Fast food salary struggles

A protester holds up a sign at a demonstration outside McDonald's in Times Square in support of employees on strike at various fast-food chains .(REUTERS/Andrew Kelly)

A protester holds up a sign at a demonstration outside McDonald’s in Times Square in support of employees on strike at various fast-food chains .(REUTERS/Andrew Kelly)

Fast-food workers in more than 50 cities Thursday are striking for fair pay and the right to form a union — the biggest walkout to hit the industry. This latest round of labor unrest comes 50 years after hundreds of thousands of Americans, led by Martin Luther King Jr., joined the March on Washington for Jobs and Freedom, demanding not only civil rights, but also good jobs and economic equality.

One demand of the 1963 marchers was raising the federal minimum wage to $2 an hour. In today’s dollars, that’s roughly $15 an hour — what the striking fast-food workers are now calling for.

For all the progress made since 1963, the reality is that economic inequality persists and continues to grow. Income inequality is greater today in the U.S. than in any other OECD nation, except Chile, Mexico and Turkey, and exceeds that of many developing countries.

Almost one-quarter of all jobs in the United States pay wages below the poverty line for a family of four. CEO compensation, meanwhile, continues to climb. It would take a full-time, minimum-wage worker more than 930 years to earn as much as the chief executive officer of Yum! Brands, which operates Taco Bell, Pizza Hut and KFC, made in 2012.

Fast-food workers are in the lowest paid occupational category. The median hourly wage for frontline fast-food workers is $8.94 nationally. Many don’t even earn that. A shortage of hours further limits income. Fast-food workers work only 24 hours a week on average — at $8.94 an hour, this adds up to barely $11,000 a year.

Wages are so low that many workers have to turn to public assistance for basic survival. Which means that taxpayers must subsidize the poverty wages that fast-food corporations pay their employees.

That’s indefensible, especially considering corporate fast-food giants are enjoying robust profits. McDonald’s raked in $5.5 billion in profits in 2012 — a 27 percent increase in profits over five years — while YUM! Brands posted $1.6 billion in profits last year.

But these profits are clearly not trickling down to the frontline workers. The fact that the workers are willing to strike — one of the riskiest things any worker, but especially a low-wage worker, can do — shows how untenable the situation is.

The fast-food industry lobbyists promote the stereotype that fast-food workers are teenagers earning pocket money. In fact the majority of fast-food workers now are adults, with a median age of 28. These are jobs that many adults are dependent on to support families. More than one in four fast-food workers are raising children, according to a Center for Economic and Policy Research study. This trend is mirrored broadly across our low-wage workforce: 88 percent of low-wage workers are adults today, compared with 74 percent 35 years ago.

The fast-food worker protests are taking place in the context of a disproportionate expansion of low-wage work in the U.S. economy. The Bureau of Labor Statistics estimates that seven of ten growth occupations through 2020 will be low-wage, including jobs with big-box retailers and fast-food chains. This shift toward low-wage work in our labor market is a decades-long trend that has accelerated during the recession and subsequent recovery. Low-wage jobs represented 20 percent of the jobs lost during the recession, but constitute 60 percent of jobs gained in the recovery.

What can we do to address this low-wage jobs crisis? Exerting pressure on the fast-food and retail giants that rake in billions in profits is a good starting point. These companies can afford to share more of their wealth with their frontline workers and should be doing so.

Federal policymakers also need to act on raising the federal minimum wage — which now stands at just $7.25 an hour — to boost wages broadly across the bottom of the labor market. It’s also time for Washington to get serious about investing in the creation of good jobs.

Boosting wages for America’s lowest-paid workers is a crucial step toward reducing economic inequality and rebuilding a strong economy. Perhaps 50 years from now, we’ll look back on the fast-food workers’ fight as the catalyst we so desperately needed.

(Christine Owens is executive director of the National Employment Law Project. )
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Copyright  © 2013 Capitol Hill Blue

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7 Responses to "Fast food salary struggles"

  1. Carl Nemo **==  August 29, 2013 at 12:35 pm

    I wholeheartedly support their effort for better wage and benefits.

    The highest wage I’ve run across in this industry is a Starbucks outlet manager’ who’s paid $11 per hour.

    Although these jobs shouldn’t have degenerated to a life’s path in terms of employment; outsourcing of so many of our blue collar manufacturing jobs have forced many folks to migrate to these jobs even if on a second job basis.

    I’d gladly pay double the price for a ‘fatburger’ or whatever else they serve up in these places. I rarely frequent them because to put it simply the food they offer for the most part is not healthy and at best should be a novelty experience.

    For those Americans that are too lazy to prepare wholesome meals at home, I suggest they purchase a slow cooker and simply copy recipes found within the their supplied guides or cookbooks and forego frittering your hard earned money on fast food fare.

    As to what these workers should be paid I wouldn’t hazard to guess, but it should surely be a long way from the average of $8.94 per hour nationwide.

    So too higher wages mean these workers will have more discretionary income to pour back into our economy for the purchase of goods and services.

    Rest assured junk food junkies will bitch and complain about a quantum leap in fast food prices, but it will not drive them away. They’re ‘hooked’ no different than druggies on this saturated fat laden fare not including all the hidden appetite enhancing chemicals that are placed within. Bssically America’s fast food industry is nothing but a mere ‘feedlot’ for a now intellectually bovine populace. Seemingly as their government, so too they deserve the food they get from these establishments.

    Carl Nemo **==

  2. Keith  August 29, 2013 at 2:58 pm

    I wholeheartedly support their effort for better wage and benefits.

    Sorry, Carl, but I have to disagree with you on this one.

    While, I too, believe these folks work very hard at what they do (I have a couple of family relatives who manage McDonald’s stores and work unbelievable hours for relatively low pay), the truth is that study after study has shown that in just about every case where higher minimum wages have been mandated, the net effect has been LESS employment among that working class, not more.

    People also seem to forget that fast-food outlets are businesses. And, like it or not, businesses are in business to make a profit. Increased wages will simply be passed on to consumers thereby raising the price of the food that is sold. That, in turn, will result in fewer customers (many of whom, by the way, are ALSO hurting financially) which, again, translates into fewer people on staff.

    Years ago, aside from mid and senior-level managers, people who worked at these fast-food places were usually teens and elders who were simply looking for their first job in the workplace and/or some extra “pin money”.

    That’s probably because McDonald’s business model was never intended to pay anyone working “the line” a “living wage”. As far as I’m concerned, it still shouldn’t. That’s because nobody is twisting the arms of the people currently employed there to remain so.

    The bottom line here is that, perhaps those now complaining the loudest about their wages at these fast-food outlets might better spend their time educating themselves to increase their overall worth to the business community beyond a “McJob”.

    Or, to put it another way, as I see it, with all of the subsidized (if not “free”) education programs that now abound in this country, there is absolutely NO excuse (except one’s own poor life decisions or abject laziness) why someone with even half a brain is unable to “pull themselves up by their bootstraps” so as to qualify themselves for higher-paying employment.

    • Jon  September 1, 2013 at 2:02 am

      “pull themselves up by their bootstraps”

      This assertion is supported neither by a citation nor any evidence whatsoever.

      Education, even if paid for entirely, is not free. There is a cost in time and materials, and those alone may make it prohibitively expensive.

      When an hour working means the difference between paying the rent and getting thrown out, an hour spent ‘hitting the books’ is not profitable.

      Furthermore, look up the percentages of fast-food workers who have college degrees. There’s a lot of them.

      I hold your ‘pull up by their bootstraps’ comment to be the most abjectly crass and uneducated statement I’ve seen on this website in some time.

      I invite your rebuttal.

      Jon

  3. Carl Nemo **==  August 29, 2013 at 11:29 pm

    Hi Keith,

    No problem with disagreements, that’s what makes life interesting. There’s always at least two sides to an issue and at times even more.

    I’m going to supply a U.S. Health and Human Services link that supplies Federal poverty level guidelines for different areas of the country.

    http://aspe.hhs.gov/poverty/13poverty.cfm

    Many of these “McJobs” as you so refer to them employ single mothers with a child or more. I rarely see men staffing McDonald’s, BurgerKing, Carl’s Junior et al. fast food establishments in the Pacific Northwest.It’s usually the face of a woman spanning from young to middle aged serving one either over the counter or at the drive-in window. When you move into the Starbucks et al. restaurant chains then it’s different story, but the base wages exluding tips still aren’t’ all that great. So too many of these businesses play in house games relative to tip distributions etc. which affects morale.

    So based on a 32 hour work week or less which is typical, then the average annual income before Federal/State and local taxes, not including SS and Medicare deductions leaves one with truly a meager, minimally life sustaining income.

    A 32 hour week at the aforementioned article figure of $8.74 per hour would equate to a gross income of $14,453.36. Of course this before the aforementioned tax deductions from the gross leaving one below the specified Federal poverty levels.

    Granted these jobs can’t provide a lifetime, lifestyle income, but just the same these employees are providing a service to customers, mostly overweight who either drive up or plod into the chain for another load of high carb/fat entrees.

    Fast food is a luxury item and does not really fit into healthy food fare for people. In fact most restaurant fare isn’t healthy. Folks that are living on this type of food on a daily basis are headed for an early grave. Of course this is another issue, but is linked to the fact there’s more room for much higher pricing for this type of food. It’s surely not a cost effective way to eat at current price levels. Rest assured, higher pricing will not cause a serious pullback in customers patronizing these chains. They are truly addicted to the taste of this type of food fare.

    Every year there’s millions of graduates from our colleges and various trade related schools, but most graduates rarely get placed within their chosen field. I’ve had young folks with a Masters Degree serve me coffee in Starbucks. I’ve asked them as to why they work there and they simply say its for the benefits; I.E., medical, paid vacation and a few other percs. They are all hoping to break into their chosen field, but seemingly as it’s said…”many are called, but few are chosen”. Seemingly for one to get a high paying job they’ll have to learn Mandarin Chinese and emigrate to the the PRC. America has been stripped clean of its blue collar, manufacturing jobs and many professional positions are being filled by offshore graduates entering the U.S. on H-1B visas since they will generally work for less pay than a U.S. graduate and provide equal or better performance for the wages tendered. Microsoft Corp is a fierce proponent for the H-1B program as well as other tech firms. Where does that leave our graduates, possibly at a McJob caliber occupation in order to simply survive.

    I rest my case for higher wages and other percs for this classifcation of worker.

    Carl Nemo **==

  4. Keith  August 30, 2013 at 11:19 am

    Granted these jobs can’t provide a lifetime, lifestyle income, but just the same these employees are providing a service to customers, mostly overweight who either drive up or plod into the chain for another load of high carb/fat entrees

    Agreed.

    However, once again, I really have no sympathy for those who think they can depend solely on a “McJob” for a “living wage”.

    That’s because, way you cut it, flipping and serving up hamburgers is unskilled labor.

    And, just like the US Auto Industry, which is also now largely “in the tank” because they’ve been routinely paying unskilled assembly line workers upwards of $75 per hour (plus benefits) for decades, such nonsense is unsustainable over the long run, particularly when employers have a choice as to where, how and by whom they build their vehicles.

    Unfortunately, this whole sorry “McJob” issue is yet another testament of how our US education system has totally failed both current (and previous) generations.

    Essentially, our current secondary (and even post-secondary) education system in the United States is STILL cranking out hoards of (often functionally illiterate) “graduates” whose only marketable skill is rote memorization so as to work on an assembly line…or to flip hamburgers.

    Unless and until we start preparing our high school and college graduates to THINK so as to really compete in the high-tech world of the 21st Century, we will continue to see our economy tank as well as more and more people on food stamps (not to mention the welfare dole).

    Clearly, the rote memory knowledges and skills we continue to impart to our so-called high school and college “graduates” as being “enough” are simply no longer so in today’s world.

  5. Carl Nemo **==  August 30, 2013 at 2:19 pm

    “Clearly, the rote memory knowledges and skills we continue to impart to our so-called high school and college “graduates” as being “enough” are simply no longer so in today’s world.” …extract from reply

    I whole-heartedly agree, but there’s a rub. Folks that are gifted with native intelligence and opportunities for a fine education do not represent the greater unwashed masses within our population.

    If you look at a Gaussian distribution of intelligence, 50% of our population has below average intelligence with those above the median above average to the rarefied zone of extremely high intelligence.

    A society is like a ‘fish tank’ and is basically a social habitat. In order to maintain a society at some level of harmony and decorum there has to be job opportunities for all levels of intelligence.

    Not everyone can become a scientist, engineer, doctor, lawyer or some other high income occupation.

    That’s were the blue collar to service industry jobs fit within this societal construct. As it’s said, you can’t make a silk purse out of a sows ear when it comes to most folks that are average to below average achievers. It’s simply fact and one that savvy societal engineers need to deal with.

    The rabid offshoring of our manufacturing base was ill thought when our leaders decided to sacrifice a nation on the altar of globalism now run amok. So too it’s damaged America’s tax base.

    There’s no way a resident of the U.S. can compete with a low wage earner in China, India or Malaysia, but that’s what has been forced upon our society.

    I totally agree about auto workers wages and benefits being off the charts and in no way should have devolved to such levels of compensation. The rest is history with Detroit paying the price as a America’s first major city to declare bankruptcy, a city rife with crime and minimal services due to the destruction of the tax base which depended on jobs provided by a healthy auto industry which is no more.

    As a final note concerning most college educations is they provide little to no useful skills relative to placement post graduation. I had a personnel manager once tell me the only thing the higher degree represents to a prospective employer is a candidate’s ‘sticktoitiveness’ to a program of instruction which hopefully will carry over to producing productive worker drones within America’s corporate work place. Corporations aren’t looking for thinkers. Thinkers are dangerous unless they are thinking ‘correctly’ relative to major stockholders’ bottomline.

    Truly sterling intellects who demonstrate such through early scholarship are moved upward through special pipelines and groomed to lead with the rest of the populace simply to be productive follower/workers.

    My wife and I have been married 47 years as of this week. We never had children, so I’m no expert when it comes to advice on education, but when asked I urge friends of mine to explore a pathway for their kids and grandkids to pursue an honest trade/skill; I.E., plumber, machinist, auto mechanic, dental hygienist, MRI/xray tech etc.; I.E., anything other than a useless B.A./B.S. degree that’s now almost the level of a good high school education of 50 years ago. America is too obsessed with everyone becoming a millionaire and we’re paying the price with so many citizens chasing this elusive goal, the end result being the compromise of a necessary societal value system based on ethics.

    America is no longer a sound, fruitful society with a future. It semingly is driven by terminal greed along with the acquisition of evermore material wealth; societal consequences be damned.

    Thanks for sharing your views on this subject.

    Carl Nemo **==

  6. Keith  August 30, 2013 at 3:59 pm

    Corporations aren’t looking for thinkers. Thinkers are dangerous unless they are thinking ‘correctly’ relative to major stockholders’ bottomline.

    …All of which would be an issue, if it were not for the fact that most “new” jobs being created in the United States these days (outside of the “McJobs” we’ve been discussing) are in small business…NOT the major corporations.

    And, without even knowing you are doing it, this is perhaps also why your sage advice to youngsters who are not cut out to be doctors or lawyers is to steer clear of the BA/BS degree mills and seek out a career path such as becoming a plumber, machinist, auto mechanic or dental hygienist.

    Indeed, that’s the same advice I’ve given to my own children. But, I’ve also encouraged them to at least take a course or two in business and economics so as to at least begin to understand how a business operates.

    To successfully manage a small business in the United States today requires a whole different set of knowledge and skills (such as accounting, legal, and personnel management BESIDES the product or service you are offering) than rote memorization.

    Yet, as I’ve said before, NONE of those skills are even DISCUSSED, let alone taught in the halls of the secondary and post-secondary schools in the United States today.

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