THE GUARDIAN
McDonald's in New York's Times Square, in midsummer. The fast food store heaves with native New Yorkers and tourists, including a table of Filipino nuns and a troupe of burlesque actors. The staff, remarkably unstressed, offer only accommodating smiles. But behind the scenes the atmosphere is anything but relaxed.
McDonald's, along with dozens of profitable Wall Street-listed fast food and retail chains, is being rocked by unprecedented workforce- and consumer-led protests over wages and conditions.
Since last year, when Walmart faced the first co-ordinated strikes in its history over pay and conditions, similar protests have been spreading through America's low-wage workforce. Earlier this month thousands of fast food workers in cities including New York, Chicago and Detroit took to the streets, many wearing red "Fight for 15" T-shirts – a reference to the popular call for a $15 (£9.70) hourly wage, almost double the current minimum. With more protests planned for the autumn, America's most marginalised, vulnerable and exploited workforce is on the march.
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The one-day protests struck not only McDonald's, Wendy's and KFC but also more expensive retail stores such as Nike, Macy's and Victoria's Secret. Last month McDonald's made headlines after it published a guide budget for employees living on the minimum wage – a gesture that backfired after the firm's own calculations showed survival on what it paid was only possible with a second job or if you live without a food budget or heating.
"The McDonald's wage – like any minimum wage – is basically a starvation wage," says John Mason, a professor of politics at William Paterson University in New Jersey. "It effectively places you at 30% below the official poverty budget."
Though the US stock market is reaching historic highs, the share of the population in work is near a three-decade low. More than half the 162,000 new jobs recorded in July's jobs report were in low-wage industries. It's a situation, say economists, in which unemployment appears to be falling, but the reality is that the jobs being created are either part-time and offer no benefits or are so poorly paid they require an additional job or government assistance. The middle class is being not so much squeezed as suffocated.
"The five largest employers in the US, including Walmart and McDonald's, all pay minimum wage, or close to it," says Mason. "They only succeed in this strategy because they're massively subsidised by the government through food stamps and Medicare." When the US emerged from recession in the early 90s, members of Generation X were locked angrily into "McJobs". Now those same jobs are filled with older, better-educated workers, many trying to support families. It's those workers in "poverty-wage" employment who are pressing for reform, says Jonathan Westin, director of Fast Food Forward. "Many have been pushed out of well-paying jobs and found themselves in the fast food industry struggling to get by," he says. "It's not teenagers working for pocket money, it's mothers and fathers."
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And they don't buy the industry's claim that wage levels are set by individual franchises. "They claim no responsibility for the wages that keep millions of workers in poverty, but we know they maximise profits by controlling franchises as strictly as possible."
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The restaurant and retail industries say theirs are low-margin businesses. A typical McDonald's franchise earns around six cents on the dollar; the combined profit of major US retailers, restaurant chains and supermarkets in the Fortune 500 index is smaller than the profits of Apple alone. A $15 minimum hourly wage, it is claimed, could lead to businesses closing and fewer jobs. Some industry groups warn the protests could lead to further automation and consequent loss of jobs. Yet a recent study suggests the cost to consumers if the wage demands were met would be only 20 cents per item.
For companies, the pressure to ensure corporate profit has typically outweighed the demands of labour, says Professor Arne Kalleberg, author of Good Jobs, Bad Jobs. These are not union-sponsored protests, he points out, but socially organised protests. "Frustration has been building for a long time," he says, "and this is spontaneous, non-union activity by people who are increasingly frustrated by the system, and it's catching on."
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The fast food and retail strikes are not the only sign of developing protest. In Chicago, public sector unions are battling mayor Rahm Emanuel, Barack Obama's former chief of staff, over proposals to cut pensions and benefits while offering generous tax breaks to developers of a new sports stadium....
Westin sees a connection to the Occupy movement. "Occupy helped raise the issue of inequality and inspired a whole movement for protest. But this is a more direct action approach.
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Now, when minimum wage companies are the largest employers, studies suggest four out of five Americans will experience poverty or near poverty in their working lives. Even relatively privileged workers are caught "in the scissors" between low-wage employment and student debt, points out Mason. "It means they can't get married, can't buy a car or a house, and this is giving oxygen to anarchist-types coming out of Occupy."