Fast-food restaurants are no strangers to warfare. The hamburger wars of the 1970s, waged through competitive advertising and brinksman-like slashing of prices, resulted a decade later in massive layoffs. Whether the newest campaign will yield even more casualties remains to be seen. The Associated Press reports:
Fast-food protests are underway in cities including New York, Chicago and Detroit, with organizers expecting the biggest national walkouts yet in a demand for higher wages.
Similar protests organized by unions and community groups over the past several months have brought considerable media attention to a staple of the fast-food industry — the so-called ‘McJobs’ that are known for their low pay and limited prospects. But it’s not clear what impact, if any, they will have on business.
At issue is the hourly salary currently earned by fast-food workers, many of whom earn the federal minimum wage of $7.25 an hour. Some protesters are demanding more than double that amount as well as the right to unionize, though most have more modest demands. Barack Obama has chimed on behalf of these workers, demanding an across-the-board increase to an hourly rate of $9.
One stumbling block to the plan is that the two largest fast-food empires, McDonald’s and Burger King, say they don’t make decisions about pay for the independent franchisees that operate the majority of their restaurants in the U.S.
Another is the logistical problem that has arisen throughout the American workforce since the implementation of the first phases of Obamacare. Namely, corporations can’t simultaneously increase employee payouts, whether they take the form of salary or benefits, and maintain the same number of workers. It is simply a mathematical impossibility from a business standpoint.
In the case of Obamacare, many companies have begun to cut back on worker hours, converting full-time jobs to part-time ones. The goal is to circumvent a provision in the law that mandates that businesses with 50 employees or more provide health coverage to employees beginning in 2014 or face stiff penalties.
In the case of fast-food restaurants, a mandated increase for all workers would require that management cut the number of jobs. A concomitant decline in the satisfaction customers, who would be confronted with longer lines and waits, would almost certainly ensue.