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What Can Europe Teach Us About Better Pay, Conditions at McDonald's?

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Fast food workers in New York City will stage a major rally today. Should they look overseas for inspiration?

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MINYANVILLE ORIGINAL Toward the end of a morning strike outside the Madison Ave. McDonald's (NYSE:MCD) last Thursday, a passerby, an older man in an overcoat, asked a young organizer what was going on.

"What's all this?"

"We're protesting McDonald's."

"Yeah, I see that. But why?"

The chipper organizer explained (with perhaps too well-rehearsed a response) that many McDonald's employees only make about $7 or $8 per hour, and face shortened schedules, fines, or suspensions from management when they try to organize. "We think people should be able to earn more when the company they work for makes billions," she said.

The man started walking off before the organizer could finish, muttering, "Yeah, but so do the shareholders."

Cynical, but at least his attitude was articulated, which was more that could be said for the other New Yorkers who passed the picketers without pausing. The fact that McDonald's, Wendy's (NASDAQ:WEN), Taco Bell (NYSE:YUM), and other fast food restaurants have been able to pay hard-working, loyal, and now much older employees wages at or slightly above state-set minimums for years has become, to many, a seemingly unchangeable norm.

To help mobilize the public, organizers behind last week's Fast Food Forward campaign -- spearheaded by New York Communities for Change, along with the Service Employees International Union, UnitedNewYork.org, and the Black Institute -- have given the media dramatic employee stories, tales that would make any feeling person irate. (Read about struggling workers Raymond Lopez and Pamela Waldron in this New York Times piece, or in the same paper, see the stories of two of last week's strikers -- New York and Brooklyn fast food employees, aged 79 and 29, who require food stamps to survive.)

Slowly, more consumers and some business pundits are becoming more vocal about the idea that change, and unionization, may be necessary. Since October, when hourly employees began striking at another major Dow Jones (INDEXDJX:.DJI) component company, Wal-Mart (NYSE:WMT), that campaign, called OUR Walmart, has attracted 20,000 Facebook followers. Fast Food Forward has managed to collected 125,000 signatures for its petition (circulating via various platforms) in only a week.
Courtesy of Fast Food Forward


Today the campaigners will stage a massive rally just after 4 p.m. EST in midtown Manhattan. Jonathan Westin, director of the Fast Food Forward campaign, told Minyanville in an email, "This is only the beginning of the movement. Our economy can't grow when workers can't afford to live. That's why workers from the fast food industry are joining with those at car washes, airports, and in retail to demand decent wages and the right to form a union."

According to the Bureau of Labor Statistics, New York's lowest-paid job category is "Combined Food Service and Preparation Workers, Including Fast Food." State Labor Department data shows that the city's fast food jobs have grown by more than 50% over the past 12 years. The median pay for fast food workers in New York City is about $9 an hour; which would equal pay of less than $20,000 per year for a full-time employee, and far less for part-time staff. In New York, the poverty line is set at $11,500 for a single person and $23,021 for a family of four.

But can the crew members of restaurants like McDonald's or Wendy's expect progress? Is there any place in the world where employees of the mega-chains are treated fairly? In fact, it is marginally better for food service employees in a few developed countries, though conditions are not yet ideal -- from the point of view of workers advocates, anyway -- anywhere.

The highest paid McDonald's employees in the world are in Western Europe, where collective agreements protect workers in the restaurant industry sometimes even when trade unions are not present. A 2012 National Bureau of Economic Research paper by Princeton economist Orley Ashenfelter found that in Western Europe from 2000-2007, the average crew worker at McDonald's earned 1.29x the wages of a US crew employee, the equivalent of $9.44 per hour versus $7.33 in the US. (Ashenfelter's paper was designed to measure real wages by comparing the number of Big Macs McDonald's employees in various countries could earn with their hourly wages. See coverage in The Atlantic for more.)

Outside big cities, that kind of a pay bump for American employees would be a start, though crew workers in the New York City region are pushing for salaries to be raised to $15 per hour, citing the high cost of living.

Dr Tony Royle, author of Working For McDonald's in Europe: The Unequal Struggle? (Routledge, 2000), and a lecturer at the J.E. Cairnes School of Business & Economics at the National University of Ireland, Galway, says that working conditions and employee treatment in those countries where collective agreements are in place are somewhat better than what's seen here, and the real value of wages was generally better in Europe than in the USA, with McDonald's workers in the Scandinavian countries doing much better than elsewhere. Nevertheless, many problems remain in Europe even where unions have fought and won collective agreements or where these have been automatically imposed.

Take Sweden. That country has a collective agreement that covers everyone in the sector. Under Swedish law, it's also easier than it is in the USA to establish a union and union membership is still the norm, with 70% of Swedish workers joining unions, Royle explains in a phone interview. "But even in Sweden, where you have a union official sitting in McDonald's head office, you have problems in terms of the union adequately representing workers. You don't have union officials in the stores, and the workers are usually economic migrants and young kids who don't know what their rights are. In many cases, they might not even know that there's an agreement in place," he says.
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