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When governments insert themselves into business and unlevel the playing field, consumers ultimately suffer the consequences.
By Jeff Hanscom
A full half of the states are controlled by Republican governors alongside Republican legislatures. Compare to that the five states that enjoy the same control from the Democratic side and you can see how successful the Republican Party has been at state-level elections. However, peel the onion back one more layer and the picture starts to become a little less clear. The Republican Party is having a more and more difficult time translating its state and national-level victories to big city politics. Of the nation’s largest cities, only a handful are currently under Republican mayoral control. The reasons behind this “blue dots in red states” phenomenon are many, but some include recent influxes of younger and more diverse populations in cities and those groups tend to be more liberal in their political leanings, coupled with progressive organizations focusing efforts on the larger cities such as New York, Los Angeles and San Francisco.
The same thing that makes the state legislative arena so interesting at times — that each one is different and has its own set of challenges — is the same issue that makes keeping all of the local ordinances and proposals under control. Certain states have preemption laws in place specifically prohibiting cities from passing legislation in certain areas such as wage or employment. On the flip side, other states’ laws are silent on the subject, while still a third category allow cities to legislate certain areas, but not others. In short, it is the true definition of a hodge-podge.
There have already been a number of initiatives favored by the left enacted at the local and municipal level, namely increases to the minimum wage (some being discriminatory to franchisees), predictive scheduling, paid sick leave and others. With an eye toward 2017 and beyond, this trend appears ripe to continue. Some of the ‘blue dots’ that come specifically to mind that will be worth keeping close tabs on are:
- New York City
- San Francisco
- Seattle
- Minneapolis
- Philadelphia
- Los Angeles
- Chicago
The issues of concern for the franchise community at the city level range from predictive scheduling to minimum wage to zoning and everything in between. Of these, predictive scheduling will be at the tip of the spear in 2017. With Seattle having recently joined the list of cities with a scheduling law on the books, as Mayor Ed Murray signed the bill late last year, New York City has now jumped into the fray as of early December. The city council introduced a package of bills covering scheduling, but also going steps further to allow for payroll deductions for quick service restaurant workers to quasi-union groups.
Any of the issues become even more problematic for franchises when the bills are written in a way so that their application disproportionately impacts franchised businesses over non-franchised businesses, such as the Seattle minimum wage law and the scheduling laws in Seattle and San Francisco. Once again, New York City is aiming to take it one step further than both Seattle and San Francisco and only apply its scheduling ordinance to a specific sector of the franchise model, in this case, the quick service restaurant sector. When governments insert themselves into business and unlevel the playing field, it’s the consumers who ultimately suffer the consequences.
As with the federal and state levels, IFA is aggressively opposing local ordinances discriminating against franchised businesses. IFA continues to partner with local organizations and recruit local franchisees to help tell the story, but make no mistake, it is an uphill battle, and certainly one that will keep me and the entire franchise community on its toes in the months and years to come.
Jeff Hanscom is Senior Director of State Government Relations & Public Policy for the International Franchise Association.