Fast food workers’ nationwide strikes, walkouts, and protests have accelerated the push for raising the federal minimum wage to a $15 national level. The highly visible protests on December 5, 2013 were the latest in a series of protests organized by Fast Food Forward, Fight for 15, Low Pay Is Not OK, and others. The week before Labor Day, fast food workers also staged protests around the nation. The campaign is supported by the Service Employees International Union (SEIU), which has compensated workers who walked off their jobs. These workers could hardly afford the loss of a day’s pay.
Recent protest actions focus on the low wages paid to fast food workers and store clerks employed by stores like Wal-Mart. The actions have come at a time when raising the federal minimum wage from $7.25/hour is being discussed on the national level, with support given by President Obama in his December 4 address on economic equality, and is to be considered by Congress early 2014, as promised following Senate approval of the military authorization for 2014.
Regarding Wal-Mart, the biggest profiteering corporation in the country, their record of opposing unionization by their “associates” by every means conceivable, including flagrant violations of workers’ rights, is well documented. In fact, only a couple of days ago, the National Labor Relations Board issued a complaint against the company for unlawfully retaliating against or threatening workers who took part in strikes and protests in 14 states over the last two years. This occurred in 17 of Wal-Mart’s stores and included, among other things, the firing of 19 employees.
The fast food protests are targeted at the nation’s largest employers with the highest profits, best-paid Chief Executive Officers (CEOs), the greatest number of low-paid workers —and the hugest taxpayer expenses. McDonald’s cost the U.S. taxpayers $1.2 billion annually in back-door subsidies in the form of government assistance for these low paid workers, as documented by the National Employment Law Project. McDonald’s true colors were further exposed by the ridiculous suggestion that their employees should break their food into small pieces to suppress their hunger, as seen on the McResources webpage. (It is reminiscent of Ronald Reagan’s assertion that catsup is a vegetable on students’ lunch plates.)
The Minimum Wage
The current federal minimum wage was set in 2009, and does not reflect inflation rates of today’s economy. (Note: On January 1, 1981, President Jimmy Carter signed legislation raising the federal minimum wage from $2.30 to $3.35 an hour. But he rejected the proposal, strongly backed by labor, to index minimum wage to inflation. So far as we know, it has never been indexed to inflation.)
Full-time fast food workers earn an average yearly income of $15,000. Had the minimum wage kept pace with inflation or average wages over the past nearly 50 years, it would be about $10 an hour; had it kept pace with the growth in average labor productivity, it would be about $17 an hour, as cited by the editorial board of the New York Times, in “Fast-Food Fight,” (8/7/13).
On December 5, 2013 protests occurred in dozens of cities including Atlanta, New York City, Boston, Los Angeles, Oakland, St. Louis, Detroit, and Cleveland. in Chicago, Fight For Fifteen, led a rally at McDonald’s Restaurant at 6:15 A.M. and marched, chanting, “We can’t survive on $8.25,” which is the minimum wage in Illinois. In Washington D.C. McDonald’s workers and other fast food workers situated inside the Smithsonian Museum walked off their jobs to join the national strikes.
The typical fast food worker is no longer the teenager with a part time job. Today’s fast food workers are mainly adults, many in their 20s and raising a child. Recent studies conducted by the University of Illinois and the University of California indicate that 68% of fast food workers are sole providers for their families. Nationally, 88% of workers receiving minimum wages are adults. The National Women’s Law Center revealed that over seven million children live in minimum wage households.
The studies also reveal that 52% of fast food workers are receiving at least one form of government assistance. The ten largest fast food companies cost taxpayers an estimated $3.9 billion in government health assistance and $1.04 billion in food assistance annually, as reported by the University of California, Berkeley Labor Center.
Fast Food Industry Making Astronomical Profits
Profits are high for the fast food industry. The same ten companies receiving back-door government subsidies secured profits of $7.4 billion last year, as documented by the National Employment Law Project. McDonald’s Corporation reported $1.5 billion in profits last quarter, up five percent from the previous year.
Fast food giants are also getting away with huge tax breaks. Under the current tax code, corporations can deduct unlimited amounts of “performance pay,” including stock option gains and bonuses paid to CEOs. So, the more a company pays a CEO, the lower their tax liability.
Meanwhile, CEOs enjoy lucrative salaries. Yum Brand’s (operators of Taco Bell, KFC, and Pizza Hut) CEO David Novak pocketed $94 million for two years, 2011 and 2012, in “performance pay.” Novak’s $94 million payout lowered Yum Brand’s IRS bill by $33 million, another hidden expense for the rest of us taxpayers. In the past two years, the CEOs of the top six publicly held fast food chains deducted more than $183 million in “performance pay,” lowering their companies’ IRS bills by an estimated $64 million. The Institute for Policy Studies director of Global Studies (IPS) Sarah Anderson said this amount is “enough to cover the average cost of food stamps for 40,000 American families for a year.” The top six publicly held fast food chains are McDonald’s, Yum, Wendy’s, Burger King, Domino’s and Dunkin’ Brands, as calculated by the IRS.
McDonald’s received the second-largest government handout for their executive pay, $41 million. This performance pay deduction translates into a $14 million taxpayer subsidy for McDonald’s.
The performance pay loophole would be capped at $1 million for all executive pay deductions if the Reed-Blumenthal bill is made into law, introduced by Senators Jack Reed (D-RI) and Richard Blumenthal (D-CT). The Joint Committee on Taxation estimates this legislation would generate more than $50 billion over 10 years.
The Way Forward
We urge the formation of labor/community coalitions in every city and state in the nation that independently of any political party advances a program that promotes the interests of the 99%, not the 1%. Such coalitions should support an increase in the minimum wage to $15 per hour and give all-out support for the fast food workers, whose periodic demonstrations have put their struggle on the face of the map. Their strategy of creative street actions sets an example for the entire labor movement, essential for an effective fightback against corporate greed and exploitation.
As an essential component in the fight for a higher minimum wage and solidarity with fast food workers, the labor movement can play a pivotal role. Below is a resolution unanimously adopted on January 13, 2014 by the San Francisco Labor Council, AFL-CIO.
We urge that this resolution be modified by other labor councils to fit local needs and adopted widely.
Whereas, inequalities continue to grow with the top 1% now taking 95 percent of all new income (whereas in the Bush era they took 65 percent and in the Clinton era they took 45 percent); and
Whereas, the cost of living in San Francisco is one of the highest in the nation; and
Whereas, the San Francisco minimum wage of $10.74, which takes effect in January, 2014, is insufficient for a family to attain a decent standard of living in a city as expensive as San Francisco; and
Whereas, in California the lowest-income families pay the highest rate of state and local taxes while the richest 1 percent pay the lowest rate (California Budget Project); and
Whereas, the unions in the Seattle area recently campaigned for a ballot initiative mandating a $15 per hour minimum wage in a community outside Seattle, and the voters passed the proposition; and
Whereas, according to The New York Times, these unions view their success “as a potential model for raising wages and mobilizing workers in other parts of the country;” and
Whereas, the AFL-CIO has referred to the SeaTac action as a “victory” and reported approvingly that, “Now working family activists in Washington State are hoping to ride the success of the SeaTac vote to Seattle and they’ve found support from the mayor and the majority of City Council members”;
Therefore be it resolved that the San Francisco Labor Council go on record in support of a $15 per hour minimum wage in San Francisco, and the San Francisco Labor Council will oppose any minimum wage law that includes “tip credit;”
And be it further resolved that the San Francisco Labor Council encourage its member unions to pass in their locals resolutions supporting a $15 per hour minimum wage in San Francisco;
And be it further resolved that the San Francisco Labor Council help organize a broad-based coalition of unions and community allies to spearhead a campaign to bring the $15 minimum wage to San Francisco.
Submitted by Ann Robertson, CFA; Alan Benjamin, OPEIU 3; Allan Fisher, AFT 2121; Rodger Scott, AFT 2121; Linda Ray, SEIU 1021; Kathy Setian, IFPTE 20; Carl Finamore, IAM Local 1781; Tom Lacey, OPEIU 3; Francesca Rosa, SEIU 1021