Fight for $15

Moderated by Rick Badie

A recent federal ruling regarding the franchiser-franchisee relationship may lead to higher minimum wages and a unionized workforce if allowed to stand. Today, an organizer for a nonprofit that advocates a fast-food wage increase trumpets the ruling, while the head of the Georgia Restaurant Association warns the decision would put a “chilling effect” on regional job growth.

Fight for $15

By Neil Sardana

Last month, the National Labor Relations Board general counsel found McDonald’s Corp. to be a “joint-employer” alongside its franchisees. This legal decision could allow the corporation to be held responsible for the treatment and conditions of its franchisees’ workers and let workers unionize nationally across all stores.

It is common sense that McDonald’s should be held responsible for treatment of its workers. This is a victory for the fast-food workers movement that is fighting for a decent wage of $15 an hour, fair working conditions and the right to organize unions.

McDonald’s continues to challenge the notion it is responsible for its workers and plans to appeal the NLRB decision. However, McDonald’s and other fast-food franchisers understand the franchise model is designed to create a false barrier between the corporate entity and its workers. This allows the corporation to pay minimal wages while shifting the blame and responsibility for workers to franchisees.Franchisers including McDonald’s have invested billions of dollars to build brands, structure franchise models, promote and sell products and establish customers across the world.

Given this, it would be ridiculous to believe corporations do not have direct control, or at least compelling influence, over the structure and operations of its franchisees. This control is needed by the corporation to protect and maintain a consistent brand and sell the same Big Mac coast to coast. This franchise model is a “godfatheresque” management style, where the corporations have all the money and power but utilize those lower on the chain (the franchise owners) to do the dirty work of keeping workers underpaid and under control.

The recent NLRB finding challenges this structure. It places accountability where it belongs, right at the top. Workers should be able to negotiate with, and hold accountable, corporations that are the ultimate beneficiaries of their labor. In this case, they are responsible for pay inequity at rates over 1,000 to 1 of compensation for CEOs vs. fast-food workers.

The franchise model hurts workers because it allows corporations to squeeze them dry while denying any responsibility. However, it also puts small franchise owners at a disadvantage and leaves them with little control over their own stores and livelihoods. Franchisees are squeezed out of their profits to pay rent, advertising and marketing costs and other mandatory franchise fees to the corporation.

Some franchise owners have spoken out against the bottom-barrel wages and absolute control McDonald’s exerts over its franchisees.

Kathryn Slater-Carter, owner of a McDonald’s franchise in Daly City, Calif., challenged the inability to offer health insurance and the low wages she was pressured by McDonald’s to pay. She worked with the California Legislature to pass a bill enabling greater rights of independent franchise owners, allowing them to control certain elements in their businesses without fear of corporate headquarters threatening to suspend their franchise.

In the “Fight For $15,” we are absolutely clear that fast-food corporations are determining how their franchisees operate. The corporations are responsible for the extremely low wages and the utilization of public welfare benefits to subsidize their work forces. This is why, from the outset, corporations and not franchisees have been the clear target for fast-food workers’ demands of $15 an hour and the right to form a union.

We celebrate this decision by the NLRB as a step in the right direction. The struggle for fair wages and respect for fast-food workers and all underpaid workers moves forward. Join us at 11:30 a.m. Thursday at 660 Boulevard NE, Atlanta, for the next ATL #FightFor15 worker rally.

Neil Sardana is organizing director for Atlanta Jobs with Justice.

Wage hike, ruling carry price-tag

By Karen Bremer

The cost of doing business has become increasingly expensive. It’s the product of repeated bad policies by elected officials following an aggressive agenda by organized labor. Ironically, the economic havoc they leave in their wake will eliminate the very jobs they proclaim to protect.

Earlier this month, the National Labor Relations Board overturned a 30-year rule that gave local franchisees, including many that operate in Atlanta, the freedom to run their day-to-day business practices independently of their franchiser.

The franchising model has successfully created millions of jobs; it did so by helping aspiring business owners realize their dream by offering resources to launch a locally owned operation underindividual management. This includes everything from capital investment to hiring employees and setting shift schedules to disciplinary actions and terminations.Unions, dissatisfied with declining numbers, would much rather target big corporations than a small, locally owned business with fewer employees. It has pushed to remove the traditional division between them and make franchisers liable for franchisees’ employment practices, though franchisers have no control over these practices. By tying franchisees to the hip of their parent company, labor unions can redefine a “small business” as “big business” and go after the parent in their organizing efforts.

This dissolution of the “joint-employer standard” will have a chilling effect on job creation, particularly in Atlanta, which leads the nation as home to the most franchise headquarters. Aspiring business owners will be less likely to pursue their dreams, since they will face a lot more hurdles as a franchisee. Franchisers will have to be more involved in the day-to-day activities of local employment practices, which will add to their franchisees’ costs. In the end, jobs will be impacted.

But it doesn’t end here. Unions are emboldened by the NLRB ruling and have begun a renewed push to demand minimum-wage hikes from business — as high as $15 per hour, more than double the current federal minimum wage.

Any hike in the minimum wage comes with an undesirable price tag. Restaurants are low-profit, low-margin operations. On average, a third of their budgets goes to wages and benefits. When the cost of labor rises for a restaurant operator, hard choices follow. Entry-level job opportunities are diminished, and employee hours are scaled back or, worse, eliminated altogether.

In an economic study on the impact of a $10.10 minimum wage, labor economist David Macpherson of Trinity University found more than 21,000 Georgians would lose their jobs at the $10.10 wage level. A total of 12,700 of these jobs are held by women.

This is not just bad news for restaurants; it’s bad news for the still-struggling Georgia economy. Macpherson estimated that both the straight wage cost of a $10.10 minimum wage and the total compensation cost of Social Security, Medicare, workers’ compensation and unemployment insurance would cost Georgia taxpayers $164 million if the base wage was increased to $10.10 an hour and public employees were covered by the new wage.

In 2014, restaurants account for 405,800 jobs in our state. When restaurants do well, we also help boost Georgia’s economy. For every $1 million spent in Georgia’s restaurants, 26.1 jobs are created.

A minimum-wage hike, coupled with a complete overhaul of the franchise model, would only jeopardize the well-being of a large portion of Georgia’s economy. It would also prevent the state’s restaurants from creating the nearly half-million jobs we’re expected to bring to the table over the decade.

Our elected officials would be wise to consider the economic ramifications of their policies, rather than blindly following the wish list of organized labor.

Karen Bremer is executive director of the Georgia Restaurant Association.

Sports museum a “gem of a venue”

By Dan Corso

Aug. 23 will live on as a monumental day in Atlanta’s history of college sports. That’s the day the College Football Hall of Fame opened and affirmed the region as a centerpiece of college football.

Atlanta opened more than a new building, though. We opened ourselves to the past and the game’s greats who made the sport special. The Hall parallels everything we love about college football – past players, rivalries and legendary coaches – with new-age technological advancements.

Atlanta also added a phenomenal downtown attraction, opening shortly after the National Center for Civil and Human Rights, to join the World of Coca-Cola, Georgia Aquarium and others. Downtown Atlanta continues to grow and become more of a destination.The sports attraction is unlike others. Designers created a first-class, state-of-the-art building that has the ability to swap out displays and artifacts faster than a kick-off return. The uniqueness means it will always have that new feel and offer a reason to visit.

The Hall expects a half-million annual visitors to view 768 football helmets lining the wall, watch a game-day movie, walk on a 45-yard football field, see 520-plus artifacts and become immersed in some of the game’s greatest and most bitter rivalries.

While the Hall celebrates the game and those who have made it special, it also offers a unique hospitality component. When the Atlanta Sports Council and other city leaders recruit future business, this gem of a building will certainly be on the list of potential venues.

An example of that recently occurred when NCAA officials were in town for a site visit in conjunction with the 2018-20 Men’s Final Four bid. We took them through the Hall; they were amazed at the building and felt it could be used for hospitality events if we are awarded a future Final Four. This is something none of our competitors can offer.

Atlanta will submit bids to potentially host a future Super Bowl and College Football Championship game. We know the Chick-fil-A Peach Bowl will host four national, semi-final, college football playoff games over the next 12 years, which would bring hundreds of thousands of fans to Atlanta.

This season, metro Atlanta will host numerous football match-ups, whether it’s the annual ones — Chick-fil-A Kickoff Game, Atlanta Football Classic, SEC Championship and Chick-fil-A Peach Bowl — or local teams — the Falcons, Georgia State and Georgia Tech. It’s a good bet fans in town might sneak in a visit to the newest attraction. There’s an obvious economic impact to sporting events in Atlanta, and the Hall is indirectly tied to that.

Dan Corso, executive director of the Atlanta Sports Council, is senior vice president of the Metro Atlanta Chamber.

 


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