McDonalds is using government subsidies like food stamps and Medicaid to maximize its bottom line.
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The burgeoning battle between fast-food workers and their employers over low wages and benefits was ratcheted up a notch this week with the leak of a phone conversation from a McDonald’s employee helpline in which a longtime employee was advised to go on food stamps in order to make ends meet.
Fast-food employee advocacy group Low Pay Is Not OK posted a video on its website on Wednesday featuring a recording of a phone call made by McDonald’s employee Nancy Salgado to McResource, a phone line for McDonald’s employees to call for information about housing, child care and other resources.
Salgado, 27, a single mother of two children, has worked full-time at McDonald’s for the last decade but says she has never received a raise from her $8.25 an hour salary, the minimum wage in Chicago, where she lives.
She was having difficulty paying her bills and feeding her kids, so when she heard about the McResource phone line at a recent meeting with her fellow employees, “it caught my attention,” she told Al Jazeera in a phone interview. “I need help, so I wanted to see what kind of help they can provide for me.”
Salgado said she wanted to record the phone call – she disclosed this to the representative who answered her call, who said that was fine – and asked about how she might obtain medical benefits or get help paying her heating bill. She also told the representative, who asked whether Salgado had children, that she was “rationing food” in order to feed her kids.
The representative offered to connect Salgado with a number of federal benefit programs for which she was eligible, including Medicaid, a medical care program for low-income adults and their kids, and the Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps.
Salgado said she was surprised the company advised her to seek government benefits, and didn’t address her current salary or benefits situation. “I feel very angry. I wasn’t expecting to get the number for government assistance,” she said. “I was expecting they’d give me some other kind of answer.”
She added, “I believe that I work for one of the richest companies that can afford to pay better wages to their workers.”
McDonald’s, for its part, told Al Jazeera in an email message that “this video is not an accurate portrayal of the resource line as this is very obviously an edited video.”
Salgado emphatically denied that the call was edited. “That’s what I did, and those are the answers I got,” she said.
Al Jazeera was sent an audio file of what appears to be the full recording of Salgado's 15-minute phone conversation with the McResource line. While the video posted by Low Pay Is Not OK is only two minutes long and contains only short audio excerpts of that call, the main points of the phone conversation did not appear to have been misrepresented.
During the call, the help line operator tells Salgado that franchises must pay a fee for their employees to be able to use the McResource line.
“None of the restaurants that are franchised in Chicago are on [the McResource line],” the representative said. “Because of that, we don’t provide a service to employees of restaurants that aren’t signed on. We’re just so busy with people where the restaurants have paid to be part of the service."
Instead, she offered to email Salgado the contact information for federal benefit programs and apologized that -- because the franchise by which she was employed was not signed onto the McResource line -- she couldn't sign Selgado up for the benefits herself. “We can do a lot of the legwork that takes a lot of the stress off you, making a million phone calls trying to find services," the rep said.
Recent research has found that more than half of the employees of the nation's fast-food companies require public assistance to make ends meet, at an annual cost of between $3 and $7 billion to the U.S. taxpayer.
When asked whether McDonald’s requires franchises to pay for the McResource service, the company did not directly address the question, and simply wrote in an email: “The fact is that the McResource Line is intended to be a free, confidential service to help employees and their families get answers to a variety of questions or provide resources on a variety of topics including housing, child care, transportation, grief, elder care, education and more.”
Asked whether Salgado should receive a raise or health benefits, McDonald’s wrote: “McDonald’s and our independent franchisees provide jobs in every state to hundreds of thousands of people across the country. Those jobs range from entry-level part-time to full-time, from minimum wage to salaried positions, and we offer everyone the same opportunity for advancement.”
Falling behind
Low wages in the fast-food industry are nothing new. Front-line fast-food workers earn a median hourly wage of $8.94, according to the National Employment Law Project (PDF). Those front-line positions make up 89.1 percent of all the jobs in the industry. And the Center for Economic Policy Research says that fast-food workers make less than the federal minimum wage of $7.25, and more than 25 percent are raising at least one child.
But the need to seek government assistance to supplement their wages hits fast-food workers particularly hard.
“It’s not that these workers are not working enough, because the problem doesn’t go away even when they’re out working full time,” said Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at the University of California – Berkeley.
In fact, Allegretto and a group of labor economists from U.C. Berkeley and the University of Illinois at Champaign-Urbana released a report earlier this month (PDF) in which they found that 52 percent of fast-food workers rely on public assistance. That’s compared with 25 percent of the rest of the population.
Those supplemental benefits for fast-food workers cost the government about $7 billion annually, according to the report, which Allegretto called “a conservative estimate.”
Fast-food workers, for their part, have increasingly started speaking out about their low wages. The fast-food employee union Fast Food Forward organized a protest of around 200 employees in the New York City area last November, which inspired a day of coordinated strikes in more than 60 cities nationwide on Aug. 29.
In response to those strikes, Scott DeFife, vice president of policy and government affairs at the National Restaurant Group, released a statement saying that the protests were “a coordinated campaign engineered by labor organizations and partisan groups to attack our industry and for their own political and financial gain.”
Allegretto said fast-food companies like McDonald’s routinely argue that profit margins at their franchisees are too narrow to afford raises for their employees, but that in reality, the corporation could just charge its franchisees a little less so they’d be able to pay their employees more.
“This idea that somehow they can’t afford to pay more seems a little bit ludicrous in light of their profits," she said. “Somehow when it comes to this issue (wages), they separate themselves from their franchisees, but they control everything that the franchisees do.”
The scenario could worsen next week when the boost to SNAP benefits from the 2009 Recovery Act run out on Nov. 1. The House of Representatives recently voted to cut $49 billion from the program over the next 10 years, which would cause millions of people to lose their benefits, though the Senate hasn’t yet approved the plan.
The fact that so many fast-food workers are forced to rely on programs like SNAP, Allegretto says, “is indicative of a much larger problem that we have in our economy, which is that low-wage workers are following further and further behind.”
Al Jazeera
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The burgeoning battle between fast-food workers and their employers over low wages and benefits was ratcheted up a notch this week with the leak of a phone conversation from a McDonald’s employee helpline in which a longtime employee was advised to go on food stamps in order to make ends meet.
Fast-food employee advocacy group Low Pay Is Not OK posted a video on its website on Wednesday featuring a recording of a phone call made by McDonald’s employee Nancy Salgado to McResource, a phone line for McDonald’s employees to call for information about housing, child care and other resources.
Salgado, 27, a single mother of two children, has worked full-time at McDonald’s for the last decade but says she has never received a raise from her $8.25 an hour salary, the minimum wage in Chicago, where she lives.
She was having difficulty paying her bills and feeding her kids, so when she heard about the McResource phone line at a recent meeting with her fellow employees, “it caught my attention,” she told Al Jazeera in a phone interview. “I need help, so I wanted to see what kind of help they can provide for me.”
Salgado said she wanted to record the phone call – she disclosed this to the representative who answered her call, who said that was fine – and asked about how she might obtain medical benefits or get help paying her heating bill. She also told the representative, who asked whether Salgado had children, that she was “rationing food” in order to feed her kids.
The representative offered to connect Salgado with a number of federal benefit programs for which she was eligible, including Medicaid, a medical care program for low-income adults and their kids, and the Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps.
Salgado said she was surprised the company advised her to seek government benefits, and didn’t address her current salary or benefits situation. “I feel very angry. I wasn’t expecting to get the number for government assistance,” she said. “I was expecting they’d give me some other kind of answer.”
She added, “I believe that I work for one of the richest companies that can afford to pay better wages to their workers.”
McDonald’s, for its part, told Al Jazeera in an email message that “this video is not an accurate portrayal of the resource line as this is very obviously an edited video.”
Salgado emphatically denied that the call was edited. “That’s what I did, and those are the answers I got,” she said.
Al Jazeera was sent an audio file of what appears to be the full recording of Salgado's 15-minute phone conversation with the McResource line. While the video posted by Low Pay Is Not OK is only two minutes long and contains only short audio excerpts of that call, the main points of the phone conversation did not appear to have been misrepresented.
During the call, the help line operator tells Salgado that franchises must pay a fee for their employees to be able to use the McResource line.
“None of the restaurants that are franchised in Chicago are on [the McResource line],” the representative said. “Because of that, we don’t provide a service to employees of restaurants that aren’t signed on. We’re just so busy with people where the restaurants have paid to be part of the service."
Instead, she offered to email Salgado the contact information for federal benefit programs and apologized that -- because the franchise by which she was employed was not signed onto the McResource line -- she couldn't sign Selgado up for the benefits herself. “We can do a lot of the legwork that takes a lot of the stress off you, making a million phone calls trying to find services," the rep said.
Recent research has found that more than half of the employees of the nation's fast-food companies require public assistance to make ends meet, at an annual cost of between $3 and $7 billion to the U.S. taxpayer.
When asked whether McDonald’s requires franchises to pay for the McResource service, the company did not directly address the question, and simply wrote in an email: “The fact is that the McResource Line is intended to be a free, confidential service to help employees and their families get answers to a variety of questions or provide resources on a variety of topics including housing, child care, transportation, grief, elder care, education and more.”
Asked whether Salgado should receive a raise or health benefits, McDonald’s wrote: “McDonald’s and our independent franchisees provide jobs in every state to hundreds of thousands of people across the country. Those jobs range from entry-level part-time to full-time, from minimum wage to salaried positions, and we offer everyone the same opportunity for advancement.”
Falling behind
Low wages in the fast-food industry are nothing new. Front-line fast-food workers earn a median hourly wage of $8.94, according to the National Employment Law Project (PDF). Those front-line positions make up 89.1 percent of all the jobs in the industry. And the Center for Economic Policy Research says that fast-food workers make less than the federal minimum wage of $7.25, and more than 25 percent are raising at least one child.
But the need to seek government assistance to supplement their wages hits fast-food workers particularly hard.
“It’s not that these workers are not working enough, because the problem doesn’t go away even when they’re out working full time,” said Sylvia Allegretto, a labor economist and co-chair of the Center on Wage and Employment Dynamics at the University of California – Berkeley.
In fact, Allegretto and a group of labor economists from U.C. Berkeley and the University of Illinois at Champaign-Urbana released a report earlier this month (PDF) in which they found that 52 percent of fast-food workers rely on public assistance. That’s compared with 25 percent of the rest of the population.
Those supplemental benefits for fast-food workers cost the government about $7 billion annually, according to the report, which Allegretto called “a conservative estimate.”
Fast-food workers, for their part, have increasingly started speaking out about their low wages. The fast-food employee union Fast Food Forward organized a protest of around 200 employees in the New York City area last November, which inspired a day of coordinated strikes in more than 60 cities nationwide on Aug. 29.
In response to those strikes, Scott DeFife, vice president of policy and government affairs at the National Restaurant Group, released a statement saying that the protests were “a coordinated campaign engineered by labor organizations and partisan groups to attack our industry and for their own political and financial gain.”
Allegretto said fast-food companies like McDonald’s routinely argue that profit margins at their franchisees are too narrow to afford raises for their employees, but that in reality, the corporation could just charge its franchisees a little less so they’d be able to pay their employees more.
“This idea that somehow they can’t afford to pay more seems a little bit ludicrous in light of their profits," she said. “Somehow when it comes to this issue (wages), they separate themselves from their franchisees, but they control everything that the franchisees do.”
The scenario could worsen next week when the boost to SNAP benefits from the 2009 Recovery Act run out on Nov. 1. The House of Representatives recently voted to cut $49 billion from the program over the next 10 years, which would cause millions of people to lose their benefits, though the Senate hasn’t yet approved the plan.
The fact that so many fast-food workers are forced to rely on programs like SNAP, Allegretto says, “is indicative of a much larger problem that we have in our economy, which is that low-wage workers are following further and further behind.”
Al Jazeera
