Aug. 29 (Bloomberg) -- Fast-food workers vowed to walk off the job today in more than 50 U.S. cities as they ratchet up pressure on McDonald’s Corp. and Wendy’s Co. to raise wages.
Thousands went on strike in cities including New York, Chicago, Los Angeles, Detroit, Milwaukee and Indianapolis, according to local organizers and the Service Employees International Union, which is advising the strikers. About 200 workers showed up at the two-story Rock N Roll McDonald’s store in Chicago’s River North neighborhood this morning chanting: “Hey hey, ho ho, poverty wages gotta go!”
The non-union workers are demanding the right to organize and wages of $15 an hour, more than double the federal minimum of $7.25. They now make $9 an hour on average, according to the Bureau of Labor Statistics. By simultaneously targeting the largest chains, including Yum! Brand Inc.’s Taco Bell and KFC, Subway and Burger King Worldwide Inc., organizers want to force a sector-wide response.
“What the workers are trying to do is hold the corporations accountable,” said Mary Kay Henry, SEIU president.
If the minimum wage were raised to $10.50, fast-food restaurants would see about 2.7 percent higher costs, according to a letter signed by economists in July in support of raising the federal minimum wage. The eateries could absorb those cost increases by raising menu prices and by allowing low-wage workers to get more of the business’s revenue, it said.
Protesters face long odds. Previous strikes haven’t had much impact, and turnout has been thin. Today, in New York and Chicago, passersby demonstrated little support for the workers and there were comments about $15 an hour being too high for entry-level jobs. Moments after protesters left a Wendy’s in downtown Manhattan, about 20 people piled into the store for lunch. When chanting strikers entered the Chicago McDonald’s, workers continued to pour coffee and bag food for a throng of customers. In a statement on its website, McDonald’s said all of its stores were open and operating normally.
Under agreements with the restaurant chains, the franchisees who own and operate most fast-food stores in the U.S. typically are responsible for hiring and wages. While they can raise prices to offset higher costs, they’re already under pressure to pay rent and royalties to the restaurant chains at a time when consumers remain reluctant to eat out.
Even if you could get thousands of store operators to sit down and agree to specific wage increases, the most they could afford is a raise of $1 an hour, spread over three years, said John Gordon, principal of Pacific Management Consulting Group, who has advised franchisees for 30 years.
Companies could help stores pay more by lowering royalties they charge franchisees, something Wall Street won’t tolerate because it would put pressure on profit, he said.
“It’s just so complicated,” Gordon said.
Spokesmen from McDonald’s and Burger King said employment matters are franchisees’ responsibility. Wendy’s, Subway and Yum Brands didn’t respond to requests for comment.
“The story promoted by the individuals organizing these events does not provide an accurate picture of what it means to work at McDonald’s,” Ofelia Casillas, a spokeswoman for the Oak Brook, Illinois-based company, said in an e-mail.
At this morning’s rally in Chicago, protesters wore red t-shirts emblazoned with “Fight for $15” and held balloons printed with the word “Unity.” Some chanted in Spanish.
Wendy’s employee Antoine McKinney, 27, was there he said because he needs more money to support his 4-year-old son who lives with him on Chicago’s South Side. He gets paid $8.35 an hour and has been cooking food and cleaning bathrooms at a downtown Wendy’s restaurant for about two years, he said.
“I struggle paying my bills,” McKinney said. “Even if we were getting paid $10 an hour, that would be better.”
By 10:45 a.m., about 150 protesters had gathered in Manhattan’s Zuccotti Park, scene of the Occupy Wall Street protests. With signs reading “On strike: wages too damn low,” they sang songs and marched a few blocks east to picket a Wendy’s location.
Whatever the impact protests have on companies, concerns are growing over income inequality in the U.S.
While the U.S. economy has recovered for households with a net worth of $500,000 or more, the recession is continuing for other groups, an April Pew Research Center study shows. The data, which underscores the nation’s growing income inequality, shows that wealthy households boosted their net worth by 21.2 percent in the aftermath of the recession that ended in June 2009, while the rest of America lost 4.9 percent.
Congress last voted to raise the minimum wage in 2007, and President Barack Obama’s call earlier this year to increase it to $9 an hour has gone nowhere with lawmakers.
“Inequality has steadily risen over the decades,” Obama said yesterday in a speech to commemorate the March on Washington civil-right rally in 1963. “Upward mobility has become harder.”
Labor unrest is almost unprecedented in the fast-food industry. The advocacy group New York Communities for Change originally was trying to halt planned school closings in low-income neighborhoods of Brooklyn. Organizers shifted focus after hearing fast-food jobs were keeping local residents poor, said Jonathan Westin, the group’s executive director.
“People were really struggling,” said Westin, who spoke with people living in Brownsville, Crown Heights and Flatbush in Brooklyn. “Probably the biggest employer in our neighborhoods was the fast-food industry.”
The SEIU got involved last year, organizing meetings and providing funding, Henry said. The first strike happened in November, when about 200 workers walked off the job in New York. Earlier this year, strikes popped up in Midwestern cities, including Chicago and Detroit.
“Franchisees are not part of the problem,” Henry said. “We want to go to the source, which is the multinational corporations that own these franchise relationships.”
The SEIU hasn’t contacted the companies, she said.
While winning the right to organize and make $15 an hour is “hard to visualize in this day and age,” the campaign is “raising public awareness, and at the very least it’s putting raising the minimum wage higher on the agenda,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor, and Democracy at University of California at Santa Barbara. “It’s important for social movements to set a new standard.”
Nicholas Williams, a 28-year-old McDonald’s worker in Indianapolis, has been looking for a second job because the $7.35 an hour he earns isn’t enough to buy food, pay bills and afford the daily $4 bus pass to get to and from his job.
“There are no good jobs hiring -- out here, it’s only fast food,” he said in an interview yesterday. Williams, who’s cooked fries and grilled burgers at the restaurant for about 17 months, was planning to strike.
“They don’t treat us with respect and they don’t treat us fairly,” he said. “I’m not going to work on Thursday.”
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