The McDonalds Strikes – US vs New Zealand

US fast food workers celebrated Labor Day this year with a series of rolling strikes in 60 cities. The McDonald’s strikes, organized by Fast Food Forward, first started in New York City last November and gradually spread across the country. The movement to unionize McDonald’s is international, and New Zealand workers also participated. Fortunately our fast food workers are a little ahead of their US counterparts. Minimum wage service workers first formed a union here, called Unite, in 2003.

The purpose of Unite is to represent minimum wage service workers, not only in the fast food industry, but in other retail outlets, call centers, casinos, security companies, movie theaters, language schools and hospitals. The New Zealand workforce is in a similar situation as British and North American workers. Over the past three decades, the export of  hundreds of thousands of well paying manufacturing jobs to third world countries has put hundreds of thousands of Kiwis out of work, forcing them to seek minimum wage jobs in fast food and retail. Here, as in the US, the fast food sector is far more difficult to unionize than the manufacturing sector. Union organizing is easiest when large numbers of workers are stably employed at a single site. The fast food industry typically employs large numbers of young workers who change jobs frequently at widely dispersed sites.

New Zealand was one of the first countries to win a collective bargaining agreement with McDonald’s in 2006. And contrary to the dire predictions put out by McDonald’s Inc, the presence of unions and collective bargaining agreements in our fast food restaurants hasn’t caused an increase in automation or a decrease in the number of jobs. Unite just ratified their third union contract with McDonald’s the last week in August. Negotiations to renew this contract, which expired in 2011, broke down in April. Thus the last four months have seen rolling strike action across New Zealand similar to the recent US strikes.

Why the US Lags Behind

Obviously Unite is way ahead of American workers, having already won the right to be represented by a union and bargain collectively. In the US when a non-union employer violates hours, pay, or health and safety laws (McDonald’s is a notorious offender), an employee’s only option is to take them to court. When they belong to a union, the union can intercede and force the employer to obey the law. In the US fast food chains (Taco Bell, KFC, Subway, Burger King) oppose unions and collective bargaining as a matter of principle. Moreover they frequently punish workers who try to start unions – usually by firing them. The federal laws outlawing this type of retaliation are cumbersome and difficult to enforce.

The main reason New Zealand’s drive to unionize McDonald’s has been so successful is because we have nothing comparable to the anti-union Taft Hartley law here. This 1948 US law allows management to campaign against a unionizing drive with coercive scare tactics, to preempt union organizing by petitioning the National Labor Relations Board for a union certification or decertification election, and to delay union certification by demanding NLRB hearings on key matters of dispute (time the company uses to coerce workers to vote against the union). Slowdowns, sit down and wildcat strikes are all illegal under the Taft Hartley Law.

Ironically this means that Fast Food Forward has more freedom than an official union would. Recently some of their members to pressure a St Louis McDonalds to reinstate an organizer they had fired. If a recognized union participates in a wildcat strike, their leaders can be fined or jailed.

Fast Food Forward Demands Living Wage

Workers in Fast Food Forward who are struggling to afford basic necessities for their families like housing and food on a minimum wage of $7.25 are demanding an increase in the entry level wage to $15. Predictably the business press claims a wage increase this large is counterproductive – that it will 1) force McDonald’s to automate and cut jobs and 2) drive McDonald’s shareholders away by reducing profits and dividends.

The first argument is pure scaremongering, as New Zealand and other countries* have successfully unionized their McDonald’s restaurants without any loss of jobs. The second argument blatantly misrepresents the actual financial position of McDonald’s Inc. A close look at the company’s portfolio indicates they are literally wallowing in money.

According to Forbes, McDonald’s presently ranks as one of the top 25 dividend payers on Wall Street with an annualized yield of $3 per share. Moreover the McDonald’s website reveals they have accumulated $10 billion in what they refer to “excess cash” that they are using to buy back shares from stockholders – a common maneuver to inflate the stock price. Their CEO Don Thompson also claims a goodly portion of this “excess cash” for his $979,167 salary and $1.4 million bonus.

 

*Other countries with McDonald’s collective bargaining agreements include

Sweden, Denmark, Iceland – all McDonald’s unionized

Germany, France, Finland, Ireland, Netherlands, Australia – “substantial” numbers unionized.

 

photo credit: Steve Rhodes via photopin cc