How Restaurant Lobby Blocks Living Wage for Fast Food Workers
If you ask most Americans about the NRA, they will think of the National Rifle Association. But another powerful industry trade group bearing those initials, the National Restaurant Association, conducts its own campaign of duplicitous lobbying and outright deception at the expense of the public interest.
Restaurants employ more than 13 million workers, so it is no surprise that industry lobbyists are paid a lot of money to ensure this workforce remains disempowered. The NRA, which has a staff of 750 people, spent more than $4 million in 2012 alone currying favor in Washington, D.C. But with recent fast-food strikes and restaurant workers increasingly speaking out against low wages and other forms of labor exploitation, the mask of the other NRA is slowly peeling away.
You have to hand it to an industry that has figured out how to keep the federal minimum wage at $7.25 an hour, where it has been stuck since Congress approved the last increase in 2007. Before that, the minimum wage languished at $5.15 for a decade. (Congress has raised the rate just three times in 30 years.) For someone working full time, the current minimum equals $15,000 a year — about the poverty level for a family of two. According to federal labor statistics, fast-food preparers make $9 an hour on average. By way of example, in Los Angeles, a living wage for an adult with one dependent is about $23 an hour.
Even more shocking is the so-called tipped minimum wage (for workers who rely on tips), which has been frozen at $2.13 since 1991. Women are especially affected by these low wages. While 52 percent of all restaurant workers are women, 66 percent of tipped workers are female, essentially creating a legalized form of gender discrimination, as the Restaurant Opportunities Center United points out. (Be sure to watch ROC United’s videos of restaurant workers explaining their plight.)
In their strikes over the past year, fast-food workers called for wage increases to $15 an hour, which is more in line with our economic growth (and with other nations’ wages). But the NRA warns ominously that such “dramatic increases” would stunt job growth and increase prices, especially of so-called value meals. Despite the fact that most Americans favor an increase in the federal minimum wage — like the proposal pending in Congress to raise the federal minimum to $10.10 an hour — the NRA is willing to defy and deceive the public to resist an increase.
The NRA is extremely powerful at the state level, working in conjunction with local lobbying groups to spin tales of economic woe. In this handy map from June, the NRA color-coded, state-by-state, its efforts to keep workers in the poorhouse. As the trade group boasts, most of the 29 state bills proposing minimum-wage hikes failed. Even in the two states where minimum-wage laws passed, the restaurant lobby won significant concessions. For example, in New York, the final bill that passed excluded tipped workers, thanks to secret, last-minute dealmaking. And where local jurisdictions might dare to consider citywide policies to help workers — such as in San Francisco; Portland, Ore.; Seattle and Washington — the NRA has been waging campaigns to pre-empt such laws at the state level.
So how do these restaurant industry lobbyists defy both democracy and common decency? Through a well-executed campaign of deception, which helps give politicians cover for keeping workers in poverty.
‘We represent mom-and-pops’
The NRA, like many industry trade groups, loves to paint itself as representing small businesses because this plays well politically. But in reality, the NRA’s most influential members are the largest corporate chains. Brands like McDonald’s, Burger King and Wendy’s spend millions on advertising to ensure that they are (and remain) household names, but when it comes to policy matters, they prefer to hide behind their lobbyists.
McDonald’s CEO now makes about 580 times what a full-time minimum wage worker makes.
At a Senate hearing on the proposed minimum-wage hike in March, the NRA pretended that independent restaurant owners are the face of the industry. But according to Saru Jayaraman, director of the Food Labor Research Center at the University of California at Berkeley, the financial health of the Fortune 500 companies that dominate the NRA’s membership “does not bear any resemblance” to the trade group’s mom-and-pop rhetoric.
‘Restaurants are an economic engine’
The NRA touts restaurants as an “economic engine.” But guess who helps pick up the slack for low wages? Taxpayers, in the form of government programs like food stamps, which workers rely on to make ends meet. A recent study showed that the 10 biggest restaurant chains (representing 2.25 million workers) account for nearly 60 percent of the almost $7 billion in public costs stemming from low wages. This is a form of corporate subsidy and what economists like to call a market failure because of the need for government intervention. McDonald’s is the industry leader in workers on the government dole, costing taxpayers $1.2 billion annually. Meanwhile, the fast-food leader enjoyed $5.5 billion in profits in 2012.
‘We can’t afford it’
The NRA whines incessantly about how its members cannot possibly afford to pay higher wages. Yet the same top-10 chains taking advantage of government assistance for their workers earned a combined $7.44 billion in profits in 2012. By the NRA’s own projection, restaurant-industry sales will top an astonishing $660 billion in 2013. Meanwhile CEOs at leading chains are raking in obscene amounts of money. McDonald’s CEO Don Thompson made a cool $13.8 million in 2012. The pay gap between McDonald’s CEO and its minimum-wage workers has grown in recent years, from a multiple of 230 two decades ago to a multiple of 580 in 2012. In other words, McDonald’s CEO now makes about 580 times what a full-time minimum wage worker makes.
‘Food prices would skyrocket’
A tried-and-true argument against government regulations of any kind is that consumers would suffer higher prices — the copious profits mentioned above notwithstanding — but economic analysis has shown that raising the minimum wage to $9.80 an hour would result in food cost increases of only about 10 cents per day. Also, the economists who signed an open letter supporting a minimum hourly wage of $10.50 (PDF) estimated that McDonald’s could cover half the cost of the increase (from its current average of $7.81 an hour) by raising the price of a Big Mac by just a nickel.
‘These are entry-level jobs’
The restaurant lobby claims that fast-food jobs are mostly for teenagers. In response to the recent strikes, the NRA claimed that most of these workers are under age 25. While technically correct, according to the Center for Economic Policy and Research, teens represent only about 30 percent of the workforce, and 30 percent are 20 to 24. More than a quarter of fast-food workers are raising a child. The NRA also claimed that just 5 percent of fast-food workers earn the minimum wage. But research shows that a full 13 percent of fast-food workers earn the federal minimum.
Emotional scare tactics like these may prove effective for corporations and their lobbyists, but behind the deceptions are employees who suffer every day as a result of the restaurant industry’s exploitation. The time has come to give workers the dignity they deserve by paying them a living wage.
Besides, it would be good for the economy. Contrary to industry spin, research shows that recent minimum-wage increases have not resulted in job losses, even during the recession. To the contrary, wage hikes boost the economy, creating more jobs. Giving workers more spending power increases demand for goods and services, which stimulates the economy and the labor market overall. To boot, major companies, Costco, for example, have proved that paying higher wages is compatible with business success.
In other words, corporations like McDonald’s and Wendy’s may even sell a few more burgers and shakes — to their own workers.
Michele Simon is a public health lawyer, president of Eat Drink Politics, and author of the report, “Food Stamps, Follow the Money: Are Corporations Profiting From Hungry Americans?”