Fast Food Labor Strikes: What Will Happen If Workers Have It Their Way
byDec 10th 2012 11:50AM
Walmart (WMT) laborers aren't the only ones protesting low pay. Fast-food workers are also joining the movement.
In late November, more than 200 workers at Burger King (BKW), Wendy's (WEN), McDonald's (MCD), and several other fast-food restaurants went on strike in New York. According to one of the organizers, Jonathan Westin, this was only the beginning of a larger campaign.
So, what's their beef? Let's start with pay.
Many fast-food workers are paid at or slightly above the minimum wage of $7.25 per hour. The median annual income for these employees is around $18,230.
Defenders of the fast-food industry support these wages by saying the jobs are meant to serve as a stepping stone for individuals trying to gain training and experience that will allow them to land better jobs down the road.
But according to reporting by The Atlantic, the people asking you if you want fries with your meal aren't often youngsters just starting out. The article cites Bureau of Labor Statistics data that states that the national median age of fast-food workers is over 28, and for women -- who occupy up to two-thirds of the positions at fast-food restaurants -- the median age is over 32.
More than 43 percent of workers earning less than $10 per hour already have some college education. Also, nearly 70 percent of U.S. jobs don't require education beyond the high-school level -- a figure that the Labor Department claims is unlikely to change much over the next 10 years.
This makes it difficult for low-wage employees to use these service jobs as a stepping stone to better careers -- and doubly so if there aren't even enough high-skill jobs to go around.
Higher Pay, Higher Recognition
Some argue that the only way we can address poverty problems in our country is by raising the wages of these service jobs. And that is part of what the protesters are trying to do -- demanding a minimum of $15 per hour.
Westin claimed that last week's strikes demonstrated to workers that they could strike without losing their jobs, and predicted that this would lead to increased employee involvement in future protests and build momentum for the movement.
Slower Service, Higher Prices?
If Westin is right, protesters may not have to rely on supportive consumer sentiment to level a hit against their employers' bottom lines.
At one McDonald's location, Westin reported that 14 of the 17 employees scheduled to work on the day of the strike decided to join the protest. The obvious result is that when protests take place, customers' fast food won't get to them particularly fast, which may drive them to consider other options even if they side with the business.
But what if the protesters' demands are met -- how will that affect your pocketbook?
According to one estimate, a 20 percent pay raise for workers would cost average fast-food restaurants between 1 percent and 2 percent of their revenue. And what if the protesters' demands for $15-an-hour wages (from the current $7.25 average) are met? Doubling wages doesn't mean that food costs will double. All else being equal, this pay increase would cost these businesses 5 percent to 10 percent of their revenue -- increases that might ultimately be passed on to consumers.
Now that you know about fast-food workers' grievances, and the effect their protests may have on you, what do you think of their demands? Chime in below!
Motley Fool contributor M. Joy Hayes, Ph.D. is the Principal at ethics consulting firm Courageous Ethics. She owns shares of McDonald's. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services recommend Burger King Worldwide and McDonald's.