Fast Food News – October 30

Published October 30th, 2014 -  - 10.30.141


This post is part of an ongoing of series on the fast food organizing movement. You can read all our Fast Food News here.

In response to this week’s this week’s New York Times’ report on fast food wages in Denmark, Vox took a closer look at what the impact of a $20 an hour minimum wage would be in the United States, and according to their calculations the results are not beneficial. According to Vox, the standard of living for American fast food workers would assuredly rise, but roughly 65% of them may loose their jobs. This conclusion is reached based on the number of McDonald’s per million inhabitants – 16 in Denmark, 45 in the United States. In order to remain profitable, the article believes roughly two-thirds of McDonald’s restaurants would need to close, leading to higher wages for those in the industry, but a much smaller number of workers in fast food as is seen in Denmark. The question then is what would happen to those workers and what education, training, labor market, and regulation policies could be made to allow the United States to maintain a low level of unemployment without reliance on low-wage, low-productivity fast food jobs.

However, Vice President Joe Biden’s former chief economist, Jared Bernstein, was more skeptical of the argument that America is fundamentally different than Denmark in his opinion piece for the Washington Post. While conceding that Denmark and the United States are indeed different markets, but the gap between pay in the two countries is simply too large to be explained by market fundamentals. What Bernstein believes is actually influencing this outcome are factors such as relative union power, profit-margin differences, acceptance of higher prices for higher wages, and a cultural commitment to a living wage. In Denmark, where unions cover nearly 70% of all workers, the employer must agree to pay a living wage in order to avoid unrest. That pay comes with a higher price for items like Big Mac’s, but the price differential is dwarfed by the wage difference, as a Danish McDonald’s employee can buy nearly twice as many Big Mac’s than can the American employee. In essence, according to Bernstein, our model supports higher profit and higher inequality, leading to external costs associated with working in poverty, whereas our Danish counterparts internalize that cost by paying a higher wage and higher prices.

According to Politico “Morning Shift,” NLRB General Counsel Richard Griffin told an audience at West Virginia University that the agency has yet to decide whether to issue a complaint naming McDonald’s a joint employer with franchisees. However, Griffin conceded that the legal argument could be fraught for the NLRB, as the standard for determining who is or isn’t an employer post-1984 would face significant legal obstacles. A full recording of Griffin’s talk can be found here.

The Hill reports that Commerce Secretary Penny Pritzker has yet to find one business executive in the 1,300 she has spoken with who opposes the Obama administration’s plan to raise the minimum wage to $10.10. According to Secretary Pritzker, the problem is not one of the wage level itself, but that the policies are so drastically different in each state. Instead, these businesses would like a national, uniform policy set by the federal government.

CNN reports that Chipotle workers have filed class action lawsuits in Colorado and Minnesota within the past two months alleging wage theft. The workers claim that the restaurant’s time keeping system would automatically punch them out at 12:30 a.m., even though they had to stay later to finish cleaning up, thus requiring them to work off the clock and without pay. Chipotle has declined comment beyond affirming that they abide by all applicable labor laws.

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