Operators must be engaged politically to fight against anti-business legislation

Nation's Restaurant News,  Jan 15, 2007  by Tom Foulkes

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While a national wave changed the makeup of Washington policy making this past election, the popular catch phrase "All politics is local" is increasingly changing the face of American enterprise--one election at a time.

Threatening legislation and electoral initiatives to mandate employee pay raises and benefits are being implemented by those that have never worked a day in the restaurant industry. These trends are a growing danger to small businesses and multiunit operators alike. Those who do not become engaged in the process may become a victim of it.

In November, ballot initiatives to raise the minimum wage passed in six states: Arizona, Colorado, Missouri, Montana, Nevada and Ohio. The initiatives were among the most aggressive wage policies ever proposed.

They were not simple one-time wage hikes, but dangerous annual increases indexed to inflation. In Colorado, Nevada and Ohio, this reckless policy was actually cemented into the state constitutions--making it extremely difficult, if not impossible, for a legislative remedy during an economic downturn. Fine print in several of these initiatives also included burdensome record-keeping provisions for all businesses and potential threats to employee privacy.

These were not homegrown efforts, but a well-coordinated effort by special interest groups to drive up turnout with an emotional issue that voters knew little about. Despite the uphill battle, many from the restaurant industry stepped up to the plate, offering political and financial support to combat these initiatives. Local coalitions were formed in each state and waged aggressive campaigns despite the limited resources.

In most cases, these campaigns made the best of their shoestring budgets. More than 40 major newspapers including The Denver Post, The Plain Dealer in Cleveland, The Arizona Republic and the Las Vegas Review-Journal all agreed that the minimum-wage ballot initiatives in their respective states were bad policy and had urged voters to reject them. In Colorado and Ohio, support dropped dramatically by more than 20 percentage points when voters there learned more about the ballot measures.

These fights are not going away. The victories in these six states have emboldened those who seek to change the way businesses operate through the local legislative and ballot initiative process. In 2006 the issue was minimum wage. In 2008, it likely will be mandated health care coverage.

The forces already are lining up to set health care ballot initiatives in motion.

What can restaurants do to defend themselves from these anti-industry efforts? Here are some ways:

Become engaged in government affairs

In addition to the 2006 election initiatives, more than half the state legislatures considered increasing their minimum wages and introduced bills that would establish some type of state-mandated, employer-funded health care program. There also has been increased activity on menu labeling, alcohol-related issues, taxes and more.

Multiunit operators that do not currently have an active government affairs program should act quickly to prepare for the increased legislative activity on minimum wage, not only at the federal level, but also increasingly at the state level.

Government relations programs saved businesses in California $160,000 per store per year by preventing a misguided, mandated health care proposal from being implemented in the state. Government relations in Washington state just repealed a syrup tax costing the state's restaurants nearly $10 million a year. Without government relations, the state legislature in Arizona could have passed a law that would require your business to forfeit its business license for six months if it unknowingly hired an illegal immigrant.

There are a variety of levels at which restaurants can become engaged in government relations. Those restaurant operators who have a dedicated program of some capacity will benefit from knowing the potential industry threats and knowing how to quickly respond.

The National Restaurant Association's state relations department has a wealth of knowledge available to members, including information available on our website as well as in-person meetings and conference calls.

Make political contributions to beat anti-business initiatives

Single-unit restaurant operators may feel powerless to act against bad policy, but as the nation's largest private sector employer, there is no better network for involvement and action. When mobilized it can be truly effective.

The Colorado wage hike campaign is a perfect case study for why more small businesses should become engaged in these fights. Voter support to raise the minimum wage through Amendment 42 started in the stratosphere and ended up neck and neck at the end because of the combination of an organized industry campaign and strong messaging. Additional money and resources from the restaurant industry and the small-business community would have likely made the difference here and in other states.