OP - The fast food worker's revolution

[mr friendly guy]

http://www.abc.net.au/news/2013-12-12/h ... on/5151504

The fast food worker's revolution
The Drum
By Ruby Hamad
Updated 3 hours 48 minutes ago


Photo: America's unskilled fast-food workers are as marginalised as it is possible to be. (Fred Prouser: Reuters) Sick of being undervalued by their employers and mocked by their compatriots, America's low-wage workers are uniting to demand fair pay and respect, writes Ruby Hamad.

As Christmas rolls inevitably towards us, thoughts turn to how we can cover the increased costs of food, presents, parties, and just generally make our pay cheques stretch that little bit further.

Fortunately for America's low-wage workforce, mega-corporations such as Walmart and McDonald's are already on to it.

Last month, a Walmart store in Ohio issued a Thanksgiving fundraising drive, urging employees to "collect canned foods for fellow Walmart employees in need." (Emphasis original).

Walmart, which was recently named America's worst-paying employer, has attempted to pass this insult off as a heart-warming example of its employees caring for one another. Which is one way of deflecting attention from the cause of those employees' lesser fortunes - Walmart's loving embrace of the $7.25 federal minimum wage.

Walmart is not alone in its sorry/not sorry approach to the fact that many of its workers live below the poverty line.

Fast-food behemoth McDonald's attracted equal amounts disbelief and scorn in its recent attempt to dispense money-saving advice to its workforce. Employees were helpfully told they could make ends meet by getting a second job, not paying for heating, and applying for food stamps. Most gratingly, McDonald's cheerfully suggested workers could simply "sing away stress" because singing lowers blood pressure.

For the record, McDonald's made a $1.5 billion profit in the US in the third quarter of 2013. Coincidentally, this is slightly higher than the $1.2 billion taxpayers shell out each year for public assistance ... for the McDonald's workforce.

Are we sensing a theme here? Corporations are making billions on the backs of their workers, and leaving other Americans to pick up the slack.

Unfazed by the public ridicule, McDonald's continued with its self-defeating advice in the form of "McResource Line", a website which includes Christmas-themed money-saving doozies such as "breaking food into pieces often results in eating less and still feeling full" and suggesting employees sell unwanted gifts on eBay for some "quick cash".

When all else fails, as it is bound to when you have to choose between feeding your kids and paying the rent, cash-strapped fast-food minions could enjoy the festive season if they "quit complaining", since complaining increases stress hormone levels.

It is precisely this tone deafness on the part of McDonald's and similar meg-corporations, as well as their brazen indifference to the poverty their poor wages impose on their employees, that is driving what increasingly appears to be a low-paid workers revolution in the United States.

It all began last November when McDonald's workers in New York walked off the job on Black Friday, the immensely popular discount shopping day after Thanksgiving.

In August of this year, New Yorkers were joined by fast food employees from other chains including Taco Bell in a mass walkout across 50 cities.

With the strikes and protests now spreading to over 100 cities, what began with dissatisfied workers in a single store has turned into a fully-fledged movement called Fight for 15, as in for a minimum wage of $15 per hour.

The protesting workers are aiming high. Critics argue that raising wages would lead to job losses, and president Barack Obama himself is hoping for an increase to just $9 per hour. But in an environment of rising food and housing costs, this still won't lift fast food workers out of poverty.

America's unskilled fast-food workers are as marginalised as it is possible to be. Undervalued by their employers and mocked by their compatriots, who seem to conflate dislike of poverty with hatred of poor people, their dreams of a living wage is hindered by a widespread belief that being low-skilled means you should just "quit complaining" and be happy to have a job, any job.

Of course, this antipathy is driven in no small part by a fear that a wage hike will drive prices up as corporations pass the costs on to consumers. However, these fears are unfounded.

In Australia, where the minimum wage is $14.50 per hour and McDonald's pays $15 per hour, consumers pay $4.62 for a Big Mac, just five cents more than Americans who buy $4.56 burgers from workers making an average of just $7.75.

Moreover, by McDonald's own admission, paying its workers $15 per hour would increase the cost of items on its famed Dollar Menu to just $1.25.

It's hard to get this point - that a living wage for all Americans is surely worth a few extra cents for takeaway food - across in the US where the insistence that everyone has equality of opportunity has tainted society to the extent that poor people are blamed entirely for their predicament. Failure to overcome being born into poverty, with its associated educational and criminal disadvantages, is widely regarded as the fault of those affected by it, not the society that allows it to happen.

After all, the thinking goes, if America is the land of opportunity and anyone can make it big, then being stuck in poverty must surely be a failure of you own character; if you are poor in the land of the free, it must be because you're just not working hard enough.

The truth is, low-wage workers do work hard, often toiling at two or three jobs, for up to 70 hours a week, subsisting on just a few hours' sleep a night. And they still struggle just to make ends meet, let alone escape the tedium and exhaustion of endless poverty.

And now, the fast food workers revolution has come full circle back to New York City where ultra-hip artisan bakery, Amy's Bread, has been charged with abusing and under-paying minimum-wage workers.

Buoyed by the rising protest movement across the country, employees have delivered a petition to the owners of Amy's Bread. Their demands? A living wage, health insurance, and - perhaps most audacious of all - respect.

Ruby Hamad is a writer and film maker. View her full profile here.

When I was growing up in th 1990s, working for Maccas was something a kid did on the side for extra cash, not a permanent career choice. Apparently from a previous thread, its not only a career choice in the US, but they are paid worse than in Australia (from the OP). Good grief.

[SirNitram]

The various groups of protesting workers are an interesting thing for me. I am wondering if they can force reforms without unions, which has some nice advantages over standard labour power usage.

[Broomstick]

When I was growing up in th 1990s, working for Maccas was something a kid did on the side for extra cash, not a permanent career choice. Apparently from a previous thread, its not only a career choice in the US, but they are paid worse than in Australia (from the OP). Good grief.

I have to object to your use of the word "choice" in this context. I don't think most people at McDonald's choose to make a career of it the way someone might choose to be a lawyer or doctor, they make a career of it due to limited opportunities to do other, more profitable things.

It used to be here, too, that McD's employed high school/college kids seeking some money, and another cohort of retirees also looking for supplemental income but now it's a "working age" people who should be in their prime earning years but are instead laboring for minimum wage.

[Magis]

The fast food worker's revolution
For the record, McDonald's made a $1.5 billion profit in the US in the third quarter of 2013. Coincidentally, this is slightly higher than the $1.2 billion taxpayers shell out each year for public assistance ... for the McDonald's workforce.

Are we sensing a theme here? Corporations are making billions on the backs of their workers, and leaving other Americans to pick up the slack.

So in other words, the author of the article has no clue at all how fast food or franchised business work. Why does that not surprise me?

McDonalds corporate makes $5+ billion/year in net earnings, mostly from rent charged to franchisees for occupying the restaurant buildings. McDonalds franchises make on average about $100,000/year at a 4% to 6% profit margin, and they are the ones who are paying the salaries. Oh, and to start up a McD's franchise takes an investment of between $1 million and $2 million. And when McDonalds corporate changes the standards for the interior designs of the restaurants, they charge that to the franchisees as well, an amount upwards of $1 million for the renovation.

McDonalds corporate squeezes their franchisees hard, over the last decade especially. The franchisees will also be the people who are hurt by this wage hike.

Can the author really be so clueless that he thinks McDonalds Corporation is paying the wages of their franchisees' employees?

[Zaune]

Point of clarification. Do the franchisees get to determine the in-store menu prices?

[Elheru Aran]

Point of clarification. Do the franchisees get to determine the in-store menu prices?

I cannot say for McDo's, but I worked at two different Taco Bells 2006-10. The first one was owned by a franchise that ran the local TB's throughout east and south Georgia; the other in TN was run by the corporation itself, I believe. In both cases menu prices were pretty consistent with what local prices for fast food were, and I suspect TB's parent corporation (YUM Foods) probably has regional guidelines for this kind of thing. Individual restaurants don't really get much liberty to vary prices; franchisees may hike prices but it's a gamble. The one in Tennessee definitely followed the prices that were suggested in the marketing material we received each month.

Some things have to be very consistent between any restaurant, franchise or corporation owned, such as the 'dollar menu'-- if there's any change in price on those, people will notice. It's the high-ticket items such as new dishes or drinks that they'll raise prices on.

From a personal perspective, I was actually paid slightly more than the minimum wage-- I started at $7.75? in Georgia and went all the way up to 8.75 before I left for Home Depot. That said, I was fully aware how much it sucked, especially once I started going on health insurance. When I was living at home (Georgia) it wasn't that much of a burden-- it paid for gas and I could save up a good bit-- but in TN, renting a place, buying all my own food, eventually health insurance? I was pretty much perpetually broke, and that was before I even got married. This is working ~35 hours a week, btw, so I wasn't part time.

Funny thing, working at Taco Bell and my wife being a cashier at Walgreens, we were actually slightly better off than where we are now... but anyway.

[Replicant]

Devil's advocate question

How much should unskilled laborers be paid?

[Thanas]

Enough that they can pay rent, health insurance, retirement plan, a vehicle and provide for their kids education and go on vacation one time in five years.

That would be a good starting point.

[Replicant]

Enough that they can pay rent, health insurance, retirement plan, a vehicle and provide for their kids education and go on vacation one time in five years.

That would be a good starting point.

Ok, now put a number on that.

[Thanas]

Enough that they can pay rent, health insurance, retirement plan, a vehicle and provide for their kids education and go on vacation one time in five years.

That would be a good starting point.

Ok, now put a number on that.

I will as soon as you show me the cost of living for all those things in the USA.

[Zaune]

In the meantime, does US$15 an hour seem like a reasonable ballpark figure?

[Replicant]

What kind of education? How many kids? Should we assume two kids as an average?

Do you want a pay scale that assumes two earners? Because you will have very different requirements if you want unskilled labor to be paid enough that single parents can do everything you want vs basing it around married couples.

[Kuja]

Let me do some quick napkin math for the cost of, say, a single guy living in a one-bedroom apartment, like I was some years ago.

Let's say your rent is $650. It might be higher in some areas of the US, it might be lower in others, but that's close to what I was paying. Good news is water and power is included in that.

Assume we have a full time job and thus don't have to pay out of pocket for health insurance.

Pricing for internet in the US is wonky so I'll just use an old bill and match it. That's $40 a month.

The average monthly cell phone user's bill was 71 bucks last year. Let's say ours is 70 because I like zeroes.

No cable for now.

Let's budget $120 a month for gas. For my G6 that's about three tankfulls where I live.

On the subject of the car, you'd better have insurance. I have a kickass plan right now, but not everyone has as good a driving record as I do. Let's put it at $80 a month.

Food? Yeah, food would be good. Let's budget, say, about 50 bucks a week for food, or $200 a month.

Adding that all up, on a month to month basis you're looking at:

650+40+70+120+80+200 = $1160 as a rough monthly budget.

Now, like I said, we have a full-time job. At 40 hours a week, 4 weeks per month (you'd better not miss a day, bro...) a $1160 budget demands...a wage of $7.25, or the Federal minimum wage. Well, how about that. I didn't even plan that.

Of course, this budget does not include potential for any of the following: co-pay on any medical bills (or serious medical bills), car purchase, house purchase, repair (to home or car) purchase, saving for retirement, 'just in case' saving for emergencies, clothing (hope you like the thrift shop), any non-paid-off leisure time, a marriage license, any paying for anything if you have a kid, any out-of-pocket expenses, luxuries like satellite tv or video games (or anything else).

Of course, if you work part-time (or even anything less than 40 hours a week), you can say goodbye to a big chunk of that income, meaning it's time to get a roommate in your one-bedroom place or start enjoying life on the street.

Federal minimum wage sucks.

[Broomstick]

Ok, now put a number on that.

I will as soon as you show me the cost of living for all those things in the USA.

Meaningless question - the cost of living varies enormously across the US. It's like asking "what's the cost of living in Europe". Well, are you talking about rural Bulgaria or Berlin or London?

That's actually why the Federal minimum wage is a floor and the States can set their own limits higher, to account for regional differences.

I'm going to guess, and an Official Poor Person in AmericaTM that even in the lowest cost areas a "living wage" that would meet such requirements would be at least $10/hour, and considerably higher than that in places like New York City.

[Replicant]

Nice answer, and in a way you have shown part of the problem. Your minimum standard of living included high speed internet and a cellphone. I am not saying they shouldn't be there but one can live without both.

Your number does show that there is no way your supporting children on that. Even a two earner family would be hard pressed though they get some benefit as a larger two or three bedroom apt will not cost twice as much as a one bedroom.

[Elheru Aran]

Devil's advocate question

How much should unskilled laborers be paid?

Regardless of skill level, they should be paid a living wage, defined as enough to cover the average person's bills (including health insurance) and supply them with food. That is a bare minimum. If they have a family and their spouse does not work (whatever the reason), then it should be higher.

$15 would be lovely, indeed not quite enough in some areas, but $10 would meet needs in other areas and $13 might do it elsewhere. I don't think you can use the whole US as a ballpark, given that there are some fairly dramatic differences between areas that would skew the averages. Better to pick a 'typical' area such as, say, Atlanta and roll with it as an example. New York is too expensive; the farm town of Nowhere, Ohio would be too cheap (apologies if there is actually a Nowhere, Ohio).

And don't forget that even a higher minimum wage is no good if you don't get enough hours to take advantage of that extra pay. I would think that perhaps some regulation of working hours is necessary for companies-- for example, say that all fast-food employees must have a minimum of 15 hours a week or something like that.

This would be a little more sticky than simply raising the minimum wage, but raising a minimum wage does lead to companies pulling shenanigans like making 20 people do in two hours the work of six people in eight hours. 20x2=40, 6x8=48. Not only do they save eight hours' worth of pay (assuming they are all paid the same), the 20 people are part-time (barely even that) versus full time for the 6, so they are not obligated to provide benefits (this varies per state).

[Elheru Aran]

Nice answer, and in a way you have shown part of the problem. Your minimum standard of living included high speed internet and a cellphone. I am not saying they shouldn't be there but one can live without both.

Sure, one can live without both. One can also live without indoor plumbing. It's not much fun.

Not that 'fun' is the point, though. I will grant you the high speed Internet-- IF a library is easily accessible, dial up is still available in your area (it's largely vanished unless you really hunt or are in one of the more country areas), and you're good at job-hunting via newspaper. Otherwise, it's much easier to obtain Internet via one of the common providers; $40 is pretty average, 50 might be closer now though. Also, definitions of 'high speed' will differ. Basic Internet these days is quite sufficient for most purposes.

Cell phone, though, I will defend as somewhat of a necessity. Hardly anybody uses a land-line phone anymore, and a basic cell phone is far more useful and flexible than the old home phones. Usually the only reason anybody has a home phone anymore is it was bundled with their Internet, or they're technologically behind the curve (senior citizens, mainly). Job-hunting sucks if you have to wait by a fixed phone especially if it would cost the same as a cell phone anyway; there are $20 cell phones out there if you go pay-and-play and use your minutes wisely.

Oh, and education is also an irrelevant metric; whether or not you have a Ph.D. or I.R.Dum. degrees should not determine whether or not you receive a wage you can feed and house yourself with. It's relevant if you want a wage greater than that, but otherwise, no. High school/GED education should be considered the minimum metric with an exception for working minors who are still in high school.

[Knife]

Ok, now put a number on that.

OK, quick google fu:

Average rent in the US is $736 (US census).

Average health care costs in the US is more complicated, according to the US census,average amount spent on a 25 to 34 year old was $1805, $1083 of which was on health insurance and the balance on medical services and drugs. 35-44 year old averages were $2520, in which $1436 was the actual money spent on health insurance. So forth and so on unti 75 and older which was $4779, $3011 on insurance. So average out the two to get all the peeps 25-44 (a significant amount of the working population) you get $1259.5.

Retirement plan. Well, what is basic? The old adage of save 10%? More or less? This one is subjective so we'll wait till the end.

Car. Various USA reports, new cars average 30k, used average is 15K. More importantly is the yearly cost of maintenance and gas. According to Consumer reports, a low end car can cost on average over the length of 5 years, as low as 5K a year for small cars. It goes up from there. http://www.consumerreports.org/cro/2012 ... /index.htm

College fund. Similar to the savings I would guess. Local state school is reporting a little over 4k a year, so 16K total. Better schools will obviously want more but here is a start at a local university. 16K over what 18 years to save for? You need to save/create a little over a grand a year, so lets just be simple and say $100 bucks. Yeah, yeah, compound interest. Fine, $50 a month for kid's college.

Vacation. ABC news suggests it's $1180 per person. http://abcnews.go.com/Travel/vacation-1 ... d=16509865 so the every happy 2.2 person house hold would spend $2596 every five years, or $519 bucks a year.

So. $736 x12= $8832 a year in rent.
$1259 a year in health insurance.
$5000 a year for car.
$50x 12= $600 a year saved for college.
sub total: $15691
10% savings $1569

total $17260

Those making $23,492 a year for a family of four, or $11,720 for an individual were considered to be living in poverty. According to a report on Mother Jones, the average fast food worker makes $8.89/hour. http://www.motherjones.com/politics/201 ... comparison

$8.89x40 hours a week =$355.6 a week x52 weeks a year= $18491

It's over the amount? Yay, those lovely people get $1231 a year to buy food, clothes, and pay utilities. A whole hundred bucks a month to buy food. Woot. Oh and I didn't even put in taxes in there. Lop 15% off of the total, or $2773 a year in income taxes. 18491-2772= $15719 a year. Damn now they can't buy food and are 2k short on the above criteria.

At $8.89 an hour, you are in poverty. You can't possible afford any of the criteria above without going without food or other essentials not listed. $15/hour may or may not be too much depending on the exact location and the exact cost of living in that area, but $9/hour plainly isn't.

Disclaimer: This isn't intended to be an exhausive analysis of the situation, rather a 15 minute google fu on the situation. Plenty of other factors are not accounted for thus decreasing the amount of usable income for the above criteria.

[Kuja]

Thanks Knife.

[Thanas]

Ok, now put a number on that.

I will as soon as you show me the cost of living for all those things in the USA.

Meaningless question - the cost of living varies enormously across the US. It's like asking "what's the cost of living in Europe". Well, are you talking about rural Bulgaria or Berlin or London?

I knew that. Replicant does not or he would not have asked such a stupid question. I wanted to get him to actually research the issue at hand. Thanks for ruining that plan now.

[ZOmegaZ]

You know, I've heard that some places have considered (or implemented?) a law that ties the maximum wages paid by a company to the minimum wages paid by that company. Like, CEO can only make 20x what the lowest-paid worker can make, or perhaps the median worker. I've wondered how a system like that would work in practice at something like McDonald's.

[Elheru Aran]

Problem with McDonald's and other companies that run on a largely franchised basis is that there's too much of a gap between the CEO and Joe Team Member. It can be safely argued that the CEO's job is far more than what the average team member does; running a corporation is a very different job from putting together a burger. Not to mention that the great majority of franchises would differ on how much they pay employees anyway; the executives could argue that because the franchises regulate themselves in that respect, the corporation is not responsible for that, and as such the 'middle management' is suddenly the base worker in the actual corporation itself!

[Beowulf]

There's all kinds of shenanigans you can play. Separate the company into different operating companies, where the actual guy in charge is in the highest OpCo, and the low paid workers are in a different one. Meanwhile, the company that owns all of the OpCos has no actual employees, just a board of directors.

[Napoleon the Clown]

Nice answer, and in a way you have shown part of the problem. Your minimum standard of living included high speed internet and a cellphone. I am not saying they shouldn't be there but one can live without both.

Your number does show that there is no way your supporting children on that. Even a two earner family would be hard pressed though they get some benefit as a larger two or three bedroom apt will not cost twice as much as a one bedroom.

Good luck getting a job with no phone and thus no way for prospective employers to contact you.

[Johonebesus]

...
It can be safely argued that the CEO's job is far more than what the average team member does; running a corporation is a very different job from putting together a burger.
...

More what? That is a matter that very much annoys me. There is this assumption that working in an office is obviously harder than working in service, but how many CEO's would be able to stand on their feet eight or ten hours a day running back and forth dealing with customers and managers constantly saying hurry, faster, get it out now. Service work is hard. Even back at the library I would have been willing to take a pay cut to be able to sit in an office and deal with papers and computers and other professionals instead of the public. Maybe a white collar job requires more contemplation and complex decision making than running at McDonald's, but the latter is much more demanding physically, and probably has more constant stress.