Stroking

AT A 1999 conference on foodservice equipment, top American executives from Burger King, McDonald’s, and Tricon Global Restaurants, Inc. (the owner of Taco Bell, Pizza Hut, and KFC) appeared together on a panel to discuss labor shortages, employee training, computerization, and the latest kitchen technology. The three corporations now employ about 3.7 million people worldwide, operate about 60,000 restaurants, and open a new fast food restaurant every two hours. Putting aside their intense rivalry for customers, the executives had realized at a gathering the previous evening that when it came to labor issues, they were in complete agreement. “We’ve come to the conclusion that we’re in support of each other,” Dave Brewer, the vice president of engineering at KFC, explained. “We are aligned as a team to support this industry.” One of the most important goals they held in common was the redesign of kitchen equipment so that less money needed to be spent training workers. “Make the equipment intuitive, make it so that the job is easier to do right than to do wrong,” advised Jerry Sus, the leading equipment systems engineer at McDonald’s. “The easier it is for him [the worker] to use, the easier it is for us not to have to train him.” John Reckert – director of strategic operations and of research and development at Burger King – felt optimistic about the benefits that new technology would bring the industry. “We can develop equipment that only works one way,” Reckert said. “There are many different ways today that employees can abuse our product, mess up the flow… If the equipment only allows one process, there’s very little to train.” Instead of giving written instructions to crew members, another panelist suggested, rely as much as possible on photographs of menu items, and “if there are instructions, make them very simple, write them at a fifth‑grade level, and write them in Spanish and English.” All of the executives agreed that “zero training” was the fast food industry’s ideal, though it might not ever be attained.

While quietly spending enormous sums on research and technology to eliminate employee training, the fast food chains have accepted hundreds of millions of dollars in government subsidies for “training” their workers. Through federal programs such as the Targeted Jobs Tax Credit and its successor, the Work Opportunity Tax Credit, the chains have for years claimed tax credits of up to $2,400 for each new low‑income worker they hired. In 1996 an investigation by the U.S. Department of Labor concluded that 92 percent of these workers would have been hired by the companies anyway – and that their new jobs were part‑time, provided little training, and came with no benefits. These federal subsidy programs were created to reward American companies that gave job training to the poor.

Attempts to end these federal subsidies have been strenuously opposed by the National Council of Chain Restaurants and its allies in Congress. The Work Opportunity Tax Credit program was renewed in 1996. It offered as much as $385 million in subsidies the following year. Fast food restaurants had to employ a worker for only four hundred hours to receive the federal money – and then could get more money as soon as that worker quit and was replaced. American taxpayers have in effect subsidized the industry’s high turnover rate, providing company tax breaks for workers who are employed for just a few months and receive no training. The industry front group formed to defend these government subsidies is called the “Committee for Employment Opportunities.” Its chief lobbyist, Bill Signer, told the Houston Chronicle there was nothing wrong with the use of federal subsidies to create low‑paying, low‑skilled, short‑term jobs for the poor. Trying to justify the minimal amount of training given to these workers, Signer said, “They’ve got to crawl before they can walk.”

The employees whom the fast food industry expects to crawl are by far the biggest group of low‑wage workers in the United States today. The nation has about 1 million migrant farm workers and about 3.5 million fast food workers. Although picking strawberries is orders of magnitude more difficult than cooking hamburgers, both jobs are now filled by people who are generally young, unskilled, and willing to work long hours for low pay. Moreover, the turnover rates for both jobs are among the highest in the American economy. The annual turnover rate in the fast food industry is now about 300 to 400 percent. The typical fast food worker quits or is fired every three to four months.

The fast food industry pays the minimum wage to a higher proportion of its workers than any other American industry. Consequently, a low minimum wage has long been a crucial part of the fast food industry’s business plan. Between 1968 and 1990, the years when the fast food chains expanded at their fastest rate, the real value of the U.S. minimum wage fell by almost 40 percent. In the late 1990s, the real value of the U.S. minimum wage still remained about 27 percent lower than it was in the late 1960s. Nevertheless, the National Restaurant Association (NRA) has vehemently opposed any rise in the minimum wage at the federal, state, or local level. About sixty large food‑service companies – including Jack in the Box, Wendy’s, Chevy’s, and Red Lobster – have backed congressional legislation that would essentially eliminate the federal minimum wage by allowing states to disregard it. Pete Meersman, the president of the Colorado Restaurant Association, advocates creating a federal guest worker program to import low‑wage foodservice workers from overseas.

While the real value of the wages paid to restaurant workers has declined for the past three decades, the earnings of restaurant company executives have risen considerably. According to a 1997 survey in Nation’s Restaurant News , the average corporate executive bonus was $131,000, an increase of 20 percent over the previous year. Increasing the federal minimum wage by a dollar would add about two cents to the cost of a fast food hamburger.

In 1938, at the height of the Great Depression, Congress passed legislation to prevent employers from exploiting the nation’s most vulnerable workers. The Fair Labor Standards Act established the first federal minimum wage. It also imposed limitations on child labor. And it mandated that employees who work more than forty hours a week be paid overtime wages for each additional hour. The overtime wage was set at a minimum of one and a half times the regular wage.

Today few employees in the fast food industry qualify for overtime – and even fewer are paid it. Roughly 90 percent of the nation’s fast food workers are paid an hourly wage, provided no benefits, and scheduled to work only as needed. Crew members are employed “at will.” If the restaurant’s busy, they’re kept longer than usual. If business is slow, they’re sent home early. Managers try to make sure that each worker is employed less than forty hours a week, thereby avoiding any overtime payments. A typical McDonald’s or Burger King restaurant has about fifty crew members. They work an average of thirty hours a week. By hiring a large number of crew members for each restaurant, sending them home as soon as possible, and employing them for fewer than forty hours a week whenever possible, the chains keep their labor costs to a bare minimum.

A handful of fast food workers are paid regular salaries. A fast food restaurant that employs fifty crew members has four or five managers and assistant managers. They earn about $23,000 a year and usually receive medical benefits, as well as some form of bonus or profit sharing. They have an opportunity to rise up the corporate ladder. But they also work long hours without overtime – fifty, sixty, seventy hours a week. The turnover rate among assistant managers is extremely high. The job offers little opportunity for independent decision‑making. Computer programs, training manuals, and the machines in the kitchen determine how just about everything must be done.

Fast food managers do have the power to hire, fire, and schedule workers. Much of their time is spent motivating their crew members. In the absence of good wages and secure employment, the chains try to inculcate “team spirit” in their young crews. Workers who fail to work hard, who arrive late, or who are reluctant to stay extra hours are made to feel that they’re making life harder for everyone else, letting their friends and coworkers down. For years the McDonald’s Corporation has provided its managers with training in “transactional analysis,” a set of psychological techniques popularized in the book I’m OK – You’re OK (1969). One of these techniques is called “stroking” – a form of positive reinforcement, deliberate praise, and recognition that many teenagers don’t get at home. Stroking can make a worker feel that his or her contribution is sincerely valued. And it’s much less expensive than raising wages or paying overtime.

The fast food chains often reward managers who keep their labor costs low, a practice that often leads to abuses. In 1997 a jury in Washington State found that Taco Bell had systematically coerced its crew members into working off the clock in order to avoid paying them overtime. The bonuses of Taco Bell restaurant managers were tied to their success at cutting labor costs. The managers had devised a number of creative ways to do so. Workers were forced to wait until things got busy at a restaurant before officially starting their shifts. They were forced to work without pay after their shifts ended. They were forced to clean restaurants on their own time. And they were sometimes compensated with food, not wages. Many of the workers involved were minors and recent immigrants. Before the penalty phase of the Washington lawsuit, the two sides reached a settlement; Taco Bell agreed to pay millions of dollars in back wages, but admitted no wrongdoing. As many as 16,000 current and former employees were owed money by the company. One employee, a high school dropout named Regina Jones, regularly worked seventy to eighty hours a week but was paid for only forty. Lawsuits involving similar charges against Taco Bell are now pending in Oregon and California.