83 Percent of Surveyed Economists Oppose FAST Recovery Act

This week, the Employment Policies Institute released a survey of labor economists on the potential impacts of California’s Fast Food Accountability and Standards Recovery Act (AB 257).

Conducted by Dr. Lloyd Corder of CorCom, Inc., Carnegie Mellon and the University of Pittsburgh, the online survey was completed by 67 US economists in February 2022. Responding economists specialized primarily in labor (69%), and primarily identified their political affiliation as Independent (56%), Democrat (18%), and Republican (16%).

Key findings reveal economists believe California’s bill, and future similar proposals in other states, would have significant negative consequences for the fast-food restaurant industry and their employees:

  • A strong majority of economists (83%) oppose the adoption of the FAST Recovery Act (somewhat, 12%; strongly 71%).

  • The majority think the FAST Recovery Act will have a negative impact on fast-food restaurants and employees:

    • The cost of operating a franchise will increase (93%).

    • Fewer restaurant chains will be willing to operate in California and other states with similar laws (84%).

    • Prices will be raised for consumers as business owners pass on higher costs created by council mandates (84%).

    • The law would undermine the current franchise business model by creating joint legal liability for independently-owned franchisees and the franchisor (75%).

    • Franchisees will close restaurants (73%).

    • The law would lead to additional legal liability for small business owners (63%).

  • Most (84%) agree that the law’s proposed 13-member state council—and up to 82 local-level councils—that sets wage and labor standards would have a negative impact on the fast-food restaurant industry’s growth in California (negative, 32%; very negative, 52%).

  • Nine-in-ten (89%) think there will be price inflation if the law’s 13-member council sets wage and labor standards for fast-food restaurants (moderate, 60%; significant, 29%).

  • Eighty-seven percent think the impact on growth and hiring will be negative (negative, 39%; very negative, 48%).

  • Most (87%) think if similar laws were adopted in other states or nationally, it would have a negative impact on the total number of jobs in the fast-food restaurant industry (negative, 48%; very negative, 39%).

Find the full report here.