Fast-Food Workers of the World, Unite! Fast-food workers face a struggle to get pay of $15 an hour and a union. The average pay for counter workers is $8.70

Fast-Food Workers of the World, Unite!

By Susan Berfield December 05, 2013

The campaign by fast-food workers to raise the industry’s minimum wage to $15 an hour and unionize has gathered momentum so quickly it has surprised even some of the organizers at the Service Employees International Union, which is underwriting it. A year ago, a group of workers protested at dozens of restaurants in New York. On Dec. 5, workers were expected to rally in about 100 cities.The prospects for unionizing an industry with about 200,000 restaurants, most owned by franchisees, and workers who don’t stay in their jobs for long remain daunting. “Attention is oxygen for these groups, and they’ve been very good at getting attention. But that’s very different from getting collective bargaining rights,” says Ruth Milkman, a labor expert at the City University of New York who supports the drive. The SEIU says workers aren’t organizing the traditional way—restaurant by restaurant, vote by vote—and they don’t yet know what their union would look like. “It’s not predetermined what form this will take,” says Mary Kay Henry, SEIU’s president. “We would be creating something new.”

The fast-food industry employs about 3.9 million people, making it one of the most rapidly growing workforces in the country. Flipping burgers was once a part-time, entry-level job for young people who soon moved on. In today’s fragile economy, that’s no longer the case. The average wage for a counter worker, according to national data, is $8.70 an hour—the federal minimum is $7.25. A recent report by researchers at the University of California at Berkeley, funded by labor organizers, found that only 23 percent of fast-food workers are under the age of 19. It also calculated that fast-food workers and their families relied on nearly $7 billion worth of public assistance from 2007 to 2011.

Crystal Travis, 28, a single mother of two, has worked at a Burger King (BKW) in Richmond, Va., for three and a half years. Making $8.25 an hour, she lives in public housing and receives food stamps; her kids are on Medicaid. She plans to join the protests. “I can’t sit there and not do anything,” she says. “I want $15 an hour and a union. It’s important to have both. It’s not just about money; it’s about respect.” Workers such as Travis “don’t believe they can get $15 an hour without being able to bargain with employers directly,” Henry says. As for the issue of turnover, Henry points to the union’s success organizing janitors, health-care workers, and others with even more employee turnover.

Fast-food executives remind people that it’s the franchisees who determine employees’ wages, yet they also take credit for the opportunities those jobs offer. Franchisees own about 90 percent of McDonald’s (MCD) more than 14,000 U.S. restaurants. “McDonald’s and our owner-operators are committed to providing our employees with opportunities to succeed. We offer employees advancement opportunities, competitive pay, and benefits,” Lisa McComb, a spokeswoman, said in an e-mail. Organizers suggest otherwise. “The franchisee relationship is a smokescreen so corporations don’t have to take responsibility for paying more,” Henry says. “Every detail of food preparation is centralized. With that level of coordination, workers believe that corporations could figure out how to pay them more.”

That elicits a fierce response from the chains and their franchisees. “All the responsibility to provide a living wage falls on us,” says Stephen Caldeira, the president of the International Franchise Association. “They want to blow up the model that continues to create jobs faster than most other industries.” Scott DeFife, an executive vice president of the National Restaurant Association, says of the SEIU: “They are arguing for manufacturing wages in a part-time service-economy job.” Both say higher wages would lead to more automation, fewer jobs, higher costs, and lower sales. “Workers would genuinely like to have something that looks like a union,” says Nelson Lichtenstein, a professor of history at the University of California at Santa Barbara. “That’s not going to happen. What is going to happen: They’ll create the context for cities and states to pass legislation raising the minimum wage.”

Meanwhile, the organizers plan to keep generating enough attention to embarrass management right to the bargaining table. “We know it’s going to take a long time to get what we want,” Travis says.

The bottom line: Fast-food workers face a struggle to get pay of $15 an hour and a union. The average pay for counter workers is $8.70.

Berfield writes about retailers, restaurants, and other consumer companies for Bloomberg Businessweek. Follow her on Twitter @susanberfield.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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