Which candidate will get the votes of the industry? The situation may not be as clear as it once was. | Photo: Shutterstock
Welcome to Government Watch, a weekly Restaurant Business column focusing on policy, regulation, legislation and other government issues relevant to the restaurant industry. This week’s edition looks at the industry’s sympathies in the U.S. presidential race, as well as the ongoing crackdown on operators who have attempted to defraud the federal government’s pandemic relief programs. There’s also a look at California legislation that could lead to restrictions on the use of self-service technology in restaurants.
With the presidential election now in its final stages, restaurateurs are considering which candidate and party will get their votes in November. Evidence suggests the industry may be as divided on the issue as the nation at large.
In a test vote conducted in April during the National Restaurant Association’s Public Affairs Conference, restaurant owners said they would vote for Donald Trump over his Democratic rival by a 2-to-1 margin, a strength of support that surprised even the association’s government affairs team.
Back then, however, the choice was still between Trump and Biden. Now, as 59-year-old Kamala Harris takes over the Democratic flag from 81-year-old Biden, the industry seems even more divided.
Next week, for example, 21 of the industry’s most prominent chefs will host an event in support of Harris and her vice president, Tim Walz. The list of attendees reads like that of the presenters at the James Beard Awards: Tom Colicchio, Carla Hall, Jonathan Waxman, Susan Feniger, Suzanne Goin, April Bloomfield, Art Smith, to name a few. The title is “Cooking for Kamala.”
Many have participated in the YouTube series “Cooking with Kamala,” where they collaborated with the vice president and prepared some of their favorite dishes, ranging from a canned tuna sandwich to a masala dosa they co-made with TV star Mindy Kaling. During the sessions, Harris speaks with Jose Andres about Native American rights and the challenges of running a small business, as well as the challenges of cooking with tofu.
Next Thursday, the chefs will hold a video conference in which they will prepare some of these specialties and, during the live commentary, will probably explain to viewers why the industry’s celebrities want to vote for Harris and Walz.
The notion that Harris worked at McDonald’s in her youth, as did her husband, Doug Emhoff, is also becoming increasingly common, a clear attempt to portray the Democratic candidate as someone familiar with the rigors of a roll-up-your-sleeves job.
Meanwhile, Harris and Trump continue to court the favor of the millions of voters who work in the restaurant industry by promising to stop the federal government from taxing the tips of waiters and bartenders. The only concern directly related to the restaurant industry is shared by both candidates, so this issue is not a point of contention.
Why restaurants should keep an eye on California’s retail technology bill
The two Oval Office contenders had originally promised to stop taxing tips during appearances before audiences in Las Vegas, a city where many restaurant workers are tipped. One of the unions representing the gambling mecca’s restaurant workers broke new ground last year by building protections against technological change into its contracts. The provisions included requiring employers to give workers six months’ notice before introducing technologies that would eliminate jobs and giving human employees the opportunity to influence how labor-saving digital systems are used.
Now, a similar movement is emerging in California that would give workers more agency when threatened by technology. The state Senate has approved SB 1446, a bill that would require retailers to meet certain obligations to their workers when they switch to self-checkout.
For example, for every two self-service checkouts, there must be at least one human employee available to help customers. And any customer who would rather be served by a human must be given that opportunity.
A key rule is that employees potentially affected by the installation must be informed of the change at least 60 days in advance.
The bill currently requires these measures only from supermarkets and drugstores. But the dynamic that led to the proposed protections for retail workers is also evident in the restaurant industry, where self-service kiosks are now commonplace. In fact, California’s $20 minimum wage for fast-food workers has led many restaurant operators to switch to self-service checkouts to keep labor costs under control.
If California’s fast-food industry were as heavily unionized as the supermarket industry, restaurants might not be excluded from the Senate bill. Restaurant operators should wonder how long this benevolent oversight would last if the state Assembly approved the bill and sent it to the state’s pro-union governor for passage.
Pandemic crooks still get their just punishment
The pandemic officially ended in May 2023, but restaurateurs who tried to defraud the nation during the crisis are learning that the legal system neither forgets nor forgives their wrongdoings. Last week, for example, Salt Lake City restaurateur Giuseppe Mirenda was sentenced to a year and a day in prison and a $250,000 fine for defrauding the federal government of nearly $2 million in disaster loans.
The loans were made through a program designed to help small businesses get back on their feet after being slowed down by the shutdown of society. Mirenda, 29, applied for six loans in three months in 2020, apparently misrepresenting the facts to support his cause. He would have received nearly half a million dollars more if his additional applications had not been rejected.
It’s not clear if he spent any of the money on his five restaurants, all of which are in Utah. About $1.1 million was used to buy homes in West Jordan, Utah and Las Vegas, and other proceeds went toward purchasing a BMW and a Jaguar.
The U.S. Attorney for Utah said Mirenda repaid $680,000 of the funds he received and the two homes he purchased were seized by the government and sold for about $1.3 million.
In addition to her prison sentence and a quarter-million dollar fine, Mirenda must serve three years of probation.
Another initiative to abolish the tip credit is rejected
The restaurant industry continues to fight back against efforts to eliminate the tip credit in a specific county through a referendum. The most recent success came in Portland, Maine, where proposals were circulating to let voters decide in November whether to raise the state’s minimum wage to $20 an hour and gradually eliminate the tip credit.
After intense lobbying by restaurant servers and their employers, Portland City Council voted this week to reserve the initiative’s proposals for further review, essentially taking them off the table for now. Among the arguments city councilors heard was that residents voted against eliminating the tip credit just two years ago, after the state enacted a ban and then reversed it a few years earlier under pressure from servers. How many no-nos were necessary?
In light of the events in Portland, only voters in Massachusetts are currently scheduled to vote on retaining the tip credit.
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