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The Oceanside Chamber of Commerce opposes the FAST Recovery Act, believing it disincentivizes restaurateurs and franchisees from reentering the industry or expanding their business. Stock photo
Community CommentaryOpinion

Commentary: FAST Recovery Act threatens role of restaurants in Oceanside and beyond

By Scott Ashton

From fine dining to quick service, Oceanside’s restaurants are an important “third place” for people to gather away from their homes and workplaces. They serve as a kind of living room for families to celebrate special occasions, friends to hang out and businesses to meet up.

Restaurants are an anchor in our community supporting many local civic groups and sports teams. On top of it all, they continue firmly forward even in the face of obstacles.

Restaurants’ persistence is particularly remarkable considering the challenges presented by the pandemic.  COVID-19 led to approximately 110,000 permanent restaurant closures in the U.S. (17% of all restaurants in the country) according to the National Restaurant Association.

Through the COVID-19 crisis, the restaurant community in Oceanside has demonstrated remarkable resilience and leadership in protecting workers, while serving tens of thousands of residents and visitors. Through grit and determination many local restaurants have survived and succeeded.  It is important to recognize and support the role of restaurants in our economy. Here are three reasons:

First, restaurants are a local job-creating machine. Earlier this month, the California Employment Development Department released statewide unemployment figures. Though not as rosy as previous months, San Diego County’s June unemployment rate of 7% is nearly half of the 13.5% from one year ago.

A key employment sector, Leisure & Hospitality, added 23,400 jobs over the past year, more than any other sector. Statewide, the sector represents 1.5 million eating-and-drinking-establishment jobs, which is roughly 11% of the state’s workforce.

Second, restaurants serve as an on-ramp for many “first jobs.” According to the National Restaurant Association, nearly half of all adults have worked in the restaurant industry at least once during their life and over 25% of adults worked their first job in a restaurant. These jobs provide individuals with work experience and transferrable skills.

Working in a restaurant also provides flexibility. Many people seek jobs that are outside the conventional 9-5 schedule. Local residents attending MiraCosta College, for example, require employment that does not conflict with class schedules.

Similarly, parents with young children or children who have not yet returned to in-person instruction also require employment opportunities with flexible hours. Scheduling flexibility is also a critical need for the many active-duty military families living in Oceanside. The restaurant community provides these large population cross-sections with options when few alternatives exist.

Third, restaurants are diverse and inclusive workplaces. Restaurants offer an open door to people from all backgrounds the opportunity to open their own business, grow that business, and prosper. Restaurant franchises in particular are known to be overwhelmingly operated by and employ minorities. 

According to the US Census Bureau’s American Community Survey (ACS), in California people of color represent nearly 70% of restaurant owners, 80% of chefs, nearly 70% of restaurant managers, nearly 64% of wait staff. In addition, 50% of California restaurants are owned or partially owned by women.

And yet, despite the challenges the restaurant community has faced over the past 16 months, California’s state-level policymakers appear bent on putting forward a major obstacle: the so-called FAST Recovery Act. 

Sponsored by the Service Employees International Union, the FAST Recovery Act was introduced at the beginning of the 2021 Legislative Session by Assemblymember Lorena Gonzales (D-San Diego). In the initial attempt, it failed to muster the votes to move forward due to its many flaws. Namely, the legislation creates a joint liability making the national or international restaurant franchisor automatically and jointly liable for the neighborhood franchise.

The liability provisions include hiring, firing, the payment of wages, and the provision of benefits. Essentially the national brands, instead of Oceanside-area franchise owners, would be responsible for business functions outside their control. This legislation would upend the franchise model and it is certain to discourage future franchise ownership.

Another provision of the legislation targets both franchise and non-franchise restaurant concepts by putting outsized authority in the hands of an unelected state-level council and an unlimited number of local councils. These councils could adopt standards that apply to “subgroups” of the restaurant community resulting in a patchwork of different geographic worker and employer standards — further adding to the complexity and challenge restaurants already face in complying with inconsistent and contradictory regulations. 

With the ongoing pandemic, our state’s elected leaders should be seeking to help rather than harm our economy. The prospect of additional burdensome regulations such as those proposed by the FAST Recovery Act disincentivizes restaurateurs and franchisees from reentering the industry or expanding their business.

For the sake of the leisure and hospitality employers that serve as critical components of communities throughout the state, the Oceanside Chamber of Commerce opposes this legislation. Local residents who want our restaurant community to survive and thrive should too!

Scott Ashton is CEO of the Oceanside Chamber of Commerce