Fast Food Strikes Go Global, But is the Goal Any Closer to Being Met?

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Published May 15, 2014

| FOXBusiness

U.S. fast food workers have been striking periodically over the past year-and-a-half for higher wages, and while they haven’t achieved their goal, they’ve gained global support.

The strikes, which call for a $15 minimum wage, have now gone global with workers walking off their jobs in 150 cities in 33 countries on Thursday.

Restaurants including McDonald’s (MCD), Wendy’s (WEN), Burger King (BKW)  and KFC (YUM) have experienced workers protesting for not only higher wages, but also the right to unionize without retaliation. The first strike took place in November 2012 in New York City, and according to FastFoodGlobal.org, the organization behind the protests, today’s workers were striking in Japan, Brazil, the United Kingdom and Italy, among others.

Closer to the Goal?

Employment Policy Institute Director Michael Saltsman says the strikers are no closer to hitting the $15-an-hour wage they are seeking than they were one year earlier, despite more widespread protests.

“This is for show, it’s meant to generate headlines,” Saltsman says. “This is the effort to create the appearance of momentum where no momentum exists. Even in a city that is far to the left in its politics realizes there are serious consequences associated with [a wage increase]. It will have a negative impact on the bottom rungs of the career ladder.”

Individual cities have had more success, Saltsman says, including Seattle which has proposed hiking the minimum wage to $15 over the next four to seven years depending on company size and current benefit offerings. It would be the highest minimum wage in the nation.

President Obama kicked off his promised “year of action” by hiking the federal minimum wage for new government contractors to $10.10 an hour in January. He continues to campaign for a hike in the federal minimum wage nationwide, which is currently $7.25 and hasn’t been raised since 2009.

James Sherk, senior policy analyst in Labor Economics at the Heritage Foundation, says fast-food work is meant to be temporary.

“The fast food industry is heavily composed of teens and college students, and of people who are not staying there long,” Sherk says.

“The average turnover is 150% in the industry, so people are leaving after eight months.”

And protesters are in the hundreds in the U.S., Sherk says, which is “hardly representative” of the industry as a whole.

“I feel this is largely a public relations campaign,” he says. “It’s less than one in 10,000 workers in the industry, and $15 makes $10.10 seem reasonable when you are otherwise calling for a 40% raise in the minimum wage. At a time of high unemployment, it seems pretty absurd.”

But Martin Rafanan, a community organizer in St. Louis for the “Show Me $15” campaign, says the move overseas is a show of support.

“Workers continue to ask for what they want,” Rafanan says. “They want $15 an hour and a union. The ongoing call for this is positive for a number of reasons. I think it’s wonderful that this has spread to 150 cities, and many of these workers are not striking, they are taking action in solidarity with us. They already make a living wage and want the same level of support from their company in the U.S. that they have overseas.”

He adds that McDonald’s mentioned public concern over income inequality as a “risk factor” facing the company in 2014 in an annual filing with the Securities and Exchange Commission is a positive sign for the movement.

“I am not sure if we can get to the table quickly with an organization like McDonalds soon, but we are closer down that path now than we were a year ago,” he says.

Consequences of the Hike

The Congressional Budget Office says that higher minimum wage could lead to between 500,000 and 1 million fewer jobs nationwide, according to Saltsman.

“There are better alternatives that you could get bipartisan support for,” he says. “Marco Rubio and Paul Ryan have talked positively about making changes to the Earned Income Tax Credit, which could provide a measurable impact for low-income families. But it’s an election year, so people like Harry Reid don’t have any interest in taking $10.10 off the table—it’s a political issue.”

Sherk claims higher minimum wages wouldn’t do much to help those in poverty. “It will be quite harmful, and lead to even greater job losses in the long-term,” Sherk says. “There will also be a minimum of 25% costs increases [for companies] leading to reduced sales, and that’s where the job losses come from.”

But Rafanan says the protesters don’t see job losses on the horizon, and instead are committed to forward movement, despite the long road ahead.

“They realize this is a long-term struggle to build community support,” he says. “But as we do that, we have the opportunity to win.”

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http://www.foxbusiness.com/personal-finance/2014/05/15/fast-food-strikes-go-global-but-is-goal-any-closer-to-being-met/