Low Pay is Not OK
For Immediate Release
March 4, 2014
As profits increase…
McDonald’s: Rising Inequality Could Spur Higher Wages
Fast-food giant acknowledges impact of worker strikes
In its annual 10-K filing with the Securities and Exchange Commission, McDonald’s, for the first time, admitted that it could be forced to raise wages due to increased focus on income inequality.
The company said that its results and financial condition could be affected by “the long-term trend toward higher wages and social expenses in both mature and developing markets, which may intensify with increasing public focus on matters of income inequality.”
For the second year in a row, McDonald’s cited the nationwide strikes by fast-food workers demanding $15 and a union without retaliation as a risk factor. And this year, in an acknowledgment that the social media campaign by workers—which unmasked McDonald’s out-of-touch employee help site— has taken a toll, the company said that “the impact of campaigns by labor organizations and activists, including through the use of social media and other mobile communications and applications,” were a risk to its business.
In its report, McDonald’s said that “weak economies, high unemployment rates, inflationary pressures and volatility in financial markets” have pressured its performance and adversely affected sales. But its profits increased slightly in 2013, to $5.586 billion, from $5.465 billion in 2012, according to the filing.
Isabel Vazquez, 42, who has worked at McDonald’s in Chicago for 16 years, said:
“With nearly $5.6 billion in profits, McDonald’s can clearly afford to pay us more. The company should be worried about continued worker protests because we are not going to stop taking action until we win $15 and the right to form a union without retaliation.”
Show Me $15 Community Director the Rev. Martin Rafanan said:
“McDonald’s executives are worried about inequality, but they’re the ones making it worse. They need to pay workers more, and with almost $5.6 billion in profits, they can certainly afford to do so.”
National Employment Law Project Executive Director Christine Owens said:
“McDonald’s has it wrong. Higher wages will allow them to sell more burgers. The company said that weak economies and high unemployment rates have pressured its performance and adversely affected sales, but it fails to recognize that investing in its employees is a surefire way to help strengthen consumer demand.”
Indeed, a growing chorus of business leaders is beginning to recognize the benefits of higher wages. Last month, GAP Chief Executive Glenn Murphy said raising workers’ wages to $10 an hour “will directly support our business, and is one that we expect to deliver a return many times over.” And writing about the potential effects of a wage increase on the fast-food industry, the investor site Seeking Alpha wrote, “Very possibly [fast-food restaurants] will sell more hamburgers, since minimum wage earners will have increased spending power…That’s the most likely outcome.”