McDonald's,
the Corporate Welfare Moocher
By Jake Johnson in Common
Dreams
A recent New York
Times editorial — accompanied by the catchy
headline, "At McDonald’s, Fat Profits but Lean
Wages" — noted precisely what its title implies: That a company
posting large profits is still failing to pay its workers a livable wage.
This, of course, is nothing new: In fact, Fight for $15 began,
as the movement's website notes, "with just a few hundred fast food
workers in New York City, striking for $15 an hour and union rights."
The movement has since become a nationwide force, pressuring
state governments, along with the federal government, to contend with wage
inequality that, as the Economic Policy Institute reported earlier this year, has been
steadily rising for over 35 years.
The Times begins
its editorial by noting that McDonald's "has reported a 35 percent
increase in profits for the first quarter of 2016, an unexpectedly large gain
driven in part by its recent decision to sell Egg McMuffins all day long."
McDonald's, of course, is not the only culprit here. Throughout
the United States, productivity has grown while wages have leveled off — a
scenario that leads inevitably to greater profits for the few while everyone
else works longer hours with little to show for it.
"From 1973 to 2014, net productivity rose 72.2
percent," the Economic Policy Institute has
found, "while the hourly pay of typical workers essentially
stagnated—increasing only 9.2 percent over 41 years (after adjusting for
inflation)."
CEO pay, in contrast, has continued to soar: As
Lawrence Mishel and Alyssa Davis have observed, "From 1978 to 2014,
inflation-adjusted CEO compensation increased 997 percent, a rise almost double
stock market growth and substantially greater than the painfully slow 10.9
percent growth in a typical worker’s annual compensation over the same period."
But the Times noted
another interesting and crucial point, one that is seldom discussed: Namely,
the issue of what is often called corporate welfare.
While the conservative right is content to shame poor mothers for receiving federal
assistance, rarely do they dare call, say, General Electric or Walmart
"welfare queens," despite the fact that they receive enormous direct
and indirect taxpayer subsidies year after year.
This is true for McDonald's, as well: The Times observes, "Through it
all, taxpayers continue to pick up the difference between what fast-food
workers earn and what they need to survive. An estimated $1.2 billion a year in taxpayer dollars
goes toward public aid to help people who work at McDonald’s."
What is highlighted here is a kind of indirect subsidy
McDonald's enjoys because of its refusal to pay workers a livable
wage. Why raise the wages of these workers or provide them with benefits, the
argument goes, if the taxpayer is there to provide "the difference between
what fast-food workers earn and what they need to survive"?
And why reward workers of little stature when you can reward
influential executives and fat-cats instead?
A study by the National Employment Law
Project, released last year, uncovered the disparity between executive
compensation and average worker pay that has been the result of such an
approach.
"The fast-food industry is marked by two extremes,"
the study begins. "On the one hand, the leading companies in the
industry earn billions in profits each year, award chief executives
generous compensation packages, and regularly distribute substantial
amounts of money in the form of dividends and share buybacks."
Then there's the other extreme: "At the same time, the
overwhelming share of jobs in the fast-food industry pay low wages
that force millions of workers to rely on public assistance in order to
afford health care, food, and other basic necessities."
As many others have noted, this amounts to a kind
of corporate welfare: Taxpayers step in to provide the benefits and survival
necessities that are not provided by employers, which then allows companies
like McDonald's to post higher profits and pay their executives lavish
salaries.
Steve Easterbrook, following his promotion from chief brand
officer to CEO of McDonald's, saw his pay increase by 368% — while, as Laura
Bult observes in the New York Daily News,
"McDonald’s workers have joined other low-wage workers nationwide in their
demands to raise the minimum wage."
It's obscene, but it's characteristic of a system dedicated to
maximizing profit for the few, no matter the societal or economic costs.
"The largest, wealthiest, most powerful organizations in
the world are on the public dole," writes David Brunori. "Where is the
outrage? Back when I was young, people went into a frenzy at the thought of
some unemployed person using food stamps to buy liquor or cigarettes.
Ronald
Reagan famously campaigned against welfare queens. The right has always been
obsessed with moochers. But Boeing receives $13 billion in government handouts and
everyone yawns, when conservatives should be grabbing their pitchforks."
Well, the outrage is brewing at the grassroots level thanks to
movements like Fight for $15 and the newly prominent Democracy
Spring, a coalition of progressive groups fighting to get money out
of politics. And the campaign of Bernie Sanders has energized many young people
and motivated millions to get involved with these causes, which transcend any
single presidential campaign.
These groups recognize that a nation with such profound levels
of income and wealth inequality, combined with a slow-growth economy that favors those already at the top, can never be genuinely democratic.
"I say to the Walton family, get off of welfare. Pay your
workers a living wage," Bernie Sanders has demanded on the campaign trail.
And the same can be said for McDonald's. As the Washington Post reported last year, "Americans are
spending $153 billion a year to subsidize McDonald’s and Wal-Mart’s low wage
workers."
"Let that sink in," writes Ken Jacobs, "American
taxpayers are subsidizing people who work...because businesses do not pay a
living wage."
Jake
Johnson is an independent writer. Follow him on Twitter: @wordsofdissent