November 2013

Some local chains show a better way–and it’s good for business, too.

By gollies, McDonald’s cares. Despite being a corporate behemoth (more than 14,000 stores in the US, $27 billion a year in sales, $5.5 billion in profits and 860,000 employees), the world’s biggest burger chain has shown that it has a heart.

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Earlier this year, the McChieftains high atop the hierarchy declared that they feel the pain of front-line and fry-line workers at the bottom who’re struggling to make ends meet on the $8.25 an hour they’re typically paid. That’s about $17,500 a year–gross–for full-time work (though most who toil under the golden arches are held well short of 40 hours a week, further shrinking their paychecks).

You could almost see tears welling in the eyes of top executives as they conceded that this is poverty pay, leaving those who prep and serve “Happy Meals” for millions of children unable to cover the cost of their own meals and other basics.

So, imagine the joy of crew members (McDonald’s congenial moniker for “workers”) when word spread down the ranks that the bosses were going to give a financial boost to each of them. At last, a raise!

Ha! A raise for mere workers? Get real. Instead of money, they were given a website. It was like getting socks for Christmas, but not as warm and fuzzy. Actually it was more like getting socked, for the website blames employees themselves for not making ends meet on their meager wages, implying that they’re ignoramuses and wastrels who just don’t manage their paychecks properly. Each worker needs “to become a better decision-maker,” scolds www.PracticalMoneySkills.com. The site instructs them to “spend and save wisely,” laying out a day-by-day, item-by-item, budgeting regimen for them.

Wait a second–save? On eight-and-a-quarter an hour?

But the site is not only clueless and condescending, it’s also a hoot! For example, in the initial “sample monthly budget (PDF)” proposed by the McScrooges, no spending was allocated for one of life’s basic needs: Eating. Good grief, they’re in the feeding business, yet they failed to budget for meals! They also included zero money for other real life essentials, including child care and clothing, while proposing impossibly low spending on such basics as health coverage, which was fancifully budgeted at $20 per month (perhaps that’s to cover cab fare to the emergency room).

"The issue isn't just jobs. Even slaves had jobs. The issue is wages." --Jim Hightower


Even with such ludicrous shorting of expenses, McDonald’s income-outgo figures don’t balance. Its budget allocates $1,310 a month in expenses, and another $750 for un-itemized expenditures (presumably including savings), for a grand tally of $2,060 each month. But, hello–McDonald’s doesn’t pay anywhere near that. Indeed, the online computations set a mere $1,105 as a crew member’s monthly take-home, so where would the other $955 come from? Aha, there it is, on line two of the McMagic budget, listed as: “Income (2nd job).”

So there you have it. The Burger-Behemoth-with-a-Heart-of-Gold does pay a living wage to every one of its workers–assuming they can find a second job and can work it into their schedule, and assuming that taxpayers will keep subsidizing the corporation’s bottom line by providing food stamps, emergency-room health care, and other government benefits for its low-wage workforce.

 

The fast-food workers are fighting for all of us. —-Mary Kay Henry, President Service Employees International Union

Food fight!

McDonald’s is hardly alone in running this flimflam, nor is the caper unique to fast food chains, or even to the broader retail sector (Walmart being the pioneer of such outright corporate thievery). Rather, this is the Brave New Future of work that Corporate America is rapidly imposing throughout the economy. From computer barons to college administrators, manufacturing bosses to media executives–a cold, calculatedly mean, self-enriching, ultra-profitable model has taken hold. Workers (including credentialed professionals) are no longer considered human assets to be nurtured, but as line-item costs to be disempowered, manipulated, and (by all means) cut.

What our country’s workaday majority is presently experiencing is not some natural economic cycle (a “lagging jobs recovery” as corporate apologists disingenuously term it), but a deliberate, deeply immoral push by a moneyed and powerful elite to entrench widespread inequality as an acceptable social order in this phenomenally wealthy nation. While lashing us with the demand for greater adherence to the work ethic, they are stripping even the most basic ethics out of the workplace. As a New York Times editorial succinctly put it in August, “Americans are increasingly unable to make a living at their jobs. They work harder and are paid less than workers in other advanced countries. And their wages have stagnated even as executive pay has soared.”

In the United States of By-God America, there is no excuse for low-wage/no-respect jobs. Yet the Powers That Be are spreading that insidious devaluation of work way up the middle-class ladder. With job creation moribund, a mass of good applicants swarming even the poorest of job openings, and both private and public employers constantly shedding workers, anyone who’s employed is deemed to be “lucky.” The corporate assumption, then, is that the risk of being fired is so intimidating that employees won’t challenge bosses on workplace conditions or compensation, so bad jobs will be embraced as the new normal. After all, what can people do about it?

That’s why cocksure bosses have been stunned by the ongoing rebellion of restaurant workers against their employers. Especially shocking to the elites is that the revolt is so widespread, rumbling through more than 60 cities from NYC to LA, but also rattling the status quo in such unexpected locales as Aurora, (IL), Charlotte, (NC), Dallas,(TX), Gretna (LA), Memphis (TN), Peoria (IL), Phoenix (AZ), San Diego (CA), Topeka, (KS), and Wilmington (DE). This summer’s daring series of rolling, one-day walkouts by order-takers, cooks, dishwashers, and others at peak mealtimes was momentous, spurring them to continue organizing, strategizing, and mobilizing.

But their gutsy action is reaching way beyond one industry, The fact that thousands of “lowly” workers are publicly protesting the deplorable low-wage ethic of fast-food giants (as well as such full-service chains as Olive Garden and Red Lobster), is politically explosive, for it changes people’s assumptions about what is possible. Here is a large group of very low-paid, previously voiceless, and politically powerless people who’ve been practically invisible, suddenly rising up and taking their plight to the streets, getting right in the face of brand-name corporate powerhouses. If they can do it, why can’t others?

That thought is causing a raging epidemic of hives in corporate boardrooms. Not only did these lowly ones do it and get away with it, but the larger public of once-upon-a-time middle-class families identifies with them and admires their spunk. The revolt against restaurant mega-chains is even getting surprisingly positive media coverage (which might reflect the long-simmering resentment by reporters and editors over the relentless downsizing of newsrooms by media chains).

Note, too, that in city after city, food workers are not acting alone–local clergy, officeholders, women’s advocates, students, civil rights and union leaders, just plain customers, and others are on their side. After each protest, march, or rally, community supporters go a step further, walking the workers back into their restaurants, making clear to managers that the community expects zero retaliation against them.

Just as the 2011 eruption of the Occupy Wall Street movement has legitimized inequality as a central issue in American politics, this year’s food workers rebellion has taken that simmering issue a step further by framing the inequality more specifically, personalizing it, and making tangible demands for redress.

The restaurant workers’ core demand is everyone’s demand: Basic fairness. In particular, employees are mobilizing for decent pay ($15 an hour), health care, the right to organize unions without retaliation, a predictable work schedule, such sensible benefits as paid sick days and vacations, and the possibility of promotions. They spell it out in one bold word: R.E.S.P.E.C.T.

These challengers of today’s entrenched low-wage order certainly didn’t pick an easy fight. They are storming the bastions of more than a score of our country’s best-fortified corporate baronies, each with a ubiquitous, nationwide presence. Fast food is a $200 billion-a-year industry and one of America’s largest employers, with more than four million workers.

It is also a political Goliath, beginning with the fact that its roughly 200,000 plasticized outlets are strewn across every city, suburb, town, and (most significantly) congressional district. These swaggering brand-names are not hesitant to use their massive advertising budgets, armies of lobbyists,SWAT teams of union-busting lawyers, various secretive front groups (from ALEC to the US Chamber of Commerce), and their practically bottomless cache of political cash to bend our local, state, and national governments to their will.

Yet, like Goliath, the giants are vulnerable–and therein lies the story.

Shameful disparity

The chains brag that the warmed-over BurgerPizzaTacoFishChicken delight they serve up in a jiffy is not only “fast,” but also cheap. But the “cheapness” built into a $3.80 Big Mac comes from the fat helping of profit McDonald’s extracts by ripping off those who prepare and serve it. A 2012 study by the National Employment Law Project (PDF) shows that seven of the 12 largest proponents of poorly paid workers in our economy are restaurant chains:

  • The median pay for front-line fast food workers is $8.94 an hour (at McDonald’s, cashiers average $7.74 an hour, grill cooks $7.72, fry cooks $8.20, crew trainers $8.14, swing managers $9.33, and even assistant store managers average only $14.22).
  • 87 percent of workers of workers receive no health benefits.
  • 52 percent of employees’ families rely on such public safety net programs as food stamps (SNAP), Medicaid, SSI, and SSDI
  • Only 28 percent of workers have full-time, 40-hour-a-week jobs. Fast food workers average only 24 hours a week, adding up to barely $11,000 a year in gross pay.
  • Contrary to industry myth, only 17 percent of workers are teenagers; the median age is 28; most are women; and more than a quarter of workers have at least one child.

Meet two of McDonald’s workers who’re paid between $8.25 and $8.75: First is Tyree Johnson, 44, from Chicago. He gets the Illinois minimum wage of $8.25 an hour and is trying to piece together a living as a cook in two McDonald’s stores. Even doubling up, he’s not given enough hours to have full-time work. Johnson has been bounced around six different locations, and with each transfer, he says, “they lower your pay [to minimum wage]. You have to climb back up.”

Everybody does better when everybody does better.

Wear it like you mean it.
T’s, totes, mugs, and more in the Lowdown store.

Customers don’t feel it, but Johnson points out that it’s “super hot” back in the grill and fry area, where he not only sweats, but he also gets coated in grease. Since cleanliness is a factor in pay reviews, he scrubs down with soap and applies toiletries in a McDonald’s restroom before jumping on the El train to get to his second shift. “I hate it when my boss tells me she won’t give me a raise because she can smell me,” Johnson says.

Then there’s Jim Skinner, who was paid $8.75 in 2011. Oh, make that $8.75 million. He was CEO until he retired last year. At departure, Skinner wasn’t given a bar of soap and a sniff test, but an extra $10 million for his golden years, plus continued use of the corporate jet. Part of this generosity was due to his push in Congress and six states to kill increases in the minimum wage, which would have helped people like Tyree.

Also, McD’s new CEO, Don Thompson, is getting a $13.8 million pay package, including use of a corporate jet for personal use, free physical exams, finan-cial counseling, and a security detail. In an excellent article, Bloomberg reporter Leslie Patton reveals that Thompson paid $3.3 million in September to buy two condos high atop the toney Trump Tower on Chicago’s riverfront. She adds poignantly that Tyree Johnson is able to look up and see the chief’s swell new digs as he rides the El from one McDonald’s job to the other.

Thanks for nothing

The depth of this industry’s moral emptiness was demonstrated last year when McDonald’s hierarchs decided to stay open on Thanksgiving and Christmas. Bad enough that this stole important family time from thousands of employees–but the corporate chiefs (who did not have to work these holidays) decided to go full-Scrooge by decreeing that there would be no overtime pay. It’s okay, the bosses rationalized, because “the staff voluntarily signed up to work.” Yeah, volunteer–or else!

By staying open on the two holidays and stiffing its workforce, McDonald’s banked an estimated $36 million in added revenue–a pittance for a corporation with $27 billion in sales last year. But no level of grubbing for an extra dollar is beneath fast food executives. I think their ethic is what Pope Francis was referring to this May when he declared: “The worship of the golden calf of old has found a new heartless image in the cult of money and dictatorship of an economy which is faceless and lacking any truly human goal.”

Meanwhile, as the barons wail to lawmakers across the country that the chains simply cannot afford to do better by those who do the work, they simultaneously brag to Wall Street that they’re awash in profits and cash. Last year, McDonald’s ramrods did more than brag–they disbursed $6 billion to repurchase piles of the corporation’s stock and pay dividends to shareholders. Both moves (which could have totaled more than $14,000 in added pay for each of its restaurant workers) overwhelmingly benefitted the largest investors, a privileged group that prominently includes CEO Thompson and previous-CEO Skinner. While forcefully holding down wages, McDonald’s has rewarded shareholders with dividend payouts every year since 1976.

Income disparity is flagrant in FastFoodLand, with CEO’s being richly rewarded for their miserliness. A “crew member” in the Dunkin’ Donuts chain, for example, averages a slim $7.86 an hour, while the dunker-in-chief’s $1.9 million paycheck works out to about $950 an hour. Papa John’s pays a pathetic $7.18 an hour to “team members,” while the Big Papa draws $1,600 an hour. And that delivery driver who brings a Domino’s pizza to you gets only $6.82 an hour, while the ace domino rakes in $4,500 an hour.

The industry’s enforcer.

The NRA (not the gun diehards, the National Restaurant Association) is the chief lobbying front for perpetuating the predatory wage business model. With a $30 million yearly budget, 750 employees, and 41 lobbyists on payroll (30 of whom were previously public officials), NRA speaks loudly and carries a big whacking stick. It touts a membership of 52,000 restaurants, but most are tag-along mom & pop stores, while the big chains provide the bulk of its money, drive its agenda, and give it big league clout.

Unsurprisingly, NRA is ferociously anti-worker, right-wing, and Republican (remember that it was once led by that off-the-wall bubble-head, Herman Cain). In June, NRA bragged that of 29 proposals introduced in state legislatures this year for minimum-wage hikes, its lobbyists killed 27. Even in Connecticut and New York, which raised their minimums, NRA lobbyists cut backroom deals to deny any increase in the “tipped wage”–a special (and especially low) sub-minimum wage created for restaurant waitstaff, bartenders, and others who’re paid gratuities by customers. The federal minimum for tip-earning workers has been stuck at an ultra-miserly $2.13 an hour since 1991. As a result, tip earners have a poverty rate triple that of the overall workforce.

In the past year and a half, NRA has spent nearly $4 million lobbying against any proposal to provide better pay, benefits, and conditions for hard-hit workers, including battling against health care for the uninsured, flex-time provisions for those with children, equal pay for women, paid sick days to let food handlers stay home when ill, and even anti-discrimination laws. It defeats these by poor-mouthing the chains’ financial condition, warning lawmakers that even a dime’s increase in worker costs would force the poor giants to raise their menu prices.

“America the… what?”

Behind the fast food industry’s cheery ads and cartoonish facades, there’s an ugly reality of widespread employee exploitation: Wage theft, manipulation of hours and schedules, unsafe working conditions, racial discrimination, flagrant violations of basic rights, and the demeaning and abusive treatment of fellow human beings. These are the practices of thugs–and they make a travesty of America’s most fundamental values: Fairness, Justice, and Equal Opportunity for ALL.

This is no way to run a business. Much less an economy. And certainly not a society.

Today’s “cult of money” running roughshod over your employees is not only shameful, but also, well… stupid. Why knock down, piss off, and demoralize the people who are the public face of your business?

There is a better way. Look around where you live. Chances are a local or regional restaurant chain is proving that fairness is not the enemy of profit, and in fact, is a profit booster. In my town of Austin, for example, a local chain that owns Rudy’s Barbeque and Mighty Fine Burgers has a total of eight outlets and 500 employees. Rather than the how-low-can-you-go model, the owners view employees as long-term assets. Servers start at $10 an hour, cooks make $15, and all who work 30 hours or more per week are covered by health, life, and prescription drug insurance that is 90 percent paid for by the company. “It’s simply the right thing to do,” says owner Ken Schiller. And, he adds, it’s good for business: “We want the very best people, and this is how we get them, [which] helps us minimize turnover.”

Likewise, the Boloco chain based in Boston starts workers at $9 to $11 an hour and moves them up, providing good training and developing good morale, which makes for a much happier customer experience. Boloco serves organic and humanely raised food, but, asks the CEO, “What about paying [workers] to come in and have high quality lives just like we want the cows to have?”

And, in the Detroit area, the Moo Cluck Moo fast-food chain opened in April and is already profitable, while paying $15 an hour–the very wage sought by the national worker’s movement. An NPR reporter inquired whether owner Brian Parker had considered automating his outlets, replacing decently paid employees with robots. Parker was stunned: “With robots?” he asked. The service industry, he pointed out, is “all about the customer experience. And I don’t think I’ve ever had a good experience in front of a vending machine. It all boils down to the human element.”

We are what we eat

Ultimately, restoring human values to the restaurant industry is not just the job of vulnerable workers, but the shared responsibility of the people that big chains and other bad actors fear most: Customers. In this fight for justice, boycotts don’t work, because it’s the workers that get hurt. The effective way to go is direct action by individual customers–but, better yet, by groups of customers and community leaders.

Just as you might question what’s in the meal you’re served, start questioning what values restaurants in your area are serving up. Talk (nicely) to managers, but also talk to the workers. Laud and support good places, and call out the bad ones. Of course, talk to everyone from city council members to congress critters about their responsibility for workplace fairness. For guidelines, information, and action, consult our “Do Something” section of this issue.


Do Something!

Several excellent grassroots groups, largely made up of restaurant workers, are the leaders of this revolt against low wages, and they have a wealth of facts, stories, and ways to help.

 

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