Streams

Fast Food Strikes and Degrading Labor

Thursday, August 29, 2013

mcdonalds arches (John Harvey/flickr)

Can the service industry restore the American middle class? Marc Doussard, assistant professor in the Department of Urban and Regional Planning at the University of Illinois-Urbana-Chapaign and author of Degraded Work: The Struggle at the Bottom of the Labor Market, and Michael A. Fletcher, national economics reporter at The Washington Post, discuss today's fast food worker strike and its implications for the overall labor movement.

Guests:

Marc Doussard

Comments [38]

BW from Albany

I was not going to comment but some things a caller on your show today said really have bothered me all day. I live upstate and hear your show via SiriusXM and it was a tape delay, so I could not call in.

For the record, I spent 12 years in radio and I have NEVER been motivated to call a show, but I really would have today.

The gentleman who identified himself as a franchisee planning to come to the area - I take issue with everything he had to say.

While I was in college I worked as a night manager at a fast food chain. After closing each night, I had to do paperwork. Among that paperwork was a cost/profit balance sheet. The franchise owner had figured out EXACTLY how much EVERYTHING sold cost him - that included the food, the labor, electricity, insurance, etc. For example, a $.99 item was paid for with only $.21, with the rest being profit.

They made a lot of money. A lot.

Furthermore, every hour, at the top of the hour, we had to run a report from the register which calculated how much money we had made in the past hour and looked at how many people we had clocked in. The computer would tell you to send one or two or more people home, so that the profit margin would remain high.

These employees had nothing. They struggled. I hated to send them home, so I'd send them on a quick break, hoping for a string of cars to come, and sometimes they did and I didn't have to send anyone home.

I saw how much money they made, and how much of it was profit. I had to email the owners what the cost vs profit was every night after I finished that report.

I was doing this job while I was in college - but most of these people working there were never going to have the chance to pay for college, or find the time to go, because they were working two or three jobs total, making nothing.

This was in the southwest, and we had a lot of undocumented workers employed, using what I'm pretty sure were stolen SS cards. They were trying to survive, to feed their families. The owner would come in or the District Manager and threaten to call immigration on them if they asked health care or being paid for overtime.

The man you had on the phone today - he spoke the same rhetoric that these owners I worked for did. What he said is only true to him, because his money vault won't have quite as much to swim around in.

Just for some verification that what he said was greed speaking, check out this story from NPR:
http://www.npr.org/templates/story/story.php?storyId=6288944

It is about In-N-Out Burger which starts their hourly people at a much higher rate, they have very high quality food. Their workers get health insurance, have a 401k, and managers can make six figures a year.

It can be done, like many things in this nation, when the greedy aren't making the decisions.
So that caller - I'm repulsed. He's a liar. He's greedy. He made me sick.

Aug. 29 2013 09:49 PM
EddiebROWN from New York, NY

Like it or not, Mindless work that requires little skill pays a low wage. If you don't like it, change your career.

Aug. 29 2013 08:54 PM
John Doe

Fast food workers demanding 15 dollars an hour? What a joke.

Tell me, why should I have to pay taxes to support the welfare state? Why should I HAVE TO PAY FOR YOUR MISTAKES???

If you cannot afford to have children, THEN DO NOT HAVE CHILDREN!!!!!!!!!!

Sterilize all people on welfare. Problem solved immediately.

Aug. 29 2013 08:50 PM
Stephanie DeManuelle from Lower manhattan

I wish that WNYC would have brought up the cost that low/part time work takes from taxpayers - food stamps, unemployment, local emergency room care.

Aug. 29 2013 08:44 PM
steve from queens

to Mark Brown:

I followed your link. a minimum of 1%? you are a nice guy. it would be 15% on that top end.

Aug. 29 2013 07:22 PM
John from Greenland

Cut the costs & they will come .
Just like foodbanks

Aug. 29 2013 03:15 PM

Apparently there are no franchise restaurants in Germany, where fast food workers are paid $15 an hour, or in Australia, where the minimum wage equals $15 an hour. Perhaps a serious moderator would have questioned the franchise owner a bit more critically about that and his other claims. Besides what other commenters have said, did he think the delicatessens he mentioned as competition, which have a higher labor input, would somehow not have to pay a higher minimum wage as well and raise their prices also? Should the government subsidise his gas and electricity? Should he get a cut rate on the land and building so he can charge lower prices?

Aug. 29 2013 10:53 AM
mark brown from http://sos-newdeal.blogspot.com

Steve from Queens.
see here on my blog for my top-10 list of items to FIX the country.
http://sos-newdeal.blogspot.com/2009/02/top-ten-list-what-i-believe-and-want.html?view=mosaic

I totally agree. We as a country have been hurt by what I call the 1099 economy... That is corporations that no longer hire FULL time employees with benefits, but SUB-CONTRACT almost all of their work and no longer give their employees the ability to get to 35 or 40 hrs of work per week.

The 1099 mentality has dramatically damaged our country, our work-force, and our future.

Aug. 29 2013 10:50 AM
steve from queens

could supply and demand be part of the problem? I am self employed myself and I can only do the highest levels of what I do (woodwork) because of a swarm of workers - most quite new to our country - who will work for a $100 a day. I am sorry, I have a mortgage and a child and I cannot work for a $100 a day. there was a time that people like me could make a living hanging drywall but not anymore thanks to too many people looking for those jobs.

I am a democrat and a democrat in the old style of Americans for Americans. maybe when we make a conscious decision here to take care of Americans and pay enough in wages that our inner city (American) youth and less educated members of society can take some of the lower wage jobs - albeit at a level of pay a little more than what is out there now (but not $15.00 an hour), maybe then more people like me will jump on this issue and ask for some change. As long as we allow immigration in the numbers we have been allowing, there is no way anyone can demand higher wages and as an American who has to compete against people who will undercut me at every step of the way (and often produce inferior work) there is no way I will support this issue.

It is time for Americans to support Americans.

Aug. 29 2013 10:44 AM

Once again Brian Lehrer moderates with all the backbone of a throw rug. WNYC should hire moderators who are willing to exercise some critical thinking and ask serious questions of the guests and callers and provoke substantive discussion.

Aug. 29 2013 10:41 AM

In N Out restaurants in Southern California pays starting wages of $10.25/hour and has an extremely loyal following.

The answer here is not increased regulation. We already have minimum wages, now the PACA is de facto limiting workers to 35 hours/week—and the only solution your guests can come up with is increased regulations on franchises? Why not just have the government take over fast food, if they're so effective at regulating it? If $9/hr will work so well, why not $90/hr—then everyone would be rich, right? Or are we counting on the government to effectively manage price controls—to find the perfect equilibrium? When in the history of government has that ever worked as effectively as the market?

Obviously, the laws of economics, which Marc Doussard ridiculed as "what you heard in your freshman economics class" do apply, and centrally planned micromanagement through Federal regulations is simply not an effective way of managing an economy. Yes, the "rising tide" is a good argument—but not for minimum wage, but rather a healthy economy. Which means a less-regulated economy.

More to the point, it's appalling to refer to a job at a restaurant as "degraded work". This is part of a patronizing view of working Americans and a general snobbery of left-wing elites and academics. A friend recently bemoaned the "slave-like labor" of the people working the registers at my local D'Agostino. Clearly she has never worked in a grocery store, and one doubts that Doussard has either. I have, and it's a dignified job with opportunity for advancement, and like any other, as rewarding as one makes it.

Of course, few at WNYC know this—not a single fast-food worker called in. Why? Because they don't listen to "public" radio. Why? Because it's not really made for the public, and doesn't really provide a fair hearing on issues. Could Lehrer really not get someone who could make a credible argument against the minimum wage?

Let people work, for more than 35 hours a week, and more In N Outs will pop up. But smart businesspeople and decent bosses are not interested in hiring now, because of absurd and burdensome regulations.

Aug. 29 2013 10:38 AM
ericf

OK, so let me see if I've got this right:

We have self-proclaimed pro-fee market, entrepreneurial types who want to run business that sell unhealthful food made of ingredients subsidized by the farm program and prepared by workers subsidized by SNAP and Medicare, but government stepping in to require living wages is interference in the free market?

Could it be that if some of these business cannot get along wihout such subsidies they are just unsustainable, should go under, and make way for other business providing better products and paying better wages which now cannot compete with subsisidized junk?

Aug. 29 2013 10:37 AM
John A

Require that all OTC businesses rate and publish their employee treatment in an A,B,C style scale. Then customers can see where the higher prices went, or didn't.
-
Really important story. Now to read the comments...

Aug. 29 2013 10:35 AM
Rita M Watson MD

Fast Food margins are low because there are too many for current demand. American obesity is rooted in this industry. They should be allowed to die and lets make good jobs by raising a more sustainable industry.

Most of my relatives and patients visit fast food places less than once a year.
There are many establishments on many corners fighting for a falling interest.

Aug. 29 2013 10:33 AM
roberta from Brooklyn

To say that low wages should stay that way because the industry needs low-wage workers to stay in business is like supporting slavery because the South needed it to have a viable agricultural model. This is a human rights issue.

Aug. 29 2013 10:30 AM
Scott from Soho

Your guest has no idea what he is talking about. Doubling wages would undoubtedly add more that 2% to expenses. Why not bring in someone that can read a balance sheet and see what the impact of paying a burger flipper $15.00/ hr plus benefits would do to a fast food franchise business.

Your absolute ignorance with regard to running a business is annoying the crap out of anyone who has ever started one.

Aug. 29 2013 10:30 AM
mark brown from http://sos-newdeal.blogspot.com

I say(said over 6 years ago... ..and toBRIAN !!!)):

we need to create a LIVING wage, and RENAME the minimum wage as the TRAINING wage. Where the TRAINING wage is up to (say 2-3 years), and the LIVING wage comes after that.
look HERE.. http://sos-newdeal.blogspot.com/2010/12/live-answer-from-robert-reich.html

and HERE for a detailed description of my ideas
http://sos-newdeal.blogspot.com/2008/10/topic-of-week-living-wage.html

...and I don't even bother calling in anymore. My name and number are on his "censored list..."

Aug. 29 2013 10:27 AM
Taher from Croton on Hudson

Modern day Slavery is also a solution to to low wages. The fast food establishments can then sale their bad food on another planet.

Aug. 29 2013 10:25 AM

theories...sheesh

Aug. 29 2013 10:24 AM
fuva from harlemworld

This and other such wage/economic discourse seems to take for granted that CEOs, etc. should be paid 100+ times the lowest paid worker. Why is this never questioned? Exactly what is included in the economic pie we're divvying up? OPEN THE BOOKS.

Aug. 29 2013 10:24 AM
Ana from brooklyn

I worked for a company a few years ago--a national chain of used book stores--where it was written into the corporate rules that the lowest paid employees working in the stores could not make less than a fixed percentage of the pay of the highest paid executives. Every sales person worked full time, we had profit sharing and matched 401(k), and we had amazing FREE health insurance. The company thrived and grew and continues growing. It can be done!

Aug. 29 2013 10:24 AM
Bob from NYC

I haven't eaten fast food for 30 years, since my teens, because their "food" is garbage (nutritionally) in my book. But if I was a fast food customer, I would quit going there because I don't want to patronize businesses that pay their employees less than a living wage. That's why I refuse to go to Wal-Mart, CVS and the rest of the giant corporate chains. (Yes, I'm lucky enough to have enough money that I can choose to go to mom-and-pop stores where I may pay more.) The fact that the wages paid by these giant corporations and franchises are so low that it's subsidized by the taxpayers (in the form of food stamps, subsidized public housing, etc) is obscene and I refuse (to the greatest extent possible) to have any part of it.

Aug. 29 2013 10:24 AM
stacey from brooklyn

If these jobs suddenly paid twice as much, would they be more desirable and therefore more competitive in the marketplace? Would we see an influx of more experienced workers competing for what would be relatively high paying jobs, cutting out some of the people who have them now?

Aug. 29 2013 10:24 AM
Edie

Historical note - same in the 20s and 30s - before minimum wage in 1936, huge fights over how to get a "floor under wages" by industry, government. At that time, consumer movements DID make a difference - the customers/shareholders at McD's may have the biggest lever

Aug. 29 2013 10:23 AM
JCRO from upstate NY

What if, instead of just paying everybody the same wage, these franchise develop a new payroll and HR plan where there is hierarchy for those employees who work harder or who have seniority. While i was in high school I worked in fast food for 4 years and I came in making the same amount as adults who were there for 10 years. Let's push these employers to compensate their senior and loyal employees with a living wage and then pay new workers who are less likely to stay with a minimum wage, and if they choose to they can work up to making that living wage of $15 an hour.

Aug. 29 2013 10:23 AM
Smokey from LES

Low minimum wage is really corporate welfare. The rest of us subsidize the poorly-paid workers. Think of the tax savings we'd all get from eliminating food stamps when people make enough to buy food from their own earnings. We'd have to pay a fair amount for our quick food, but it would be an honest deal for everyone.

Aug. 29 2013 10:23 AM
kikakiki from wall street/harlem

Brian a simple solution open the books - I worked as a manager in a McDonald's, granted they make the most money, but the amount of money my store took in every day versus the amount of money we paid out to workers was Unconscionable. The profit margin is much larger than many of the corporations admit to. Also the hours are horrendous you have no idea from week to week how many hours you will, what hours you will work and finally no benefits only the store manager and up receives benefits. No sick days no work no pay, no health insurance, no vacation and many stores are open 24 hours no night differential. Even the one store franchise makes a high profit margin.

Aug. 29 2013 10:22 AM
Clif from Manhattan

But to the caller Denise, what your saying would make sense. We couldn't possibly do that (he says sarcastically).

Aug. 29 2013 10:21 AM
Gabby Weiss from Sandy Hook, NJ

if his business cannot support a fair wage, then his business model is no good. Also, who says paying $500,000 for a franchise is a good business investment? Spend less, make a business and stop the franchise greed model

Aug. 29 2013 10:20 AM
superf88

has peter the franchise guy calculated the *actual cost* of rapid turnover as a result of paying so little, and therefore having a workforce that is really a group of people looking for better jobs? i'm sure its hundreds or thousands per head...

and brian, rather than characterizing the strategy of delivering higher salaries by "taking it out of customers' hides," why not refer to it as paying "a premium for fairly paid workers?"

Starbucks customers are all too happy to pay this premium when it comes to paying coffee bean pickers in Nicaragua.

Aug. 29 2013 10:19 AM
Joe from nearby

@caller Peter- Would giving your workers a raise mean you'd have one less vacation home, or a smaller Benz?
Boohoo, cry me a river.

Aug. 29 2013 10:16 AM
Robert from NYC

There is no flip side to this. Workers MUST get livable salaries and however that has to be handled so be it. Sit down and figure out how you get there. Charging more doesn't mean it has to be outrageously more. A few cents more can bring in quite a bit of money in a profitable business like say, MacDonald's or Burger King or KFC. These folks pull in loads of money and more of it should go to workers and a bit less to investors. No one has to lose out here, NO ONE!!

Aug. 29 2013 10:16 AM
Peg

I would pay extra to and frequent those businesses who pay their workers a LIVING WAGE.

Aug. 29 2013 10:15 AM
Sheldon from Brooklyn

Fast food jobs should be relatively "low wage" but it should be a wage someone can live (albeit frugally) on, without taxpayers subsidizing them via food stamps and section 8 etc.

If your business model cannot operate without your full time workers having to use food stamps to survive, then your (99 cent burrito) business model sucks...

Aug. 29 2013 10:15 AM
Smokey from LES

Raising minimum wage is a leveling that affects everyone equally. Switzerland has such a high minimum wage everyone lives well. It's expensive, but government doesn't have to subsidize so many workers. Minimum wage should be a living wage - period.

Aug. 29 2013 10:15 AM
Kate from NJ

Maybe these 'businesses' shouldn't be in business if they can't pay a decent wage. It seems too much focus is on 'business' and none on 'labor'.

Aug. 29 2013 10:14 AM
Beatrice from Brooklyn

I'm wondering how much the management at the fast food places are paid. Can they take a cut to pass on to the workers?

Aug. 29 2013 10:13 AM
McDonalds actually decent

Not sure why you are picking on McDs, which happens to have relatively good training, morale, opportunities for growth, and even relatively high quality food compared to its competitors.

CVS, Gristides, Citi... there are so many examples of workers who are pathetically paid and whose potential contributions as workers are woefully disrespected. Which comes out so quickly in the workers' offensive attitudes and incompetent service. I find McDonald's workers to be shockingly professional compared to most other "Mickey Dee" workers.

Aug. 29 2013 10:05 AM

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