Burger giant celebrates returns as pressure mounts to raise wages, address health harms
Today, on the heels of a national worker strike of McDonald’s employees, CEO Chris Kempczinski celebrated the corporation’s performance during a pandemic. As workers demanded a commitment to pay its whole workforce a living wage, Kempczinski talked about “McFamily” and how the corporation puts its “customers and people first.” As racial discrimination and sexual harassment suits bare down on the corporation, Kempczinski discussed how the corporation is “ensuring values guide everything we do.” And when a long-time employee urged the corporation to account for its harms to workers and public health, Chairman Hernandez couldn’t even muster a response. The board’s reasons were “outlined in the proxy statement.” Enough said.
But, as evidenced this spring and at McDonald’s annual meeting, employees, investors, and the public are becoming increasingly fed up with the spin and dismissiveness.
For the past 2 years, investors representing a growing number of shares in McDonald’s, its soda supplier Coca-Cola, and Coke competitor Pepsi voted for resolutions calling on these corporations to account for the harms of their sugar-sweetened products and marketing.
At Coca-Cola, investors holding 402,257,000 shares and approximately $22 billion in holdings recently voted for such an accounting, similar to 406,362,000 shares and approximately $22 billion in holdings in 2020.
At Pepsi: 194,180,000 shares and approximately $28 billion holdings, up from 153,120,000 shares and approximately $20 billion in holdings in 2020.
And at McDonald’s: An uptick is expected to be posted soon from the 69,300,000 shares and approximately $16 billion in holdings voted in favor in 2020.
As McDonald’s employee Terrence Wise put it in his remarks:
“[C]ontinuing to pay workers poverty wages when you, yourself, have acknowledged the corporation ‘will do just fine’ with higher wages is exploitative. [S]o, too, is saddling taxpayers and your workers with inordinate health costs. When our corporation doesn’t pay a living wage, guarantee paid sick leave, afford its ‘essential workers’ adequate health safeguards, and exacerbates health inequities during a pandemic, someone has to pick up the tab.”
Investors and the corporation’s broader stakeholders want a real and immediate “culture shift at McDonald’s,” according to Wise.
McDonald’s counter-argument to said shift can be found on page 66 of the corporation’s statement to shareholders. Its argument amounts to: “we’re already doing what Wise and others are asking for.” Again: spin.
This year’s proposed resolution called for “an assessment of risks to the company’s finances and reputation associated with changing scientific understanding of the role of sugar in disease causation.”
The independent study (from Keybridge) that McDonald’s claims to be the same assessment the resolution calls for, simply looks at how the corporation is doing in reducing added sugar and marketing sugary products.
What’s more, the findings of the Keybridge study make a strong case for the resolution Wise advocated for. Less than half of Happy Meal Bundle Offerings across the chain’s 20 major markets met their own nutritional criteria.
What’s more, the University of Connecticut Rudd Center continues to find that for all of McDonald’s claims about curbing marketing to young people over the years, it continues to be a leading, global offender. Not only does its spending dwarf that of most competitors, the corporation concentrates a significant amount of ad dollars targeting Black and Hispanic kids. It’s one further illustration of how stated values fail to sync with reality at the Golden Arches.
During his remarks, Wise also connected McDonald’s toll on public health with its disregard for the health of its workers.
“I work for McDonald’s, the second largest corporation in America and still rely on food stamps and Medicaid. I don’t receive as much as I did when I made $8 or $9 an hour, but still need help even though I work my tail off.
My family has been homeless despite two incomes. We’ve endured freezing temperatures in our purple minivan. I’d see my daughters’ eyes wide open, tossing and turning, in the back seat. Try waking up in the morning and getting ready for work and school in a parking lot with your family of five. That’s something a parent can never forget and a memory you can never take away from your children. You should never have multiple jobs in the United States and nowhere to sleep.
And that was before the pandemic. Since COVID-19 hit, it’s gotten even harder. And you can see the reason people aren’t rushing to work for McDonald’s and other corporations. We can’t live on what it pays. It doesn’t value our labor. It doesn’t value worker health, let alone the health of those it serves.”
And Wise’s story is more common than you may think. McDonald’s is among the top employers of Medicaid and food stamp beneficiaries.
McDonald’s board and management attempted to sweep this reality under the rug. According to Chairman Rick Hernandez, “the brand was well-positioned to manage through the pandemic.” “McDonald’s would not have been able to…deliver such a strong performance last year without harnessing the strength of our system and ensuring our values guide everything we do.”
What values? The corporation announced a dividend increase in the middle of a pandemic, when it couldn’t ensure the most basic workplace protections.
Here were some of the other numbers McDonald’s brass hyped at the meeting:
And as small restaurants shuttered, McDonald’s netted $4.73 billion in income.
Yet those who made these numbers possible received only a middling commitment to raise wages. In response to worker pressure and in an effort to head off worker strikes, the corporation announced on May 13 that it would raise wages by 2024 in 5% of its 14,000 U.S. stores. Even in those stores, wages will only be raised for entry level workers to $4 below what national lawmakers are currently proposing.
That’s some way to “foster community” and “put its people first.”
McDonald’s failure to shift is made all the more exasperating in light of the fact that:
- Executives from other chains like Denny’s are saying a $15 minimum wage won’t hurt business. This from a chain that is currently allowed to pay its servers $2.13 or more than 3 times less than what McDonald’s is mandated to pay.
- Competitors like Domino’s are saying, “You can’t go out there and hire people at that rate anyway. We’re above the minimum wage, both for our folks that work inside the stores and our tip drivers on the road. And then in our supply chain business, we’re in excess of $15 an hour everywhere we operate.” (All of which may explain in part why McDonald’s and other chains are now having difficulty hiring workers).
- CostCo has been paying a $16 minimum since February.
- The burger giant told its principal trade group, the National Restaurant Association (NRA), it would no longer participate in lobbying against the minimum wage…more than two years ago now.
On this last point, it’s important to note that it’s nearly impossible to verify that McDonald’s significant membership dues are not being directed at lobbying to suppress the minimum wage. McDonald’s would be making far more pointed in its statement by breaking ties with the “Other NRA” altogether. With McDonald’s explicit consent or no, the NRA remains the single, greatest obstacle to realizing a universal living wage in the U.S. (More on the NRA’s racist and exploitative history here).
As Terrence Wise concluded, McDonald’s “can and must change.”
“From paying workers—across all of its restaurants—the minimum of what they’re worth: $15 an hour…to making clear the high and disproportionate human costs of selling a high volume of deeply unhealthy food.
Everyone who wakes up and works in our country deserves access to the promise that America made to each and every one of us: ‘life, liberty, and the pursuit of happiness.’
It’s a promise that, to this day, remains unfulfilled for too many of us.”