Want to end corporate welfare for McDonald’s? Raise the minimum wage
You’ve got to feel for McDonald’s. Every time the misunderstood corporation tries to offer its’ low-wage employees a hand, it backfires. First the fast food giant was ridiculed this past summer for dispensing helpful budgetary advice to its struggling workers (in a nutshell: get another job). Now the company is in hot water again after a recorded call to its’ McResource helpline, in which an employee who reported not being able to make ends meet was advised to sign up for food stamps and other government assistance programs, went viral online. Strangely though, the very people who ought to be most upset about this state of affairs – small government loving republicans who don’t want anyone relying on federal assistance for anything – have raised little or no objection.
When Nancy Salgado, the employee at the center of this latest storm, called the McResource line to tell them she was having to ration food and couldn’t take her kids to the doctor, the helpful employee on the other end of the line didn’t offer to raise her wages or sign her up for health benefits, but advised her instead about the various federal government programs she could avail of. While it’s not news that hugely profitable corporations like McDonald’s are only too happy to rely on the American taxpayer to subsidize the non-living wages they pay their workers, (Salgado earns $8.25 an hour) the blasé nature of the phone call still sparked considerable outrage, but not from budget conscious Republicans.
Perhaps I’m being unreasonable, but it seems to me that when Republicans are so vocal about how much they hate government programs like SNAP benefits (aka food stamps) and Medicaid and indeed anything that makes life a little more feasible for low-income or no-income Americans, they should surely be able to work up a small sweat at such a blatant example of the system being gamed. Just last month congressional Republicans voted unanimously to cut $39bn from the food stamp program, and I surely don’t have to waste words here outlining their opposition to any form of government subsidized healthcare. Why then, when they have made their objection to welfare programs abundantly clear are they seemingly okay with hugely profitable corporations exploiting these programs while they underpay their workers?
McDonald’s have tried to do damage control on the phone call, claiming that the recording was “not an accurate portrayal of the resource line” because it was “very obviously” edited. The full 14-minute version of the call was provided to numerous medial outlets, however, and the facts remain unchanged: Salgado was told to seek out government assistance instead of being given a raise.
It doesn’t help McDonald’s case either that just a week or so before the phone call, the UC Berkeley Labor Center and the University of Illinois released a joint study on the public cost of low-wage fast food jobs. They found that 52% of the families of front line fast food workers are enrolled in one or more public assistance program compared to 25% of the workforce as a whole. Overall, subsidizing the wages and benefits of employees of highly profitable fast food chains costs the American taxpayer nearly $7bn per year.
The seeming indifference to this giant corporate welfare program that low wage employers like McDonald’s and most of its’ competitors in the fast food world are happy to avail of might be easier to understand if the companies were struggling but the opposite is true. McDonald’s 2012 annual report(pdf) was a glowing affair – in which the company enthusiastically announced a 3.1% growth in global sales, a 5% earnings per share growth, worldwide expansion plans and billions in profit. Does a company this healthy (I use the term lightly) really need federally funded public assistance programs to stay in business? Hardly, but that doesn’t seem to bother the very people who generally loathe any kind of handout.
If congressional Republicans are serious about their claim that cutting government spending is their highest priority, why are they so indifferent to this flagrant abuse of federally funded benefits? The reason can only be that if they were to raise serious objections to what is effectively a corporate welfare program for the fast food industry, they might be forced to do something that would be an even bigger violation of conservative principles – raise the minimum wage.
Since 2009, the federal minimum wage has been stuck at $7.25 an hour for non exempt employees, a figure so low that it doesn’t qualify as a living wage in any state. Even Republicans acknowledge that it’s simply impossible to cover basic living costs with wages this low, yet they voted unanimously earlier this year against a modest increase to $9 an hour. It seems that conservatives would rather demonize low-wage workers and find ways to blame them for their poverty instead of facing up to the fact that the only way to not be poor is to be paid more.
So for now we are stuck with a situation where one set of American workers has to subsidize the wages and benefits of another set of workers just so that certain corporations can keep their low end labor costs down and their profits way up. Fast food workers have actually come up with the most feasible way out of this unsustainable situation. They are asking their employers to raise their wages to $15 an hour, up from the average of $8 an hour. Needless to say McDonald’s and their fast food counterparts will happily stick to the cozy arrangement they have going as long as their enablers in congress allow them to. They may soon find, however, that the American taxpayer is not quite so easily played.