California Governor Gavin Newsom (D-Calif.) is facing greater scrutiny after it was discovered that a minimum wage carveout he is pushing for would benefit one of his top campaign donors.
According to the Washington Free Beacon, the newly-passed law that will go into effect in April will raise the minimum wage at fast-food chains from $16 to $20 an hour. However, the law includes an exception for restaurants that bake and sell bread; one of the chains that would thus be excluded from the new $20 minimum wage would be Panera Bread, which is owned by Democratic megadonor Greg Flynn.
Flynn had previously donated $100,000 to oppose the recall election against Newsom in 2021, then donated another $64,800 to support the governor’s re-election campaign in 2022. Flynn has even admitted to knowing Newsom so personally that he can text him directly.
Newsom claimed that the new law, known as the FAST Act, was negotiated after “countless hours of negotiations with dozens of stakeholders over two years.” Flynn denied having anything to do with the exception for Panera, although other sources have claimed that it was indeed Flynn who pressured Newsom into supporting the carveout.
The exception drew criticism even from figures who wouldn’t necessarily be political enemies of Newsom. Michelle Korsmo, the head of the National Restaurant Association, said that “everyone’s scratching their heads” in reaction to the exception, adding that “you may be celebrating or you may be lamenting the bakery exemption. But remember, all of that comes through relationships.”
Newsom’s push for the exception even drew criticism from the original author of the FAST Act, Assemblyman Chris Holden (D-Calif.), who said “we don’t know how that came about.”
Other fast-food chains lashed out at the law itself, regardless of the bizarre exception. A spokesman from McDonald’s said that the new law would cost each of the company’s locations at least $250,000 a year due to the forced pay raise. This reflects the ongoing trend of California passing laws that are increasingly hostile to businesses, thus forcing many companies to relocate to other states to escape such high costs.