Reference no: EM131916304

Problem: Social Responsibility Cases Two to Four: Wages

Case Two: Fast-Food Pay Unfair/Unconscionable?

Caroline Durocher, a fast-food server at a Taco Bell restaurant in Seattle, Washington, joined co-workers in walking off the job in late May 2013, thus shutting down the restaurant. Seattle became at least the seventh U.S. city facing strikes by fast-food workers. Durocher made $9.19 per hour and worked about 27 hours per week. She had been working on an associate of arts degree and had hopes of becoming a psychologist, but economic difficulties forced her to leave school. Durocher explained why she went on strike:

My employer has pushed and pushed my co-workers and me and gotten everything they can out of us. This week we joined together and pushed back. I was one of the first fast-food workers to walk off the job . . . in Seattle, and . . . more workers are continuing to take a stand for a raise to $15 an hour and the right to organize without retaliation. We work in one of the fastest growing industries in the nation, and our companies are making huge-even record-profits, but we don't see enough of that money. We barely earn enough to pay for basics like rent, food and transportation to and from work. I have worked low-wage jobs since I was 16 years old, and now, at 21, am reluctantly sharing a studio apartment with my dad, working the late shift at Taco Bell.126

Seattle strikers also targeted Wendy's, McDonald's, Subway, and others. Chicago, New York City, St. Louis, and Detroit are among the other cities where fast-food workers went on strike, rallied, and demonstrated for $15 per hour wages and the right to organize without retaliation. The National Restaurant Association, responding to the strikes, said that the fast-food industry offers an entry to the American Dream and argued that margins are tight: It's important to remember that a typical restaurant operates on an average of 3-4 percent pretax profit margin, and more than 90 percent of restaurants are small businesses. Any additional labor cost can negatively impact a restaurant's ability to hire or maintain jobs.127 The U.S. Census Bureau's poverty threshold is about $23,000 for a family of four.128 Fast-food workers nationally-median age 28, two-thirds of whom are women- when working 40 hours weekly, average about $8.76 per hour ($18,000 annually), a sum lower than all other reported occupations.129 Big box retailers and fast-food chains are projected to provide 7 of 10 available jobs in the next decade as the U.S. economy is expected to continue reducing middle-class jobs while corporate wealth grows.130

Case Two Questions

1. a. Should the socially responsible company pay low-wage, fast-food workers more than the market requires? Explain.

b. Is the free market the best measure of a "fair" wage for all? Explain.

2. Do you find anything morally amiss in an American economy that pays so poorly for hard-working, but low-skilled, fast-food labor? Explain.

3. Should we, as consumers, blame ourselves for the low wages of fast-food workers? Explain.