Every time you breathe, KFC sells over six pieces of Original Recipe chicken. Every second, McDonald’s sells seventeen Big Macs – roughly two burgers every time you blink. After you recover from the nausea of that statistic, consider the economics of all that fast food.
At the current average U.S. price of $4.56 per Big Mac, for instance, that means McDonald’s brings in about $6.7 million every day just with that burger alone. Over the course of a year that works out to roughly $2.44 billion shelled out by American consumers on McDonald’s signature menu item.
Worldwide, all the items on the McDonald’s menu bring in a hefty $27.56 billion every year, which is shared between the corporation’s stockholders, franchisees, management and its 1.8 million workers – whom are found nearly everywhere on Earth. It was these workers along with those from several other U.S.-based fast-food chains that made news last week when they staged a one-day walkout protest over poverty-level wages that even the businesses themselves implicitly admit are impossible to survive on. Class struggle, it seems, has come to a fast-food joint near you.
Post-industrial economy demands post-industrial organizers
The fact that organized labor, led by the Service Employees International Union, is now making some effort to organize fast-food workers represents something of a last gasp for American labor – a desperate move to stave off obsolescence for a movement that, at the height of its power, once elected U.S. presidents, shepherded sweeping socio-economic legislation through Congress, and made well-heeled corporate boards shake in fear and rage every time a contract came up for negotiation.
Those heady days have long since passed, of course, but the irony of the remnants of America’s once-powerful unions chasing after fast-food workers cannot be understated. Once upon a time, such workers were scorned by powerful union bosses certain that the future of unionism and the American left was to be found in a powerful industrial sector of factories, foundries and mills.
That’s no longer the case — with the disappearance of those fortresses of organized labor, laid waste by the combination of technological change, globalization and incompetent leadership grown lazy on monopoly profits, has come a new realization that American unions cannot remain tied to a shrinking industrial sector, nor can they become the plaything of public employees, nor remain the preserve of specialized craft unions. Doing so risks ghettoizing unions in niche markets, thus making them easy prey for those seeking to scapegoat labor for America’s economic problems – a proposition that often has credence among the envious workers and voters left outside the confines of comfortable union contracts.
To survive, American labor has to be relevant to workers struggling in the broader private economy – which has sunk to record-low unionization rates – and, as such, the service industry and its long-neglected workforce of waitresses, busboys, fast-food workers, hotel bellhops, store clerks, janitors and maintenance men.
Like it or not, America’s post-industrial workforce requires a post-industrial labor movement that is supple and swift enough to organize a hypercompetitive sector featuring an inchoate mass of disenfranchised, under-skilled and commoditized workers who often have little in common with one another. The fast-food walkout this past week thus represents a first stab at this massive, much-needed new project, but much more needs to be done.
Replicate the Detroit regime? Bad idea.
Unions attempting to organize this sector need to recognize that the goal should not be to replicate the older, industrial unions. The service industry is a very different beast compared with the industrial sector, and service-sector unionization needs to reflect that.
Take, for instance, the standard, industry-wide contract that was commonly imposed by the United Automobile Workers on Detroit’s ‘Big Three.’ For an industry dominated by a small handful of companies – an oligopoly – such a contract made sense. So long as all three adhered to the same standard, none could gain an advantage over the other by defecting from the agreement. Doing so would merely bring the wrath of the UAW, which in effect played the part of a third-party enforcer in an oligopolistic agreement aimed at raising prices.
Since the cost of defecting would be high indeed, none of the Big Three had incentive to buck a system in which everyone benefitted. Costs were higher, yes, but in the relatively closed, pre-free-trade-explosion U.S. economy, such costs were commonly passed on to the consumer – resulting in higher wages along with higher prices. The entry of foreign competitors that were neither party to nor beholden by the dictates of the regime created by the ‘Treaty of Detroit’ has since led to its collapse.
Thus the first lesson needed to be learned by Labor’s service-sector organizers: One-size-fits-all partial organization of a sector, in which a high-degree of competition is the norm, is self-defeating.
This can be seen in the collapse of the Detroit system, but looking more broadly one can see that wherever consumers can easily switch between competing firms, partial unionization focusing solely on winning higher wages — at the cost of worker productivity and company flexibility — is doomed. Not only will this not work, but it would give unions a bad name, recalling old horror stories of union contracts specifying, for instance, that only electricians can change light bulbs. Such contracts may bring temporary benefits, but as Detroit’s fate indicates, they won’t last.
Part of a healthy economy
A better approach is for unions to bring additional value to the companies they are trying to organize – in essence, to recast themselves as valuable partners rather than hated enemies. Higher-productivity workers usually attract higher wages, so the role of the union should be not simply to protect its members or carve out greater benefits for itself at the expense of competitiveness, but to increase profits – and labor’s share of it – by making the company more nimble and productive. Detroit’s unions may have done just that at one point, but as time went on it became less and less clear what value UAW actually contributed to a firm’s bottom line.
A fast-food union, for instance, might do this by agreeing – in exchange for higher wages – that union benefits do not apply to workers if they are consistently late or judged by a third-party observer to provide service substandard from the industry norm. They might also tailor different agreements with different companies to take into account the varying strengths, weaknesses and market position of employer partners. A startup, for instance, cannot be expected to provide the same benefits and protections as a corporate behemoth like McDonald’s or Wal-Mart.
Flexibility should thus be unions’ watchword, and they should aim to create a healthy, profitable industry as a whole – not just a few, well-protected workers in a handful of firms. To the UAW’s credit, that union eventually came around to precisely this point of view as the losses piled up, but it remains to be seen whether the shift in perspective from partner-in-crime to industry steward has come too little, too late for the American auto industry. Service-sector organization efforts, in contrast, need to start from this perspective from the very beginning.
Ending the gold watch mentality
Second, it should be recognized that in the post-industrial economy, the old model of a worker joining a union at a relatively young age and then spending the entirety of his or her working life within the confines of a single company, simply does not apply to many “low-end” service-orientated jobs – or, in fact, many modern jobs at all. Service-sector companies like restaurants, for instance, are both diverse and hypercompetitive, and their workforces reflect that. Workers will join for a time until they find better work at another company or transfer out of the sector. Likewise, many may not even desire full-time work.
As such, the entire concept of seniority needs to be seriously reassessed to take this into account. While in theory seniority means experience, too often it is simply cover for older workers to shirk while younger workers bear the brunt of management demands. Seniority needs to become much more meritocratic, not automatic, and actually reflect productivity – not simply total hours clocked on the job. Reforming seniority rules also has the added benefit of knocking back deleterious good-‘ol-boy networks that, like their counterparts in corporate management, stymie change, increase rigidity and foster corruption.
Furthermore, a service-sector union will have to accept the fact that many of its members will eventually leave either the company they initially joined or the entire sector altogether. Thus, it should be a priority to make benefits attractive to job-hoppers and sector-leavers, by making them portable so long as dues are paid and members remain in good standing. Providing insurance is one way to do this, and unions are increasingly taking on the mantle of managing member health benefits rather than putting the onus for managing such costs on employers.
Another possibility is to maintain a list of preferential hires for a wide range of service-sector work that consists of anyone with a union membership. Such a job bank would act as an employment agency for any member in good standing and a one-stop shop for firms looking to fill positions. As such, much of the cost of screening and hiring new employees could be transferred from the company to the union – subject to third-party verification and monitoring – that could greatly benefit both. Service-sector unions could also branch out to provide other types of perks such as child care – imagine a nationwide chain of Tiny Tots Daycares run by the SEIU that offered reduced prices to members – and educational opportunities through university partners. Such benefits would prove attractive to all sorts of workers, not just service-sector burger-slingers.
Conclusion
Ultimately, it should be recognized that the worker’s paradise will not be built solely through unionization in one sector or even a couple. Doing so merely divides workers in one sector from another, and adds costs to that particular sector – again, see Detroit.
Pushing national programs that provide significant benefits to working people, regardless of sector or type of job, should be prioritized because it lifts the cost of expensive programs like, say, health insurance, off the backs of company, worker and union alike. Shorn of such burdens, all three can go back to focusing on producing wealth as efficiently as possible and dividing the proceeds in an amicable and mutually-beneficial manner.
Democracies, if they are to survive, need a range of political, economic and cultural actors to participate in political life if a balance beneficial to everyone in the body politic is to be maintained. American labor was once a powerful force that provided a much-needed counterbalance to the overweening power of High Finance and Big Business, but it is no longer because its leadership failed to adapt to changing circumstances – just like the industrial dinosaurs they had been partnered with.
Labor’s consequent erosion over the decades since our transition to a neoliberal, globalized, post-industrial economy has not just undermined American workers as a whole, but has enervated a once-proud institution that was a cornerstone of our post-war, middle-class democracy. The U.S. needs a healthy labor movement to maintain that balance, and service-sector unionization is a first-step in a needed direction – so long as the glaring mistakes of past union models can be avoided.
The views expressed in this article are the author’s own and do not necessarily reflect Mint Press News editorial policy.