Restaurant industry organizations respond to widespread strikes

Aug. 29, 2013 | by Alicia Kelso
Restaurant industry organizations respond to widespread strikes

The QSR strikes began nearly a year ago in New York City, and have since expanded to several cities throughout the country within the past year. Today, however, those efforts culminated with a nationwide, 60-city walkout of employees who are asking for a wage increase to $15 an hour.

Industry organizations have responded to the accelerated strikes, calling the employees' requests everything from a "PR stunt" to "unrealistic."

Bonnie Riggs, a restaurant industry analyst, has concerns about the implications of raising the minimum wage at this particular time.

"These last several years have been a challenge for restaurant operators. The industry has lost 1.76 billion visits since 2008 and our forecast isn't particularly bright in terms of strong restaurant traffic growth over the next decade. It would be difficult for the fast food segment, which represents 78 percent of total industry traffic, to absorb a wage hike," she said.

Riggs said the likely result of such a wage increase would be operators having to pass those extra costs onto consumers, which would then affect visits.

"Since we continually track restaurant traffic, we know that in 1979 and 1980 when operators increased prices because of high inflation, visits declined by double-digits," Riggs said.

Scott DeFife, the executive vice president of Policy and Government Affairs for the National Restaurant Association, said the organization welcomes a national discussion on wages, and pointed out the low percentage of employees in the industry who make the minimum wage.

"The restaurant industry is the nation's second largest private sector employer (with more than 13 million Americans employed) and our industry is an industry of opportunity. Nine out of 10 salaried restaurant workers, including owners and managers, started as hourly workers. The fact is, only 5 percent of restaurant employees earn the minimum wage and those that do are predominantly working part-time and half are teenagers," he said.

Efforts orchestrated by labor unions?

Since employees are asking for both a wage increase and the "right to form a union without retaliation," some organizations believe these spreading strikes are the result of a deeper motive from union groups. The National Retail Federation, of which many restaurant chains are members, released a statement, calling today's nationwide strikes "theater orchestrated by organized labor, for organized labor."

Bill Thorne, SVP of the NRF, said the employees can unionize already, but since they're not yet, unions are "paying high-priced public relations firms and work centers to conduct labor activities, which would otherwise be prohibited by unions themselves." The National Labor Relations Act does guarantee employees the right to organize unions and to strike, regardless of whether the employees are represented by unions.

He adds that the walkout is a "publicity stunt" by "big labor to disparage the minimum wage employees by attacking their companies."

"It is not in the best interest of any business to spend money to recruit, train and then penalize employees. Retail and restaurant companies pay competitive wages and many offer additional benefits. Likewise, a large number of managers in these same companies started as part time or hourly employees themselves," Thorne added.

The International Franchise Association also chimed in, claiming that the requested $15-an-hour wage is "unrealistic."

"Mandating increased wages would lead to higher prices for consumers, lower foot traffic and sales for franchise owners, and ultimately, lost jobs and opportunities for employees to become managers or franchise owners," said International Franchise Association President and CEO Steve Caldeira. "The franchise industry is a proven job creator and career builder, yet efforts to double the minimum wage to $15 would clearly jeopardize opportunities for existing and prospective employees."

Also, despite the deep roster of cities represented in today's strike effort, the National Council of Chain Restaurants' Executive Director Rob Green questioned the movement's real impact.

"A few scattered protests organized by outside labor groups hardly amounts to a nationwide 'strike' or movement," Green said.

"The vast majority of fast-food workers across the country are committed to their jobs and realize that the restaurant industry provides an important first step into the world of work as well as long-term career opportunities," Green said. "These orchestrated 'strikes' and walkouts create headlines but do nothing to foster serious discussion about effective policies to create jobs in today's still-struggling economy."

Read more about today's strikes here. Also, here are some tips on what to expect, provided by employment attorneys.

Read more about operations management.

Photo provided by Fast Food Forward's Facebook page.

Topics: Operations Management, Staffing & Training, Trends / Statistics

Alicia Kelso
Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine. View Alicia Kelso's profile on LinkedIn

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