FAST FOOD WORKERS ON STRIKE - IN FREE FALL



Seems ironic and maybe even appropriate that we offer this post on Labor Day.  Whether our timing bad or good, on occasion our Human Resources (HR) genes get stimulated to the point we are motivated to comment about current issues we feel should be engaged by folks that care about Fairness, Equal Opportunity and the ultimate truth - Reality.  One such issue was the strike outside McDonald’s, Burger King and other fast food restaurants in many US cities last week by some fast-food workers protesting what they feel are unfair wages.  Whole Foods, an enlightened company with a reputation for paying generous wages and with an upward mobility demeanor, confusingly, was even a target of this group?

 

In a nutshell the strikers want to see minimum wages raised from the mostly $7.25 (some US cities and states are higher) to $15.00 - more than doubling their wages essentially putting them at the same level with their supervisors.  So, what’s the issue?  Is it the compelling, moral – the humanitarian question of “fairness” and a “living wage” or another borne of a market driven economy, business necessity and a long term business model?  The answer is that it’s both.  We caution, don’t trust anyone that leads with skewed metrics, their emotions and class warfare “them vs. us” mentality.  Anybody who feels that they (or anybody else) are “entitled” to a job that pays a living wage is delusional – completely out of touch with principles of individual responsibility and our business reality.

 

We think (if they’re really serious) that any move to increase the minimum wage to such an extent could have disastrous consequences, especially for the workers lobbying for those increases.  We note that while there are persuasive arguments both for and against such an increase, we counsel caution and remind anyone interested that business just doesn’t operate that way.  Yea, we know that there are college graduates flipping burgers and bussing tables, but that’s not the fault of fast-food.  Seems that some wacko, ultra-left-leaning liberal think tankers feel that if a job incumbent has greater skills than the job requires, then they should be paid more.  We have also seen tweaked studies with dubious metrics that insinuate that previous increases in the minimum wage have had a positive effect on the economy and haven’t resulted in the elimination of jobs.  That’s only partially true noting that those previous increases have been of a much smaller magnitude over short periods of time.

 

Simply put, jobs are rated in the marketplace – not the people who occupy and perform in those positions. Wages are not arbitrarily or capriciously set.  HR compensation analysts review and evaluate, among other factors, the knowledge, skills, education, work experience, and capabilities required for a position then rate those essential requirements of the job with a dollar amount – the wage generally interpreted as a range from min to max with a control or median point.  So, because a worker has to stand during their shift among their other duties, isn’t as some state, a compelling reason to pay them $15.00. You don’t equate skilled and unskilled positions.

We empathize with those “overqualified” college graduates occupying fast food slots because of the current economic environment.  If some made poor choices preparing for non-existent jobs in industries on the wane, you can’t blame fast food or any other industry.  We also feel for those individuals who because of individual circumstance or, frankly, a lack of education or motivation didn’t or couldn’t properly prepare themselves for the very potential of living.  However sympathetic I feel and however tragic their situation, that’s no reason to increase the wage.   Rather, we should all celebrate that these jobs even exist and are available. Having said that, degrees in hospitality/restaurant management won’t guarantee ultimate well-paying jobs.  Those mostly reside in upper management and ownership though there are also substantial risk factors present there…

 

Moving on…We don’t think current food service wages “unconscionable” as opined by New York City Comptroller John Liu.  We think his and many other comments supporting the worker’s strike are politically motivated and totally unrealistic. This whole movement would appear to be the result of attempts by organized labor and specifically the Service Employee International Union (SEIU) to bolster their ranks.  With protests occurring in over 60 US cities, this effort has been well planned and orchestrated with the SEIU providing financial support and training.

 

Now, do we agree that you can’t support a Family on minimum wage?  We absolutely do and readily acknowledge that the employment landscape has substantially changed in the last twenty-five years.  We also note that while many fast food workers are primary wage earners and thus engaged in the impossible task of supporting a Family, the greater majority are not.  Many more in fast food are secondary wage earners or folks starting their career and gaining valuable work experience they can carry forward. Yes, I washed pots in a restaurant one summer but worked my way up to the line.

 

Let it be said that many companies pay well above the minimum wage.  When I was an HR Director in Hospitality/food service and Manufacturing, we always rated our jobs well above that minimum so that we would attract and retain a higher quality worker. We coupled those wages with generous benefit programs. Those strategies worked and we became a preferred employer of choice who always pursued best practices and provided an unequalled quality product/service.  The point is that companies, then and now, have choices based on their business models and available resources.  The fast food industry has very narrow margins and not a lot of dollars to play with when it comes to wages and benefits.  We also need note that the median wage for fast-food workers is just under $9.00 per hour.

 

Fast food is a whole other animal and perhaps the message for those in that industry is - engage it as your situation and needs dictate. Most in that industry as in hospitality are generally in transition with the intent to pursue other careers, even on the professional level.  If you want to pursue a career in food service, perform at a high level, take advantage of mentoring and educational programs and understand the skills necessary to create further opportunities and then build those skills.  I know many in food service who have done just that.

 

We all have choices.  If those engaged in fast-food don’t like what their employers pay – that they have greater worth - they are free to leave in a mostly at-will work environment and find another job that meets their expectations.  If a motivated worker doesn’t have the skill levels to proceed further – what greater stimulus exists to pursue those skills, add them to their portfolio and market themselves accordingly. Failing that, those that don’t have the motivation or means to improve their lot – well, it going to be a long and rough ride. As one blogger recently opined, “Demanding a living wage, is like demanding respect. Both have to be earned.” And, unfortunately, fairness doesn’t have anything to do with this issue…

 

We repeat - If one fails to perform at any level above “performs to expectation”, doesn’t pursue educational degree or certificate conferring courses, doesn’t engage communication / leadership or other job-related skill building activities, fails to embrace the communication/language requirements in their area – they are destined to tread water and, at best, stay in place.  Jobs/positions in today’s marketplace rated with low or no requisite skill level requirements are compensated at the lowest levels, period.  The higher the skill and educational requirements, the higher a position is rated.  We are addressing positions that are classified as low (or no) skill, entry level positions.

 

We have a very competitive market driven, global economy where the mostly value-driven customer decides what they are willing to pay for a product/service.  If a product is perceived to have too high a cost the consumer will go somewhere else or lose interest altogether in that product.  We have already seen that happen.

 

Some opine that if we increase the minimum wage to $15.00 that the economy will be further stimulated with job creation and a more robust economy - the result.   If you believe that I have some swamp land to sell you…  The result will be a product that can’t be produced at a marketable level.  Companies will cut back (some shut down) and jobs will be reduced or eliminated. To think otherwise is absolutely irresponsible…

 

Whether or not the minimum wage is increased, available weekly work hours are apparently going to be reduced to something less than 30 hours by some companies – an unintended consequence of the Affordable Health Care Act (AHCA) effective in January, 2015.  Indeed, the AHCA requires employers with 50 or more workers to provide health care benefits to Associates who work at least 30 hours a week or more.  Now, we hear that some fast-food companies are saying they can’t afford that cost, so are limiting their Associates to a maximum of 30 hours. We do know that some companies including Whole Foods and Starbucks provide benefits for their part-time Associates. We’ll keep you posted but we have already seen some major companies limiting weekly hours and this has to factor into this whole debate…

 

We suspect that there will always be fast food if for no other reason than the convenience (grab and run) factor.  However, when high cost trumps all else and the potential of buying a sit down meal in a more hospitable and congenial dining environment is equal and mostly better, fast food will suffer.  There are already moves toward a more assembly line approach, regional kitchens and reduced in-store services.  When was the last time fast food staff poured your beverage?  Believe me; they’re working on more cost saving measures as I write.

 

No one believes that there will be an overnight acceptance of a $15.00 minimum wage but in an assured pay me now or pay me later scenario, we will all pay for the misfortune of those who can’t make a living wage via government support. So, out of which pocket do we pay?  That’s the real question…  Maybe those fast food workers should strike for $1,000 an hour.  Now wouldn’t that have quite an impact on our economy? We think a much more modest increase in the minimum wage should be passed.

 

Having communicated the aforementioned, we also offer that we want the folks that prepare and serve our food, work on our cars and our doctors to be highly competent, well paid and of the highest character…

 

What a conundrum…   So, which pocket is it?

 

Aye,

 

Ned Buxton