Pay Gap Grows at McDonalds: $8/hr Worker vs. $8 Million CEO

1x1.trans Pay Gap Grows at McDonalds: $8/hr Worker vs. $8 Million CEO

Tyree Johnson is employed at not one but two Chicago area McDonald’s. Johnson scrubs himself with a bar of soap in a McDonald’s bathroom and puts on deodorant because hygiene and appearance are part of his annual compensation reviews.

Bloomberg’s Leslie Patton notes Johnson, 44, needs the two paychecks to pay rent for his apartment at a single-room occupancy hotel on the city’s north side.

“While he’s worked at McDonald’s stores for two decades, he still doesn’t get 40 hours a week and makes $8.25 an hour, minimum wage in Illinois.”

Although fast-food restaurants have added positions more than twice as fast as the average US company, jobs created by companies such as Burger King, Pizza Hut, Taco Bell and KFC brands, are among the lowest-paid.

And the pay gap separating fast-food workers from their chief executive officers is growing at each of those companies.

According to data compiled by Bloomberg, the disparity has doubled at McDonald’s in the last 10 years, even as the company lobbied against minimum-wage increases and suppressed employee attempts of organizing a union.

Leslie claims Johnson would need about a million hours of work — or more than a century on the clock — to earn the $8.75 million paid to the Chicago suburb based McDonald’s then-CEO Jim Skinner last year.

“Johnson’s work flipping burgers and hoisting boxes of french fries, like millions of other jobs in low-wage industries, helps explain why income inequality grew after the 2007-2009 recession ended.”

And based on data from the U.S. Census Bureau’s Current Population Survey, older underemployed workers are staffing fast-food restaurants at a higher rate.

“The sheer number of adults in the industry has just exploded because fast-food restaurants not only survived, but thrived during the economic recession,” said Saru Jayaraman, director of the Food Labor Research Center at the University of California at Berkeley.

As Leslie points out, the recovery from the last downturn has been the most uneven in recent history.

1x1.trans Pay Gap Grows at McDonalds: $8/hr Worker vs. $8 Million CEO

Tyree Johnson, a 20-year McDonald’s employee making minimum wage, crosses a street on his way to work in Chicago. Image: Bloomberg

The over 1 million households whose incomes put them in the top 1 percent of the U.S. saw their earnings increase 5.5 percent last year, according to census estimates. Earnings fell by almost 2 percent for the 97 million households in the bottom 80 percent.

The widening income disparity is most pronounced in the restaurant and retail businesses.

“The total number of people employed in the U.S. at Wal-Mart Stores Inc. and McDonald’s and Yum Brands restaurants exceeds the entire 2.7 million population of Chicago. Net income at those three companies has jumped by at least 22 percent from four years ago.”

Leslie reports that shareholders, not employees, have reaped the rewards, citing, for example, McDonald’s who spent $6 billion on share repurchases and dividends last year, the equivalent of $14,286 per restaurant worker employed by the company.

And according to the Economic Policy Institute, a think tank that advocates for low-and middle-income workers, restaurant companies have formed an industry-wide effort to freeze the minimum wage, whose purchasing power is 20 percent less than in 1968.

1x1.trans Pay Gap Grows at McDonalds: $8/hr Worker vs. $8 Million CEO
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1x1.trans Pay Gap Grows at McDonalds: $8/hr Worker vs. $8 Million CEO

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