Question

An important way unions are making an impact is through shaping public opinion and lobbying for government action. Unions present issues as a matter of social responsibility, hoping legislators and managers will take the actions unions once sought through collective bargaining. The Fight for 15 campaign, supported by the Service Employees International Union (SEIU), is a case in point. The campaign seeks an increase in the minimum wage to $15 an hour. That would more than double the federal minimum, and it would be about two-thirds more than the $9 per hour earned by the average fast-food worker in the United States.

Fast-food workers are the face of the SEIU-backed campaign. Protesters have rallied in front of McDonald’s headquarters in Oak Brook, Illinois, and at restaurants in more than 100 cities. As these protests have drawn media attention, the union has coordinated international protests by workers in 30 countries. Global pressure could be important, since international markets are important sources of corporate growth.

The SEIU’s objectives in backing the campaign focus on fairness, not membership growth. Whereas fast-food restaurants once employed mainly young people, the Great Recession drove more adults to take those jobs. With more people trying to support families on fast-food pay, governments are spending billions of dollars on public assistance to working people. The SEIU’s president, Mary Kay Henry, has expressed the issue in ethical terms: “Americans know that it’s wrong that so many families have no financial security, no matter how hard they work.” She also expresses a broader social benefit from raising the minimum wage: “more money in the pockets of workers” will help “get our economy moving again.”

The fast-food industry as a whole is among the nation’s largest and fastest-growing employers, with roughly 4 million workers, but it has been a difficult one for unions to organize. Most workers are not employed by large corporations but by franchisees serving local markets. The franchisees point out that their profit margins are so

small that they cannot afford higher wages without major price increases. A $15 minimum wage would force them to replace workers with automation, slowing job growth in one of the few industries where it is strong.

With these obstacles, why is the SEIU bothering to rally fast-food workers? One reason is that it positions the union as relevant to today’s workers. The SEIU has made a point of experimenting with new tactics, and at a time when overall union membership is falling, the SEIU’s membership is growing. In addition, some collective bar-gaining agreements set wages relative to the minimum wage, so some members could see direct benefits from this activity. And a recent NLRB ruling that McDonald’s could be treated as a joint employer with its franchisees in labor complaints could have huge implications for how restaurant companies deal with their employees in the future.

Questions

1. What are the goals of management, unions, and society in this situation?

2. How might fast-food companies and their franchisees approach the minimum-wage issue through union-management collaboration? Would you recommend this approach? Why or why not?

Answer 1

1. What are the goals of management, unions, and soci- ety in this situation?
   In such a situation, the goal of management, unions and society is to arrive at a win-win situation wherein the management must ensure sufficient pay to employees, the unions must ensure they motivate their members (who are workers/employees) to provide higher performance and maintain high productivity so that the business can be successful and earn higher profits. This will ultimately help the management raise the minimum wages. Also, the society must be understanding towards the businesses and pay in proportion to the services rendered to them, i.e. in form of tips. Thus, the three must focus on economic upliftment and stability in the financial status in the country.

2. How might fast-food companies and their franchi- sees approach the minimum-wage issue through union-management collaboration? Would you rec- ommend this approach? Why or why not?
   Union-management collaboration would facilitate a win-win situation wherein the fast-food companies and franchises would ensure sufficient minimum wages to their employees while the union can assure performance and higher reliability. This would thus be a collaborative effort towards providing better service and products to customers. Gaining consumer satisfaction and ensuring economic stability. I would definitely recommend this approach as it would cause benefit to all the related stakeholders - boost sales and profit margins for management, higher wages to employees and better foods and service to customers.