Fast Food Franchise Owners Ask Congress For Help To Stop Worker Campaign For Wages, Union

The fast food industry is hoping that a day of lobbying on Capitol Hill can blunt the momentum that fast food workers have gained through nearly two years of strikes and multiple lawsuits.

The International Franchise Association (IFA) is flying fast food store owners and other franchisees into Washington on Tuesday to drum up congressional opposition to a recent legal decision that could make corporations liable for how franchise employees are treated. The trade group expects more than 350 business owners from both the franchisee and franchisor sides of the business model to show up at its event this week, according to The Hill. Speaker John Boehner (R-OH) and former Republican Governors Association head and Mississippi Gov. Haley Barbour are scheduled to speak to the group, and the paper reports that top Senate Republicans will introduce legislation targeting federal labor regulators in general later this week.

The top attorney for the National Labor Relations Board (NLRB) determined in July that McDonald’s exerts so much control over how franchisees operate that they are responsible for labor law violations committed by franchise owners. That finding has yet to be tested in court, but if it holds up and is applied beyond the nation’s largest fast food chain, it would make it much harder for industries that rely on franchising to stymie workers’ attempts to exercise their labor rights.

IFA President Steve Caldeira said the board’s decision about McDonald’s franchisees “would essentially take away their autonomy to run their own business.” But franchisees enjoy little autonomy under the restrictive agreements they sign with the corporation now.

McDonald’s sends both formal company inspectors and secret shoppers into some of its stores to verify that the owners are keeping up with the exacting requirements of its contracts. It installs a computer system that monitors the money coming in and going out of each store at all times, automatically alerting managers if their labor costs get too high — an occurrence that can trigger labor law violations such as requiring workers to clock out but keep working or remain on-site without pay until the computer system reports that the store is back in the black.

Nine in 10 fast food workers report wage theft. The industry pays corporate CEOs 1,200 times more than it pays the typical worker. McDonald’s made $5.6 billion in profit on $28.1 billion in total revenue last year.

Most fast food companies require franchise owners to demonstrate a personal net worth in the millions of dollars before they are eligible to run a store. McDonald’s won’t entertain franchise applications from anyone who doesn’t have at least $750,000 in non-borrowed assets.

The eagerness of IFA members to take up McDonald’s cause against the NLRB indicates that many other companies fear they are vulnerable to the same arguments about corporate control over franchise workplaces, and would ultimately face the same consequences for labor violations that the board’s lawyer believes McDonald’s should face.

It also signals that franchise owners and their corporate bosses are more afraid of workers’ power than of the enforcement mechanisms that are supposed to punish wage theft. While workers have won several multi-million-dollar wage theft settlements this year, the legal systems that govern wage and hour violations around the country are generally ineffective. In California, where labor law is robust, workers have a less than one-in-five chance of recovering lost wages even when they prove they were robbed and win a judgment for restitution from the state. Wage theft steals more money each year than every bank robbery and store holdup in America combined.

McDonald’s Is Feeling The Heat, Y’all! How About We Kick It Up A Notch?

Over the last year, we have posted several things about McDonald's — how it treats and pays its workers, some of its rather bizarre PR and social media schemes that totally backfired, and more. It turns out the company is feeling the pressure. In a recent Securities and Exchange Commission filing, it admitted that “the long-term trend toward higher wages and social expenses ... which may intensify with increasing public focus on matters of income inequality” may affect future profits (you know, the ones paying its last CEO almost $9 million ... do you want fries with that?).

It also listed “the impact of campaigns by labor organizations and activists, including through the use of social media and other mobile communications and applications.”

And it's not just McDonald's. Here are a few more recent victories:

• A group of health care workers in L.A. is getting a raise to $15/hour.
• Workers at and near SeaTac Airport in Washington state won a referendum vote to raise the minimum wage to $15/hour, as well as some paid sick time.
• NYC airport workers are moving up to $10.10/hour.
• The Gap is raising starting wages to $10 by next year.
• Seattle McDonald's owners and operators say they're discussing raising minimum wages at their restaurants and are not fighting wage hikes.

What does it mean?

We're winning, that's what. With every click, every share, and every picket sign outside a fast-food joint, we're changing things. As a rep from one of the organizations involved, Low Pay Is Not OK, told us recently: "When we're taking on some of the largest corporations in the world, we need a huge megaphone to amplify these fast-food and low-wage workers' demands for $15 an hour and the right to form a union without interference. Upworthy has played a crucial role in spreading workers' stories as well as some of our videos and graphics that show how McDonald's is out of touch with its workers. Today is proof of the impact we're having together."

Here are some of the things we've posted that generated a lot of interest and attention.

• The young lady who stood up to the president of McDonald's at a shareholder meeting. (Via Fight for 15.)
• The McDonald's help line that told an employee to go on food stamps. (Via Low Pay Is Not OK.)
• The McDonald's "living on next to nothing" budget calculator. (Via Low Pay Is Not OK.)
• One Michigan fast-food restaurant that is paying employees double the minimum wage. (The restaurant is Moo Cluck Moo.)
• A young lady who is active in the struggle talks to Stephen Colbert. (Hat tip toFast Food Forward.)

The Burger Chain That Pays $10 An Hour With Benefits

Shake Shack, a burger chain with locations in Florida, New Jersey, New York, Pennsylvania, Washington, D.C. as well as international locations in the Middle East, Russia, Turkey, and the United Kingdom, pays starting workers $9.50 an hour outside of New York City and $10 an hour for New Yorkers, CEO Randy Garutti told ThinkProgress. It also offers full-time employees health, dental, vision, retirement, and disability benefits plus paid time off.

But on average, workers get $10.70 an hour thanks to a program it calls Shack Bucks. Every month, it gives employees a percentage of the company’s top-line sales. “It’s sort of immediate revenue sharing, not a long-term program,” he noted.

The company pays about 70 percent of employees’ health care premiums and also matches contributions to their 401(k)s. He added that he is “more excited” than all of these perks about how many employees move up into manager roles. “There are a lot of people who started making $9 an hour and are now general managers in our restaurants making very good money,” he said. The owners started in fine dining and brought the compensation practices from those restaurants into its original burger and hot dog stand.

When asked if these practices have come with concrete benefits for the company itself, he responded, “Absolutely,” adding, “Our turnover is lower, we can hire the best, they stay longer, and we can grow them into management.” And it pays off for customers. “If the team feels taken care of, then they’ll go out and take care of the guests.”

And he thinks other business owners in the fast food industry can take this approach and see similar results. “I know they can,” he said. “Because I just know that it works.”

And Shake Shack isn’t the only eatery taking this approach to its workforce. Michigan’s Moo Cluck Moo pays entry-level workers $15 an hour, a move its owners say leads to less turnover, better customer service, and more skilled employees. In-N-Out, a West Coast burger chain, pays $10.50 an hour for entry-level employees. Outside of the burger world, Boston-based burrito chain Boloco pays starting workers anywhere from $9 to $11 an hour, which the owner says increases loyalty and productivity and, in turn, profitability.

In light of the conversation to raise the minimum wage, others have decided to join in. Two pizza companies in St. Louis will soon pay at least $10.10 an hour. It has also spread outside of the food industry: clothing retailer The Gap recently announced it will also raise its lowest wage to $10.

But the fast food industry is notorious for low pay, where workers make so little that they consume $243 billion in public benefits each year just to get by. And while some executives argue that these jobs are just a starting place for teens earning extra cash, the reality is that the majority of workers are well out of their teenage years. Meanwhile, the average low-wage worker brings in half his or her family’s income, while more than a third of fast food workers are supporting children.

McDonald's #CheersToSochi Campaign Meets With LGBT Backlash

Way back in August 2013 the Human Rights Campaign sent an open letter to the top 10 American sponsors of the Sochi Olympics. The letter contained a list of demands, but also a warning: "Your logos and marketing will appear alongside every event, indelibly linking your brand to what happens in Sochi." (The letter can be read here.) Sage advice McDonald's would have been well-advised to take.

But they didn't. We've neither heard updates from HRC or had any new announcements from the sponsors. They may have forgotten, but the LGBT activist community has not. In November Minky Worden, director of global initiatives at Human Rights Watch, told the Associated Press, "It's taken months for the sponsors to formulate lawyerly responses that say nothing. We're going to work hard between now and Sochi to not let them off the hook."

With a big, helpful boost from mainstream media, McDonald's launched a social media campaign on Tuesday:

Fast Food Workers Are Walking Out All Across The Country. Here's Why.

There are some solid reasons why fast food workers and others who work for pennies have had enough. Here's economist Robert Reich with two minutes of sanity.

McDonald’s Website Tells Underpaid Employees to Eat Smaller Meals and Sell Holiday Gifts on Ebay

McDonalds cares.

No, really -- hear me out!

You see, Ronald knows how rough it is for his employees to pay rent, feed kids, buy clothes, and even gas up the car to drive to work!  Since he only pays his employees minimum wage, he is fully aware of the dire economic situation created by underpaid employees.

It’s OK, though!  Ronald wants to help out!  He’s set up a really super-duper helpful web site filled to the brim with really super-duper…dumbshit stupid insane ideas!

Ronald wants his employees to relax, so he suggests taking “at least” two vacations a year to offset the stress created by his low wages.  Apparently, spending half a year’s salary on vacations will cut heart attack risk by 50%. Pack your bags, if you can find time off from your other job and your other other job.  Wait–that’s two vacations, right there!

Of course, you could always sing to reduce those pesky stress levels!  Bust out your favorite tune as you slave away!  Ronald doesn’t want his servants to seem unhappy.

Since Ronald cares about your health, he suggests that you don’t need to be able to afford more food.  You just need to eat less!  To that end, break up your Ramen noodles and saltines into smaller bits.  You’ll still be McMalnourished–but at least you’ll feel more full!

With the holidays approaching, Ronald wants to make sure that you don’t dig yourself into debt spending the half a year’s salary you didn’t spend taking the family to Disney World.  To that end, he suggests that you sell off some of your stuff on Craigslist and eBay!

If that doesn’t help enough, you can always return some of the stuff.  After all, Junior isn’t going to miss that new XBOX game that much, is he?  Ho. Ho Ho.

No matter what, though, you should just stop bitching.  Ronald is kind of getting sick of hearing you people complain that your heat got shut off again.  Ronald is trying to pretend to care, here, and you people are making it difficult.  If you get the urge to complain, take another vacation, or bust out a few lines of La Bamba.  If all else fails, go buy yourself a cheeseburger.  Break it into bits, stretch it over your lunch break, and enjoy!  It will feel so close to the way a meal feels that you’ll be Lovin’ It!

McDonald’s Tells Full-Time Employee to Apply for Welfare Benefits

The video below, released this week by the service employees’ union, shows a concrete example of how private corporations that pay poverty wages profit by imposing part of their labor costs on the rest of us.

In it, you’ll hear an audio recording of a woman who’s worked full-time for McDonald’s for ten years calling the “McResources helpline,” where a helpful operator encourages her to apply for foodstamps and Medicaid for herself and her two children.

In our society, people like Nancy face a significant degree of stigma for accepting public benefits, but the real “welfare queens” in this story are McDonald’s shareholders, who pocket the difference between what the company pays and what their workers’ need to make ends meet. They use their lobbying power to oppose minimum wage hikes, but they haven’t beaten back deep cuts to our social welfare system. 

This kind of subsidy is incredibly common in today’s low-wage economy. According to a study released last week by the Labor Center at UC Berkeley…

• More than half (52 percent) of the families of front-line fast-food workers are enrolled in one or more public programs, compared to 25 percent of the workforce as a whole.
• The cost of public assistance to families of workers in the fast-food industry is nearly $7 billion per year.
• At an average of $3.9 billion per year, spending on Medicaid and the Children’s Health Insurance Program (CHIP) accounts for more than half of these costs.
• Due to low earnings, fast-food workers’ families also receive an annual average of $1.04 billion in food stamp benefits and $1.91 billion in Earned Income Tax Credit payments.
• People working in fast-food jobs are more likely to live in or near poverty. One in five families with a member holding a fast-food job has an income below the poverty line, and 43 percent have an income two times the federal poverty level or less.
• Even full-time hours are not enough to compensate for low wages.

This isn’t how a “free market” is supposed to work. These workers are selling their labor for less than the cost of production – less than what it takes to provide basics like food, shelter and health care. Low-wage employers are in turn keeping the cost of their products artificially low by socializing a chunk of their labor expenses. And while we may be enjoy a cheap burger, we end up paying more for it when taxes are pulled out of our paychecks.

A Word from the Sponsors of the upcoming Winter Olympics

Check out the video to see McDonald's latest effort to cheat workers: fee-laden debit cards.

When single mother Natalie Gunshannon went to get her first paycheck from her new job at McDonald’s, she was in for a shock — McDonald’s gave her wages on a fee-riddled debit card that would charge her every time she used it charging her $5 just for withdrawing money at the bank.

What’s more, when Natalie asked for a check, McDonald’s refused, saying she had to take the card — and the charges — or not take any money at all. This is a way for her local franchise operator to save a few dollars from the cost of cutting checks, by passing the burden on to its employees, pushing many of them below minimum wage.

Tell McDonald’s to ban the practice of forcing employees into fee-riddled debit cards.

The practice of replacing checks with expensive cards is gaining ground with employers around the country. It’s employee abuse, pure and simple telling workers that they have no choice but to accept unfair charges or go hungry.

But employers are forcing this upon their workers because they think they can get away with it. If consumers band together to punish businesses that engage in this horrendous practice, we can help stop it before it steals wages from more workers.

Stephen Colbert on McDonald’s and the minimum wage

Stephen Colbert does a brilliant take on McDonald’s new Web site that purports to help employees budget their limited income.

“McDonald’s agrees with me. Instead of raising salaries, they’re giving their workers something more valuable: a Web site.”

For example, McDonald’s budget journal assumed that employees spend zero on heating, and only $20 a month on health insurance, when McDonald’s smallest health insurance lan is nearly $60 a month.

 The journal has now been updated to include some heating costs.  But, as Colbert notes, it still assumes that you have a second job.

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