Revolution in the burger bar

By Peter Huck

Fastfood workers around the world-including in New Zealand-are unitingto fight for better pay and conditions.

Demonstrators take the protest inside at a McDonald's restaurant in Huntington Park, California, as they press their demands for higher pay and accuse bosses of "wage theft". Photo / AP
Demonstrators take the protest inside at a McDonald's restaurant in Huntington Park, California, as they press their demands for higher pay and accuse bosses of "wage theft". Photo / AP

When failed Republican presidential candidate and multimillionaire asset-stripper Mitt Romney said this week that he supported an increase in the minimum federal wage to US$10.10 ($11.63), as advocated by President Barack Obama, you knew the sounds of discontent from America's growing underclass must have penetrated the hallowed sanctuaries of the very rich.

Not that Obama's proposal, the Minimum Wage Fairness Act, went anywhere. It was blocked by Senate Republicans last month and the wage remains at US$7.25 an hour.

Meanwhile, the push-back against inequality, started by Occupy Wall Street with the "we are the 99 per cent" call to arms, is spreading across the United States.

This week, fastfood employees in 150 US cities went on strike, demanding the right to join a union and a US$15 an hour minimum wage.

They were joined by solidarity actions in at least 33 nations, including New Zealand, making it the first global protest by fastfood workers [see #fastfoodglobal].

It "was just the beginning of an unprecedented international fastfood worker movement", promised Ron Oswald, general secretary of the International Union of Food, which represents 12 million workers and 396 unions in 126 nations.

He warned that the "highly profitable global industry better take note".

The protests began in New York in November 2012. They had spread to 50 American cities by August last year, and 100 in December.

Protesters have also picketed Walmart, the world's largest retailer, and fastfood sellers McDonald's, Taco Bell, Papa John's and Domino's Pizza have been targeted by class action lawsuits. There are already signs that grassroots action is having an effect. Last week Seattle, a traditional liberal bastion, signed a US$15 minimum wage deal that will give about 100,000 city workers a pay raise.

Despite determined opposition from the Chamber of Commerce and the National Restaurant Association, other cities may follow, after San Jose in California proved a year ago that paying a good wage helps improve staff loyalty and improve profits.

But the National Council of Chain Restaurants has dismissed "a few scattered protests ... that hardly amounts to a nationwide strike or movement".

Given the snowballing effects of 18 months of labour discontent, this seems unwise. Activists see the protests as a new civil rights movement for low-wage workers, many from minorities, spawned by an anaemic economic recovery and glaring inequality.

Labour trends in the US suggest they have the numbers. Fastfood workers, plus those in home health care and retail, will probably be the fastest growing job market in the next decade. Many are exempt from workplace protections.

A National Employment Law Project study found "employment growth during the early recovery was heavily concentrated in lower-wage industries and occupations".

Low-end jobs, paying US$9.48 to US$13.33 an hour, account for 22 per cent of job losses during the recession but 44 per cent of new hiring, 1.85 million more than in 2008.

Mid-range jobs (US$13.73-US$20), once 37 per cent, are now 26 per cent. Higher wage jobs (US$20.03-US$32.62), once 41 per cent, are now 30 per cent. It is a dramatic slide to the bottom.

"A growing proportion of the economy will depend on low-wage labour," says Catherine Ruetschlin, a policy analyst with Demos, a public policy group in New York.

"That means we'll see a growing population of workers with a shared interest in making sure their workplace conditions are fair."

Ruetschlin's Demos report, Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy, written this year, found the average chief executive made US$26.7 million in 2012 and the average worker made US$19,000, a 1200-to-1 chasm.

During the past decade, chief executives' wages soared 400 per cent. Their workers' rose 0.3 per cent.

Many workers live in poverty and need public help, such as Medicaid and the Children's Health Insurance Programme, a tax benefit to employers of US$7 billion a year between 2007 and 2011.

The traditional view of fastfood staff is of teenagers working an entry-level job as they pursue the American Dream of boundless social and economic advancement, a Norman Rockwell vision encouraged by the industry, which talks of "opportunity".

The reality is different. In the post-recession climate, when jobs are scarce, the person flipping burgers is likely to be between 25 and 54 - 29 is the average age - is often not white and may have a college degree.

As well as being paid poorly, US workers are prey to "just-in-time" scheduling - called "zero-hour contracts" in Britain - meaning they do not have fixed working hours and are always on call, a nightmare for those juggling childcare or other jobs.

"The central issue is the hours worked," says Joe Carolan, a senior executive with Unite, which attracted attention at a IUF summit in New York last week because it unionised New Zealand's fastfood industry from the bottom up.

The big surprise for Unite in New York was that Denmark and Brazil have guaranteed 40-hour weeks for fastfood workers.

Carolan says franchises use rosters as "disciplinary weapons", reducing workers' hours by hiring new people and slashing hours for existing staff.

Then there is "wage theft", where workers are cheated by employers.

In a Hart Research poll this April, 89 per cent of fastfood workers said they had been shortchanged, raising the possibility of US labour violations.

Wage theft is endemic in many low-wage jobs. A report last year from the Economic Policy Institute, a left wing think tank, found employers stole US$185 million from staff in 2008, about US$2634 a person - more than triple the total haul from petrol station, bank and convenience store robberies in 2009.

Seven class action lawsuits in three states accuse McDonald's of fudging time sheets on computer systems. The litigation is unusual as it targets the parent company, which supplies computers, and the franchises - about 90 per cent of McDonald's US outlets - that use them. Traditionally, the franchise system has been a divide-and-rule strategy that hinders unions and lawsuits.

"It's been very difficult to organise fastfood workers even though they share the same grievances across locations and particular companies," says Ruetschlin.

"The delivery drivers suing Papa John's aren't much different to the delivery drivers suing Domino's Pizza. But it's been impossible for them to organise together to say this is an industry-wide problem."

Such tales have stoked concern in the International Monetary Fund and the World Economic Forum about the wider effects of brazen inequality. It also means labour unrest will stalk US politicians during an election year.

Ultimately, greed at the top becomes an economic cancer. As domestic consumption drives 70 per cent of US economic activity - a vital component of the global economy - it makes no sense to impoverish consumers. Inequality diminishes the tax base, reduces investment and cripples upward mobility.

In his Capital in the Twenty-First Century, French economist Thomas Piketty warns that the yawning gulf between rich and poor threatens democracy. He says only state intervention, such as a wealth tax, can arrest a slide towards plutocracy.

Fast food staff are now in that struggle's front line.

- NZ Herald

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