By Doug Porter
Fast food giant McDonald’s is reportedly spending $3 million daily on U.S. advertising, yet business is declining. As the company has pumped up its menu to counter the explosion of fast-casual restaurants, food quality and service times have suffered. And increasingly negative image of the fast food industry as an exploiter of its workforce certainly hasn’t helped matters.
Last year was the company’s worst in three decades. Domestic sales actually declined by 1.7 percent. Global profits declined by 21 percent in the most recent quarter. Franchise owners are unhappy about menu bloat. Customers are confused by assorted pricing schemes. Employees are appearing on TV holding picket signs. And now the company is facing even more bad news.
A July ruling by the National labor Relations Board deeming the company a “joint employer” with its franchisees could spell big trouble, as 10 former workers at three McDonald’s locations in Virginia have filed a lawsuit alleging they were unceremoniously fired last May after being told by supervisors that there were “too many black people” working at their locations.
From the Washington Post:
The lawsuit, filed this morning in the U.S. District Court for the Western District of Virginia, alleges that high-ranking supervisors regularly referred to one of the branches as the “ghetto store” and referred to black workers as “ghetto” and “ratchet,” and that one supervisor sexually harassed female employees.
The employees, nine of whom are African American and one of whom is Hispanic, said in the complaint that the mass firings of 17 minority staff members came in May and that store managers told them at the time that it was “too dark” in the restaurants and that they “need to get the ghetto out of the store.”
All his bad news comes as the company is pushing a warm and fuzzy ad campaign framed around the slogan “i’m lovin’ it” in all lower case, using relaxed, non-formal language with liberal use of contractions.
Bill Lamar, senior vice president and chief marketing officer of McDonald’s USA said:
“It will rekindle the emotional bond our customers have with McDonald’s through a campaign that depicts how people live, what they love about life and what they love about McDonald’s.”
I don’t know about you, but “love” isn’t the first thing popping into my mind when I drive by a Micky D’s. My stomach may be rumbling and my throat may be parched, but I’m not slowing down.
It’s not like I quit liking a burger and fries. (Ask my doctor!) I mostly gave up on their offerings even before my then-elementary school aged daughter decided McDonald’s was evil for the simple reason that it no longer tasted good. My increased awareness of their employment practices sealed the deal.
The fast food industry and their corporate brethren have led the fight against increasing the minimum wage by claiming increased pay would hurt both their employees and their business model.
Now a study from the University of Massachusetts-Amherst’s Department of Economics and Political Economy Research Institute (PERI) says that may not be the case.
Economists Robert Pollin and Jeannette Wicks-Lim are claiming the fast food industry could adjust to a $15 per hour federal minimum wage without cutting jobs.
In our scenario, the federal minimum wage rises from its current level (what we term the “Year 1” level) of $7.25 to $10.50 after one year, i.e. by Year 2. The federal minimum then rises to $15 after three more years, i.e. by Year 5. Therefore, the U.S. economy operates with an $10.50 minimum wage for three years, from Years 2 – 4, before rising to $15 per hour in Year 5….
…In terms of policy implications, our results offer a straightforward conclusion. Achieving a $15 federal minimum wage within the U.S., phased in over four years, should be seen as a realistic prospect. This specifically means that the intended consequence of the $15 minimum wage—to improve the living standards of low-wage workers in the U.S. and their families—can certainly prevail over the unintended consequence that low-wage workers and their families would suffer from widespread employment losses.
A Bad Week for Political Consultants
Two of California’s wealthiest political players have stepped aside of running for Barbara Boxer’s Senate seat when she retires.
Billionaire and environmentalist Tom Steyer told the world via Huffington Post yesterday he was opting out of running for Democratic nomination.
Physicist Charles Munger, Jr.(R-Trust Fund Baby) announced last Thursday that he would not run for Senate.
But it ain’t over ‘till it’s over.
Former Los Angles Mayor Antonio Villaraigosa is reportedly getting closer to running. Latino leaders are telling the media they are excited about the prospect of electing the first Mexican-American in the Senate since Colorado Sen. Ken Salazar stepped down in 2009 to become secretary of the interior.
From the National Journal:
With only weeks gone but years left in California’s Senate race, national Democrats appear eager to anoint state Attorney General Kamala Harris as the 2016 successor to Sen. Barbara Boxer’s seat. The Democratic Senatorial Campaign Committee weighed in lauding Harris’ candidacy after she announced her decision last week, and high-profile sitting senators including Elizabeth Warren, Kirsten Gillibrand, and Cory Booker also feted the new front-runner.
But outside the Beltway, another group of Democratic power players and donors is coalescing behind the goal of electing California’s first Latino senator, and they already have their candidate in mind: former Los Angeles Mayor Antonio Villaraigosa.
“California has always helped to lead the way in terms of activism and prominence, and the courage to step up and say, ‘Now is our time.’ So why should this moment be any different?” said Democratic donor and Latino activist Henry R. Munoz III, cofounder of the Latino Victory Project.
The Politics of No Clue (I Am Not A Racist Edition)
Congressman Tom McClintock (R-CA, Not A Racist) made the news yesterday, saying minimum wage should not be raised because low pay was necessary for minorities and other unskilled workers who were not worth more than $7 an hour.
From Raw Story:
During an appearance on C-SPAN’s Washington Journal, host Greta Brawner asked McClintock if he could get behind a presidential candidate like Mitt Romney, who is one of an increasing number of Republicans saying that the minimum wage should beat least $10.10 an hour.
But McClintock argued that raising the minimum wage would “rip the first rung in the ladder of opportunity for teenagers, for minorities, for people who are trying to get into the job market for their first job.”
Spinning Their Wheels on Capital Hill
Remember the stories about how the GOP was going to show the world they were capable of governing when the took over the Congress?
Things aren’t going so well.
From the New York Times:
Some Republicans expressed dismay that they were grappling with a familiar situation: how to fix another self-inflicted political wound. It has been a bumpy beginning for the new Congress. In the House, the year started with 12 Republicans voting against Mr. Boehner for speaker. Last week there was another divided vote over ending legal recognition for immigrants who entered the country illegally, many of them as children.
“Week 1, we had the vote for the speaker. Week 2 we debated deporting children. Week 3 we’re debating rape and incest,” said Representative Charlie Dent, Republican of Pennsylvania. “I just can’t wait for Week 4.”…
Meanwhile, at UT-San Diego, we learned that yesterday’s abortion vote in the House also would raise taxes on small businesses:
With thousands of abortion protesters swarming the city in their annual March for Life, Republicans muscled broadened abortion restrictions through the House on Thursday after a GOP rebellion forced leaders into an awkward retreat on an earlier version.
By a near party-line 242-179 vote, the House voted to permanently forbid federal funds for most abortion coverage. The bill would also block tax credits for many people and employers who buy abortion coverage under President Barack Obama’s health care overhaul.
A White House veto threat and an uncertain fate in the Senate mean the legislation has no realistic chance of becoming law. But on a day when crowds of anti-abortion demonstrators stretched for blocks outside Capitol windows — and hours after the embarrassing GOP stumble on another abortion measure — Thursday’s vote let party leaders signal that the Congress they now command is trying to end abortion.
Elsewhere on Capital Hill, the US Senate voted overwhelming to admit that the climate of planet earth was
getting warmer changing. An amendment attributing the changes to human activity was defeated.
Keep up the good work, Republicans!
Things Go Better With Koch for GOP Candidates
From UT-San Diego:
Three likely GOP presidential candidates will share the stage Sunday night at a private event hosted by a political advocacy group backed by Charles and David Koch and other conservative donors.
The event with Sens. Ted Cruz of Texas, Rand Paul of Kentucky and Marco Rubio of Florida marks the first formal squaring-off between potential 2016 candidates. But because the format will be styled as a discussion rather than a debate, it will not violate strict new rules laid down by the Republican National Committee.
The event, called the “American Recovery Policy Forum,” will be focused on economic prosperity, health care and energy and moderated by ABC News chief White House correspondent Jonathan Karl.
The panel is part of a weekend gathering of wealthy political contributors on the right being held at a Palm Springs resort. The private conclave is being hosted by Freedom Partners Chamber of Commerce, a tax-exempt group that serves as the hub of a sprawling political network backed by the Kochs and others.
The ABC newsman moderating the event, according to Think Progress, is an “alum of a media training program aimed at promoting conservative media on college campuses (it highlights Karl as a prominent alum, along with conservative stalwarts Ann Coulter,Dinesh D’Souza, Maggie Gallagher, and Laura Ingraham).”
Keep that in mind next time you see reporting on ABC from the White House.
Tweet of the Day: Ha!
Dear god. World ➡️ Hell ➡️ Handbasket pic.twitter.com/kuX9Rn29ZS
— Hilary Sargent (@lilsarg) January 23, 2015
On This Day: 1913 – Some 10,000 clothing workers struck in Rochester, N.Y., for an 8-hour day, a 10-percent wage increase, union recognition, and extra pay for overtime and holidays. Daily parades were held throughout the clothing district and there was at least one instance of mounted police charging the crowd of strikers and arresting 25 picketers. Six people were wounded over the course of the strike and one worker, 18-year-old Ida Breiman, was shot to death by a sweatshop contractor. The strike was called off in April after manufacturers agreed not to discriminate against workers for joining a union. 1964 – Ratification of the 24th Amendment to the Constitution was completed. This amendment eliminated the poll tax in federal elections. 1973 – President Nixon announced that an accord had been reached to end the Vietnam War.
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