Fast food depends on low wages and high turnover. That’s not just wrong, new research says — it’s lousy for business.
In the meantime, the profits keep
rolling in. The fast-food giant registered $4.7 billion in 2020 earnings. CEO
Chris Kempczinski personally pocketed $10.8 million last year, 1,189
times more than the $9,124 that went to the company’s median worker.
Executives at McDonald’s seem to
think they can outlast the Fight for $15 campaign. More to the point, they
think they know everything. Nothing happens at Mickey D’s without incredibly
intensive market research: “Plan, test, feedback, tweak,
repeat.” More hours may go into planning the launch of a new McDonald’s menu
item than Ike marshaled planning the D-Day invasion.
All this planning has McDonald’s
executives supremely confident about their business know-how. But, in fact,
these execs do not know their business
inside-out. They don’t know their workers.
Workers remain, for McDonald’s
executive class, a disposable item. Why pay them decently? If some workers feel
underpaid and overstressed, the McDonald’s corporate attitude has historically
been “good riddance to them.” Turnover at McDonald’s was running at an annual rate of 150 percent before the
pandemic.
The entire fast-food industry rests
on a low-wage, high-turnover foundation. And at those rare moments — like this
spring — when new workers seem harder to find, the industry starts expecting its politician pals to cut away at jobless benefits and force workers
to take positions that don’t pay a living wage.
But if leaders were really doing
their research, they’d learn very quickly that this makes no sense. Instead of
treating workers as disposable and replaceable, businesses ought to be treating
them as partners.
Who says? The Harvard Business Review, hardly a haven for anti-corporate sloganeering. Employee ownership, the journal concluded recently, “can reduce inequality and improve productivity.”
Thomas Dudley and Ethan Rouen
reviewed a host of studies on enterprises where employees hold at least 30
percent of their company’s shares. These companies are more productive and grow faster than their counterparts, Dudley and
Rouen found. Cooperatives are also less
likely to go out of business.
Enterprises with at least a
30-percent employee ownership share currently employ about 1.5 million U.S.
workers, just under 1 percent of the nation’s total workforce. If we raise that
number to 30 percent, Dudley and Rouen calculate, the bottom half of Americans
would see their share of national wealth more than quadruple.
Elsewhere, enterprises with
100-percent employee ownership already exist. Spain’s Mondragon cooperatives,
the New York Times noted earlier this year, have flourished
since the 1950s. They aim “not to lavish dividends on shareholders or shower
stock options on executives, but to preserve paychecks.”
At each of Mondragón’s 96
cooperative enterprises, executives make no more than six times what workers in
the network’s Spanish co-ops make. In the United States, the typical rate
runs well over 300 to 1.
We’re not talking artsy-crafty
boutiques here. Mondragón co-ops, including one of Spain’s largest grocery
chains, currently employ 70,000 people in the country.
Mondragón has had a particularly
powerful impact on the Basque region in Spain, the network’s home base. By one
standard measure, the Basque region currently ranks as one of the most egalitarian
political areas on Earth.
“We want to transform our society,”
Mondragón International president Josu Ugarte told me in a 2016 interview. “We want to
have a more equal society.”
So do workers at McDonald’s.
Sam
Pizzigati is a co-editor of Inequality.org and author of The Case
for a Maximum Wage and The Rich Don’t Always Win. This op-ed was adapted from
Inequality.org and distributed by OtherWords.org.
