With the full backing and financial support of some of America’s largest unions, including the Service Employees International Union (SEIU), demonstrations were held at a variety of fast food restaurants across the county, such as McDonald’s, Wendy’s and Kentucky Fried Chicken. Big Labor claimed that the coordinated effort was a grassroots worker movement aimed at securing a $15 minimum “living wage” for the restaurants’ employees. In fact, relatively few fast food employees participated. The demonstrations were largely rent-a-mobs paid for by union bosses and some of their Occupy Wall Street-type allies.
The irony is that the unions know that the nature of most fast food work does not demand double the minimum wage and that if they are successful many of these workers will lose their jobs.
The campaign against fast food chain restaurants is being manufactured by the labor movement. Fast food workers are pawns in a game aimed at increasing union membership.
- Hector Barreto
Jobs at fast food restaurants are, by and large, entry-level, part-time and second jobs. When the worker demonstrates that they can do a good job or they graduate from school, they move up the ladder or on to higher paying work. This is why there is enormous turn-over in the industry and unions have historically had difficulty organizing them.
Labor heads enjoy publicly demonizing the fast food chains as multi-national conglomerates that can afford to pay to their workers a $15 minimum wage. Unfortunately, they fail to mention that the vast majority of fast food chain restaurants, roughly 85 percent of them, are franchises whose owners cannot afford to pay $15 an hour. A small Subway franchise that has gross annual sales of $365,000 will have a net profit after expenses (food and franchise royalty, rent, insurance, taxes, salaries, etc.) of roughly $59,000 a year. And from that profit the owner has to set aside tens of thousands of dollars for renovations and re-decorating expenses every five to seven years, which is required by its franchise agreement. This is why many owners work in their own restaurant and own several to spread the risk and get a better return.
Requiring fast food chains to pay $15 an hour would lead to a massive shift in the service industry to automation. More restaurants will rely on automated services to cut down on the high costs of labor. In turn, this would lead to a lower demand for labor in the market, in which case, many workers would be left without jobs.
The real question at hand is why Big Labor is spending enormous sums of money on these nationwide protests if the result will harm workers and contribute to undermining a critical element of the American economy: the availability of entry level low skilled jobs. Unions are not naïve nor are they ignorant of the likely impact of their efforts should they prove successful. It is because union membership continues to decline — it is now only 6.6 percent of the private sector and is beginning to shrink in the public sector, as more states move to strengthen their economies through right-to-work laws that give workers the option of not having to be a union member as a condition of employment.
Thus, the fast food industry is an ideal target for Big Labor. Its hundreds of thousands of workers provide the potential for tens of thousands of new dues-paying union members. Many of the protest materials admit as much. They disclose that the campaign against the fast foods chains is not about a wage increase, it is about organizing workers for the unions.
Big Labor bosses are fighting for their own survival and willing to go to extreme lengths to protect their interests even if their actions are not in the best interests of the workers they claim to champion. They mislead the public and deceive the media into believing that these demonstrations are spontaneous “organic” worker protests when they are anything but that. As some news outlets have reported, the demonstrators are paid to demonstrate and the relatively few workers who go out on “strike” are paid by the unions for doing so. It has also been reported that the SEIU has even hired several communications firms, paying out millions in 2012 alone, to put on this street theatre.
The campaign against fast food chain restaurants is being manufactured by the labor movement. Fast food workers are pawns in a game aimed at increasing union membership. If successful, it is American workers and the availability of them to access short-term, entry-level work that will pay the price.
Hector Barreto is the former head of the Small Business Administration.