introduction
Recent reports have shed light on a controversial move made by California Governor Gavin Newsom regarding the minimum wage increase for fast food workers in the state. The billionaire owner of Panera Bread, Greg Flynn, made substantial financial contributions to Newsom’s campaign, leading to the signing of a bill that exempts the popular food establishment from the new $20 minimum wage raise. This exemption has sparked debates and raised questions about the fairness and transparency of the decision-making process.
The Minimum Wage Increase and the Bread Exemption
Governor Newsom signed a bill into law in September aimed at increasing the minimum pay for fast food employees from $16 to $20 per hour. However, the Fast Food Accountability and Standards Recovery Act (FAST Act) included a unique exemption clause that stated “chains that bake bread and sell it as a standalone item” would not be obligated to raise their minimum wage. This exemption specifically benefits Panera Bread establishments in California, as the chain primarily focuses on selling freshly baked bread.
Governor Newsom’s Controversial Move
According to reports, Governor Newsom personally requested the exemption, which directly benefits Greg Flynn, the CEO of Flynn Restaurant Group, who controls at least 24 Panera Bread establishments in the state. It is worth noting that Flynn had contributed over $164,800 to Newsom’s political campaigns in the past. Furthermore, Flynn and Newsom attended the same high school.
Flynn’s Denial and Relationship with Newsom
Flynn has denied any involvement with Newsom regarding the inclusion of the bread exemption in the law. Disclosure forms reveal that Flynn is one of the largest franchisees in the United States, operating several popular brands such as Wendy’s, Taco Bell, Applebee’s, and Pizza Hut. He also purchased a Napa Valley resort previously run by Newsom’s hospitality company in 2014.
The Debate and Industry Reactions
While Governor Newsom referred to the bread exemption as a result of the legislative process, industry experts and critics argue that it raises concerns about favoritism and special treatment. The National Restaurant Association’s Michelle Korsmo expressed confusion regarding the “random” bread exemption and highlighted the importance of relationships in such decision-making processes.
Opposition and Union Involvement
During the initial proposal of the bill in 2022, Flynn openly opposed increasing the minimum wage for fast food workers, citing potential negative consequences for franchise owners and consumers. Reports suggest that the union advocating for the minimum wage increase accepted the bread exemption as a compromise in order to secure Newsom’s support for the legislation.
Conclusion
The controversy surrounding Panera Bread’s exemption from California’s minimum wage increase has brought attention to the potential influence of campaign contributions on political decisions. Critics argue that the exemption raises questions about fairness and transparency in the legislative process. Moving forward, it is crucial for policymakers to ensure that decisions regarding minimum wage increases prioritize fairness and benefit all workers in their respective industries.
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