Article
The 'Fight for 15': Workers and restaurants battle for minimum wage
An already contentious issue, organizations including the International Franchise Association, the Service Employees International Union and others drafted statements explaining how they think the wage campaign will impact the industry.
April 15, 2015 by Nicole Troxell — Associate Editor, Networld Media Group
As protests erupted today in New York and other cities around the country over the 'Fight for 15' campaign to raise the minimum wage to $15 an hour, fast food workers marched the streets to voice their concerns.
An already contentious issue, organizations including the International Franchise Association, the Service Employees International Union, the National Restaurant Association, the National Council of Chain Restaurants and others issued statements explaining how they think the wage campaign will impact the industry.
A multi-faceted issue
The National Council of Chain Restaurants, a division of the National Retail Federation, responded to the demonstrations, stating an "excessive minimum wage" is disrupting communities by causing payroll and benefits cuts at local businesses.
Executive Director Rob Green said in a statement, "Not surprisingly, the leadership in organized labor refuses to acknowledge simple facts. First, the marketplace is working, as several major employers are taking steps to adapt to the improving job market by adjusting their wages and benefits for employees.
"Second, federal government wage mandates higher than local communities can afford do not help individuals earning a starting wage. In municipalities that have dictated an excessive minimum wage, some businesses have cut payrolls and eliminated benefits, while others are raising prices, and workers are losing their jobs. The job markets in Seattle or Sacramento are different than local conditions in San Antonio and Sandusky.
"Another simple fact is that paid union organizers conducting a multi-million dollar organizing campaign featuring street theater and other creative tactics are not creating jobs in communities around the country, except for their own."
The International Franchise Association, an organization representing franchise owners, agrees that the 'Fight for 15' is harmful to businesses and workers. The IFA said the SEIU 'Fight for $15' is misleading "the public and policymakers from the blatant and politically-motivated overreach of the National Labor Relations Board." The IFA views the move as an attempt by NLRB to expand its joint employer standard.
"Recently disclosed financial reports unequivocally prove these protests are nothing more than union-funded public relations stunts, serving as the backbone of one of the most egregious examples of government overreach in American history," said IFA President and CEO Steve Caldeira, CFE, in a statement.
"The SEIU can claim that the goal of these protests is to increase wages for workers," Caldeira added. "Unfortunately, the victims of the NLRB's overreach will be the workers, which these paid protests are supposedly designed to help, and the elimination of opportunities for aspiring employees and entrepreneurs to own franchise businesses. By terminating local control of franchise businesses through an expanded joint employer standard promulgated by a pro-union government agency, the only winners are union leaders and the policymakers beholden to them."
According to fast food worker and protestor Jumal Tarver, a 36-year old employed at a franchised McDonald's in Manhattan, reliance on public assistance is necessary
to get by, which he attributes to his wage of $8.75 an hour.
"It's hard for me to provide for my daughters with $8.75," he said in the Reuter's article.
Although fast food chains such as McDonald's, for example, are responding by raising wages, the amount is typically less than protestors believe they need get out of poverty, the article said.
Echoing these thoughts is a study released by Restaurant Opportunities Centers United that outlines what the organization calls the "public cost of the full-service restaurant industry's low wages." The study points to the "sub-minimum wage" of full-service workers who make $2.13 an hour, a wage that has remained frozen since 1991.
The study concludes that "nearly half of the families of full-service restaurant workers are enrolled in one or more public-assistance programs," ultimately costing taxpayers more than $9 billion per year. The ROC study also reports that restaurant workers, most of whom are women, as a whole live in poverty at twice the rate of the overall workforce at 20.9 percent.
ROC organized demonstrations outside the National Restaurant Association's Public Affairs Conference in Washington D.C. April 14th and 15th, according to an NRA spokesperson. The demonstrations are part of a coordinated attack by national labor unions and allies to denigrate an industry that has no barriers to employment and "no limit to what employees can achieve," an industry that is the fastest growing in the nation and creating jobs across the country, the NRA said.
A studyby University of Massachusetts-Amherst Department of Economics and Political Economy Research Institute Professors Robert Pollin and Jeanette Wicks-Lim, published in January 2015, concluded that the fast food industry "could fully absorb" wage increases of $15 an hour over a period of four years based on several factors.
Wage increases would reduce turnover rates and increase sales growth, the study found. Through modest price increases over the four-year period, fast food restaurants would not have to lower their average profit rates. The research found that stores would not have to "reallocate funds generated by revenue away from any other area of their overall operations, such as marketing."
A studyconducted by Arindrajit Dube, associate professor of economics at the University of Massachusetts-Amherst, published in 2010 by the Institute for Research on Labor and Employment, University of California-Berkeley, concluded that an increase in the minimum wage would have no negative impact on employme. The study attempts to explain conflicting results in existing minimum wages studies and ultimately found that by using local comparisons to control for heterogeneity in employment growth, more reliable estimates can be made in this kind of research. The research concluded "no detectable employment losses" from minimum wage increases already seen in the U.S.
But the American Action Forum, a "center-right" policy institute according to its website, found in its study from December 2014 that "labor market costs of raising the minimum wage far outweigh any budgetary benefits." In response to the claim that restaurant workers are costing taxpayers money by depending on welfare benefits, the organization said the labor market consequences would offset the comparatively minimal fiscal savings that would result. The study concluded that raising the minimum wage to $10.10 an hour would reduce government benefits spending by $7.6 million while U.S. job reduction would increase by 2.2 million a year, a loss of $19.8 billion in annual earnings from resulting unemployment.
A simple preparation
Whatever changes are ahead, Cheng-Cohen, a law firm representing franchisors, encourages restaurants to prepare by making simple updates to their employee manuals.
Based on the NLRB General Counsel's report, released in March, on basic employee rights, the firm emphasizes updating employee handbooks to reflect "provisions which his office (the General Counsel) deemed lawful," namely that of Section 7 of the National Labor Relations Act. The firm provided the chart below in light of the "ever-aggressive stance being taken by the NLRB":
Topic | General Counsel's Position on Law | "Unlawful" Provision |
Confidentiality | Employees not only have a right to protest their wages and working conditions, but they also have the right to share information in support of those complaints. | "Discuss work matters only with other employees who have a specific business reason to know or have access to such information." |
Conduct Toward Company and Supervisors | Employees have a right to criticize or protest their employer's labor policies or treatment of employees, even if statements made are false (unless maliciously false) or defamatory. | "Refrain from any action that would harm persons or property or cause damage to the Company's business or reputation." |
Conduct Toward Fellow Employees | Employees have a right to argue and debate with each other about unions, management, and their terms and conditions of employment. | "Do not make insulting, embarrassing, hurtful or abusive comments about other company employees online, and avoid the use of offensive, derogatory, or prejudicial comments." |
Interaction with Third-Parties | Employees have a right to communicate with news media, government agencies, and other third parties about wages, benefits, and other terms and conditions of employment. | "All inquiries from the media must be referred to the Director of Operations in the corporate office, no exceptions." |
Use of Company Logos, Copyrights and Trademarks | Employer proprietary interests are not implicated by employees' non-commercial use of a name, logo or other trademark to identify the employer in the course of Section 7 activity (for example, on picket signs). Handbook rules cannot prohibit employees' fair protected use of that property. | "Do not use any Company logos, trademarks, graphics, or advertising materials in social media." |
Taking Photographs and Making Recordings | Employees have a right to photograph and make recordings in furtherance of their protected concerted activity, including the right to use personal devices to take such pictures and recordings. | "Taking unauthorized pictures or video on company property is prohibited." |
Conflicts of Interest | Employees have a right to engage in concerted activity to improve their terms and conditions of employment, even if that activity is in conflict with the employer's interests. | "Employees may not engage in any action that is not in the best interests of the Company." |
About Nicole Troxell
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