Fast Food Workers Protest For Increased Wages Ahead Of McDonald's Annual Shareholder Meeting

One week ago, the McDonald’s Corporation reported a 35-percent increase in profits (from $811.5 million in the period last year to $1.1 billion) in the quarter that ended 31 March. A few days later, former McDonald’s President and CEO Ed Rensi published an opinion piece in Forbes to explain why raising the minimum wage would be a huge mistake.

Let’s do the math: A typical franchisee sells about $2.6 million worth of burgers, fries, shakes and Happy Meals each year, leaving them with $156,000 in profit. If that franchisee has 15 part-time employees on staff earning minimum wage, a $15 hourly pay requirement eats up three-quarters of their profitability. (In reality, the costs will be much higher, as the company will have to fund raises further up the pay scale.) For some locations, a $15 minimum wage wipes out their entire profit.

Recouping those costs isn’t as simple as raising prices. If it were easy to add big price increases to a meal, it would have already been done without a wage hike to trigger it. In the real world, our industry customers are notoriously sensitive to price increases. (If you’re a McDonald’s regular, there’s a reason you gravitate towards an extra-value meal or the dollar menu.) Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee.

What Rensi doesn’t mention is that U.S. taxpayers are subsidizing McDonald’s profits.

As Ken Jacobs reports,

Workers like Terrence Wise, a 35-year-old father who works part-time at McDonald’s and Burger King in Kansas City, Mo., and his fiancée Myosha Johnson, a home care worker, are among millions of families in the U.S. who work an average of 38 hours per week but still rely on public assistance. Wise is paid $8.50 an hour at his McDonald’s job and $9 an hour at Burger King. Johnson is paid just above $10 an hour, even after a decade in her field. Wise and Johnson together rely on $240 a month in food stamps to feed their three kids, a cost borne by taxpayers.

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In fact, according to a study by Jacobs, Ian Perry, and Jenifer MacGillvary (pdf) for the UC Berkeley Labor Center, 52 percent of fast-food workers make so little that they’re are on some form of public assistance.*

That’s the social cost of McDonald’s (and other fast-food corporations’) private profits.

 

*Note also in the chart above the following observation about nominally non-profit higher education in the United States: “high reliance on public assistance programs among workers isn’t found only in service occupations. Fully one-quarter of part-time college faculty and their families are enrolled in at least one of the public assistance programs analyzed in this report.”

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The United States is characterized by increasing class segregation—as both a condition and consequence of growing inequality.

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We all know that the share of income going to the top 10 percent has steadily increased since the mid-1970s (from an already-high 33.41 percent in 1976 to an astounding 49.85 percent in 2014). That’s because a tiny group at the top has been appropriating a growing surplus and then distributing a large share of it to the other members of the top decile.

Now we know, thanks to recent research by Sean F. Reardon and Kendra Biscoff (pdf), that rising income inequality in the United States has been accompanied by increasing residential segregation by income:

Income segregation has increased over the last four decades, and has continued to increase in recent years. In large metropolitan areas (the 117 metropolitan areas with populations of 500,000 or more), the proportion of families living in neighborhoods with median incomes well above or below the median income of their metropolitan area has grown rapidly since 1970. . .In 1970, only 15% of all families lived in such neighborhoods, while 65% lived in middle‐income neighborhoods. By 2012, over one third (34%) of all families lived in either rich or poor neighborhoods, more than double the percentage in 1970. Over the same time period the proportion living in middle‐income neighborhoods declined from 65% to 40%.

And, they admit, this growing class segregation is not going to be easy to break:

In an era of very high income and wealth inequality, families have very different resources to spend on housing, and the housing market responds to this inequality in ways that exacerbate segregation. Given the importance of neighborhood contexts for children’s opportunities, and for shaping the experiences of the affluent, rising income segregation will likely only further exacerbate the economic inequality that has produced it. This self‐reinforcing cycle—where inequality begets segregation and segregation fosters inequality—will be hard to break.

Let’s call it the vicious cycle of class inequality and segregation.

As Thomas B. Edsall explains, that vicious cycle is both caused and reinforced by fundamental changes in the American social order and political system: from the fact that the increasingly segregated well-to-do have found ways of supporting and taking advantage of key services (health, education, job search and other opportunities) to aid themselves and their own children to the fact that (as Bernie Sanders recently reminded us) the top decile has been able to exercise much more influence over politics and policy (through voting and political donations) than its share of the electorate would suggest.

And, as we’ve seen in recent months, the combination of inequality and segregation has exacerbated tensions within the Democratic Party:

The “truly advantaged” wing of the Democratic Party. . .has provided the Democratic Party with crucial margins of victory where its candidates have prevailed. These upscale Democrats have helped fill the gap left by the departure of white working class voters to the Republican Party.

At the same time, the priorities of the truly advantaged wing — voters with annual incomes in the top quintile, who now make up an estimated 26 percent of the Democratic general election vote — are focused on social and environmental issues: the protection and advancement of women’s rights, reproductive rights, gay and transgender rights and climate change, and less on redistributive economic issues. . .

Sanders’s extraordinary performance to date. . .points to the vulnerability of a liberal alliance in which the economic interests of those on the top — often empowered to make policy — diverge ever more sharply from those in the middle and on the bottom.

As the influence of affluent Democratic voters and donors grows, the leverage of the poor declines.

Meanwhile, the vicious cycle of class inequality and segregation makes the rich richer, everyone else poorer—and the yawning gap between them continues to grow.

mike2may

Special mention

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We already knew that Millenials are “generation screwed.” Now we know, thanks to the latest Harvard Public Opinion Project survey, that the majority (51 percent) does not support capitalism—and even fewer (just 19 percent) identify as capitalists.*

It also seems the members of Generation Y don’t see socialism as the preferred alternative (only 33 percent support it)—but at least those who have participated in Democratic primaries have been voting overwhelmingly for the democratic socialist candidate.

 

*A subsequent survey that included people of all ages found that somewhat older Americans also are skeptical of capitalism. Only among respondents at least 50 years old was the majority in support of capitalism.

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This week marks the 100th anniversary of the world-historic Easter Rising in Ireland. And, here in the United States, we’re getting quite an education—first, with 1916 The Irish Rebellion, a big, lavishly produced slab of prestige television (with none other than Liam Neeson as the narrator), available on 120 television stations in the United States and on the BBC; then, on Sundance, with Rebellion, a soap-operaish version of the same events; and, finally,  A Full Life: James Connolly the Irish Rebel, a graphic remembrance of socialist agitator, editor, and author Connolly illustrated by artist Tom Keough.*

I’ve only seen the two television series, so I can’t comment on Keough’s book.

In my view, 1916 The Irish Rebellion does an excellent job of providing the necessary background (at least for those of us lacking the basic, Irish secondary-school-book knowledge of the events—although it tends to exaggerate the U.S. connection (highlighted in the trailer) and to downplay the egalitarian and socialist impulses in the Rising’s anti-imperialism (which, I presume, the Connolly book serves to correct). And while Rebellion is more an intimate recreation than a documentary (and does take historical liberties and shortcuts in dramatizing, I would say melodramatizing, the events), it does highlight the role of women among the forces for and against Irish independence.

Still, both television series serve to shine a spotlight on the short-lived and ultimately failed rebellion that showed to the rest of Ireland (beyond Dublin), the British Empire (for which this was the beginning of the end), and the rest of the world (in a wide variety of socialist, communist, and national-liberation movements) that the dream of making and changing history was embodied by and yet could not be contained within the “terrible beauty” of 1916.**

 

*Here’s the appropriate disclaimer: while 1916 The Irish Rebellion was largely financed by the University of Notre Dame and written by Notre Dame professor Bríona Nic Dhiarmada, I played no role in the creation or dissemination of the documentary.

**It is precisely that terrible beauty that is taken up in Ken Loach’s film, Jimmy’s Hall, which takes place in 1932 and focuses on the post-1916 political tensions among the Catholic church, the state, the landowners, and the republican movement.

huck4may

Special mention

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7000 and counting

Posted: 27 April 2016 in Uncategorized
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I just noticed that, according to WordPress (which keeps track of such things), I’ve published 7000 posts since I began this blog in mid-2009.

Hmmm. . .