Fast-food workers in 50 U.S. cities were expected to walk off the job on Thursday (Aug. 29) in an effort to ratchet up pressure on large chains that included McDonald's (NYSE:MCD), Wendy's (NASDAQ:WEN), Burger King (NYSE:BKC), Subway, and Yum Brands' (NYSE: YUM) Taco Bell and KFC, Bloomberg reported.
About 500 restaurant workers assembled in Manhattan's Zuccotti Park, while about 200 workers showed up at a large McDonald's just north of the Chicago Loop. Based on early reports, the groups were larger than in previous demonstrations for a $15 fast-food wage, but still relatively small compared to many mass protests.
Although some of the protests were at franchise restaurants, the head of the SEIU, a union that is supporting the non-union protesters, said that "franchisees are not part of the problem." SEIU president Mary Kay Henry added, "We want to go to the source, which is the multinational corporations that own these franchise relationships." Under agreements with the chains, the franchisees who own and operate most U.S. fast-food restaurants typically are responsible for hiring and wages, but are already under pressure to pay increased rent and royalties to the chains, according to Bloomberg.
One longtime franchisee consultant told Bloomberg that the most restaurant operators could afford would be a raise of $1 an hour, spread over three years. John Gordon, principal of Pacific Management Consulting Group, said the fast-food companies could help stores pay more by lowering royalties they charge franchisees, but that's something Wall Street won't tolerate because it would cut into profits. "It's just so complicated," Gordon said.
The demonstrations came on the run-up to Labor Day, but also as another low-wage retail issue was coming to a head in Washington, D.C. The D.C. city council voted on July 10 to impose a special, 50 percent higher minimum wage on new big-box stores that would primarily affect Walmart's (NYSE:WMT) plans to open several new stores in Washington. That bill must be signed into law or vetoed by the mayor this week. Walmart threatened to scale back its D.C. plans if the bill becomes law.
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