Last week, with protesters chanting outside McDonald’s annual meeting, Chief Executive Don Thompson told attendees, according to news reports, that “the company has a heritage of providing job opportunities that lead to ‘real careers.’ ” While this brought sneers from many critics, I think he’s probably right…but mostly about the McDonald’s circa 1979.
Ray Kroc’s burger chain employed mostly low-skilled young people starting out. It was a common job for high-school students. And McDonald’s did indeed (and no doubt still does) teach some basic skills, including reliability, that are essential to beginning and sustaining a real career. A few workers move up to become managers and rise within the chain.
I use 1979 because I remember those McDonald’s. Also, this was the high-water mark of American manufacturing employment and the blue-collar middle-class, before the erosion or stagnation of most wages really kicked in. “High tech” was just getting started, while America was the world’s leader in making things of the highest value and technological skill. Destructive mass mergers, industry concentration, oligarchs in politics, bad trade deals, stunning inequality…all were in the future. Any town or city had its local banks, factories and other companies that provided career paths upward.
I also use the year because the average age of a member of the U.S. House is 57 years and the Senate 62 years. So this is the McDonald’s — and fast-food industry — they remember, too.
But that’s not the fast-food industry today. More older workers are employed there, and often as a last resort because other jobs aren’t available. In the broader economy, the once great American jobs machine is broken and inequality at Gilded Age levels. This is the reality of today’s economy and one reason protesters are showing up at Thompson’s manicured suburban headquarters and outside fast-food outlets around the country. His predecessor also made 787 times the average American worker’s pay.
The problem can’t be solved by McDonald’s (or its industry) alone — but agreeing to raise its wages would resonate because of its size. I suspect Kroc would push to do this in a heartbeat — it would be seen as good business for someone of his generation, before business morals and priorities changed. Yes, many individual restaurants are owned by franchisees, but this perch is the most profitable of American franchising. McDonald’s (like Wal-Mart) is struggling with sales while the working poor make squat wages. Does Thompson see a connection?
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Today’s Econ Haiku:
House prices are up
Will we be Palo Alto?
Or a lower base?