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Fast-food strike gets supersized over wages

Thursday, 29 Aug 2013 | 12:56 PM ET
Protesters in New York
Justin Solomon | CNBC
Protesters in New York

The battle to boost the minimum wage escalated Thursday when thousands of workers at fast-food restaurants in 50 U.S. cities walked off the job to demand a "decent" wage.

From San Diego to New York, workers stopped flipping burgers, frying fries, and slathering on secret sauce in what organizers called the largest strikes against the nation's fast-food companies ever.

"You're trying to go up and you're just going down," said protester Shantel Walker, 31, of Brooklyn, who makes $7.25 working at a Papa John's in Manhattan. "All of us are in the same financial crunch. We're trying to take care of our families and our livelihood."

The strikes mark the latest salvo in a nearly yearlong battle to get not only higher wages but an opportunity to unionize without facing retaliation from their employers. The workers' ire, too, is at the very heart of a politicized debate to raise the country's minimum wage that eventually may be decided in Washington.

Labor Secretary Thomas Perez told The Associated Press that the worker strikes were a sign of the need to raise the minimum wage. "For all too many people working minimum wage jobs, the rungs on the ladder of opportunity are feeling further and further apart," he said.

At the core of the workers' demands with the $200 billion fast-food industry is salary starting at $15 an hour from the current $7.25 hourly minimum wage and the $8.94 median wage for front-end workers.

Workers mobilized in cities from Alameda, Calif., to West Haven, Conn., and across the nation, including several demonstrations in New York. To date, strikes have been various cities or regions, but nothing like Thursday's national push involving hundreds of restaurants.

About 200 workers marched through the midtown Manhattan McDonald's on Thursday morning, and more gathered in the downtown financial district. As the streets became more crowded with protesters beating drums and blowing loud whistles, police struggled to keep traffic moving.

(Read more: Earn minimum wage? It'll take this long to afford a Big Mac)

The strike comes as more and more fast-food workers making minimum wage are not teenagers, but adults trying to support families, particularly since the Great Recession.

Only 16 percent of fast-food industry jobs now go to teens, down from 25 percent a decade ago. More than 42 percent of restaurant and fast-food employees over 25 have at least some college education, including 753,000 with a bachelor's degree or higher, according to the Bureau of Labor Statistics.

Janul Dixon, 35, came out Thursday to offer his support to the workers. He used to work at Wendy's for a low wage but has since found a job as an exterminator.

"They need to allow people to make enough to support their family," he said. "In New York everything is going up, but wages are not."

The National Restaurant Association has countered that only about 5 percent of fast-food workers earn the minimum wage. Other defenders of the industry note that increased wage costs will be passed onto consumers.

"The restaurant industry provides opportunity to over 13 million Americans with jobs that meet critical needs within our economy. We welcome a national discussion on wages, but it should be based on facts," said Scott DeFife, the association's executive vice president of policy and government affairs. "The restaurant industry is the nation's second largest private sector employer and our industry is an industry of opportunity."

(Read more: Minimum wage hike: Just what the economy ordered?)

Fast-food workers strike nationwide
Thousands of restaurant employees called for a major increase in the minimum wage, reports CNBC's Jackie DeAngelis.

"Nine out of ten salaried restaurant workers, including owners and managers, started as hourly workers. The fact is, only 5 percent of restaurant employees earn the minimum wage, and those that do are predominantly working part-time and half are teenagers," DeFife added. "Restaurant jobs teach valuable skills and a strong work ethic that are useful for workers throughout their professional careers."

McDonald's, which has 34,000 restaurants across the globe., was quick to defend its salaries. "McDonald's aims to offer competitive pay and benefits to our employees. We provide training and professional development for all of those who wish to take advantage of those opportunities," the company said in a statement. "Our history is full of examples of individuals who worked their first job with McDonald's and went on to successful careers both within and outside of McDonald's."

The chain posted $5.5 billion in profits last year on revenues of $27.5 billion.

Thursday's strike was expected to be "the largest attempt at worker organizing in this industry ever" due to support from the Service Workers International Union, and grassroots efforts from community groups, local politicians and the clergy, said Tsedeye Gebreselassie, an attorney at the National Employment Law Project.

"The workers are responding to total failure on behalf of the federal government to raise the minimum wage to keep up with inflation and the cost of living," Gebreselassie said.

(Read more: How bad math about Big Macs gives me indigestion)

Organizers stressed the importance of the strike spreading to Southern states.

"The South has always been the model for low wage employment, from slavery to the Jim Crow laws, to the present," said Dorian Warren, an assistant professor of political science at Columbia University who has published work on labor organizing and inequality. "It's also the most anti-union part of the country, so the fact that workers feel empowered enough to take collective action is enormous."

Strikers complain that while revenue is up about 13 percent at fast-food restaurants as of August, it's not being passed on to the workers.

All the media attention paid to the strikers Thursday will surely re-ignite the minimum wage debate, in which opponents say higher employment costs will mean fewer jobs and higher prices for customers. In The Wall Street Journal on Thursday, the conservative Employment Policies Institute ran a full-page ad with a picture of a robot making pancakes, warning that higher wages would mean "fewer entry-level jobs and more automated alternatives."

"You can either raise prices and lose customers, or (automate) those jobs," said Michael Saltsman, EPI's research director. "The idea that restaurants are rolling in the money is not representative of the situation franchisees face."

By CNBC's Jeff Cox. Follow him @JeffCoxCNBCcom on Twitter. Reuters and The Associated Press contributed to this report.

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