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Forum Post: Fast Food Pulls a Fast One

Posted 7 years ago on April 30, 2014, 3:38 p.m. EST by LeoYo (5909)
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Fast Food Pulls a Fast One

Wednesday, 30 April 2014 14:02
By Michael Winship, Moyers & Company | Op-Ed


Bad enough that the empty calories of many a fast-food meal have all the nutritional value of a fingernail paring. Even worse, the vast profits this industry pulls in are lining the pockets of its CEOs while many of those who work in the kitchens and behind the counters are struggling to eke out a living and can't afford a decent meal, much less a fast one.

Yes, you have heard this before. Over the last year or so, you've probably seen news coverage of the strikes and other job actions fast-food workers have taken against their employers. Maybe you've even read about the wage theft lawsuits that have been filed against McDonald's and Taco Bell, or the recent settlements in New York State against McDonald's, Pizza Hut and Domino's Pizza that have led to payments to employees of more than $2 million.

But, much in the way that Thomas Piketty's book Capital in the Twenty-First Century lays out the hard data backing up everything we've believed about the reality of vast income inequality in America, a trio of new reports confirms with solid statistics what we've suspected about the fast-food industry — that those in charge are gobbling up the profits voraciously while their workers are forced into public assistance. What's more, our tax dollars are subsidizing both the fast-food poor who need the help and the fast-food rich who don't.

First, a recent data brief from the National Employment Law Project (NELP) notes, "Lower-wage industries accounted for 22 percent of job losses during the recession, but 44 percent of employment growth over the past four years. Today, lower-wage industries employ 1.85 million more workers than at the start of the recession." In other words, as The New York Times more succinctly put it, "The poor economy has replaced good jobs with bad ones."

Michael Evangelist, author of the NELP report, told the Times, "Fast food is driving the bulk of the job growth at the low end — the job gains there are absolutely phenomenal. If this is the reality — if these jobs are here to stay and are going to be making up a considerable part of the economy — the question is, how do we make them better?"

A study from the public policy and advocacy group Demos, Fast Food Failure, confirms that, "The fast food industry is... one of the highest growth employers in the nation" but needs to address "imbalanced pay practices in order to mitigate the damaging effects of income inequality."

The numbers are stunning. According to Demos, "In 2012, the compensation of fast food CEOs was more than 1,200 times the earnings of the average fast food worker. Proxy disclosures recently released by fast food companies reveal that the ratio remained above 1,000-to-1 in 2013."

The average fast-food CEO made $23.8 million last year, four times what the average was in 2000, while fast-food workers "are the lowest paid in the economy. The average hourly wage of fast-food employees is $9.09, or less than $19,000 per year for a full-time worker, though most fast-food workers do not get full-time hours. Their wages have increased just 0.3 percent in real dollars since 2000."

That $19,000 is below the "poverty threshold" for someone supporting a family of three, and on average, fast-food workers actually make less than $12,000 because they don't get called into work for a full forty hours a week. The Demos report also cites numbers from a University of Illinois/University of California-Berkeley analysis that "87 percent of front-line fast food workers do not receive health benefits through their jobs. Since fast food employers do not pay for the critical needs of low-wage workers and their families, public programs foot the bill.

"According to the same study, more than half of front-line fast food employees are enrolled in a public assistance program, at a cost of nearly $7 billion per year." Those are public assistance programs for which we're paying and which the fast-food giants count on to keep their profit margin high while not paying employees what they need to care for their families.

Which brings us to the third report, this one from the progressive Institute for Policy Studies (IPS) and titled, Restaurant Industry Pay: Taxpayers' Double Burden. Double burden because in addition to the money in food stamps, Medicaid and other government assistance impoverished fast-food workers need to survive, taxpayers also are underwriting CEO compensation.

What? The IPS report explains that it's pulled off by means of "a loophole that allows all U.S. publicly held corporations to deduct unlimited amounts from their income taxes for the cost of executive stock options, certain stock grants, and other forms of so-called 'performance pay.' In effect, these companies are exploiting the U.S. tax code to send taxpayers the bill for the huge rewards they're doling out to their top executives."

IPS calculated the pay of the CEOs at the 20 largest corporate members of the National Restaurant Association — known as "the other NRA," the restaurant industry's multimillion spending lobbyist. Among those 20 are the CEOs of McDonald's, Chipotle, Starbucks, Dunkin' Brands and Yum! Brands, which owns Kentucky Fried Chicken, Taco Bell and Pizza Hut. IPS discovered that over the past two decades, these executives "pocketed more than $662 million in fully deductible 'performance pay,' lowering their companies' IRS bills by an estimated $232 million. That would be enough to cover the average cost of food stamps for more than 145,000 households for a year." In fact, the bigger the executive payoff, the less the fast-food company pays in taxes. Talk about a Happy Meal. You want fries with that?

So going back to that question Michael Evangelist, author of the NELP report, asks — how can we make things better? For one, as IPS recommends, we can close the performance pay loophole. The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act in Congress caps deductibility of employee compensation at $1 million, period. This could generate $50 billion in revenues over ten years, according to the House and Senate Joint Committee on Taxation. And California Congresswoman Barbara Lee has introduced the Income Equity Act. It cuts off corporate tax deductions for any executive's pay that's more than 25 times the salary of the company's lowest paid worker or $500,000, whichever is highest.

If you think that's unprecedented, IPS points out that both the Affordable Care Act and the TARP bank bailout sets a $500,000 deductibility cap "on pay for bailout recipients and health insurance firms. The deductibility caps on health insurance firms, designed to discourage these corporations from using profits from premiums to overcompensate their executives, go into effect this year."

Second, of course, raise the minimum wage, preferably to $15 an hour. As per the IPS report, "Minimum wage increase supporters highlight the potential stimulus effects of putting more money into the pockets of low-wage earners. Unlike those at the top end of the income scale, minimum wage workers tend to spend all of their earnings" — just to meet basic needs. "Every extra dollar that goes to a low-wage worker adds about $1.21 to the national economy. This economic stimulus would pump money into local economies and help create new jobs."

Ultimately, though, it's the companies that must take action. Yet some of their CEOs say they favor a wage hike but still allow the National Restaurant Association to continue doing their dirty work for them, lobbying fiercely, as they are right now in Congress against any minimum wage hike at all (this is the same gang that for more than twenty years has kept the minimum wage for tipped restaurant workers at a paltry $2.13 an hour).

Time for the CEOs to put their money where it counts, "to arrest the damage," as that Demos report says, "from pay disparity and restore the focus on long-term interests of the firm." Time to show some foresight, for as wages remain stagnant, purchases will go unmade, the health and wellbeing of workers will continue to decline and with that deterioration, the service and reliability on which the companies ultimately depend for profitability will crash as well.

If things continue as they are, the only thing fast about the fast-food business will be the speed of its fall.

This piece was reprinted by Truthout with permission or license.



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[-] 2 points by LeoYo (5909) 7 years ago

''As Consumers, We are Guinea Pigs'': Vermont Set to Become First State to Require GMO Food Labeling

Wednesday, 30 April 2014 13:20
By Amy Goodman and Aaron Mate, Democracy Now! | Video Interview


Vermont is poised to become the first state to require the labeling of genetically modified organisms in food products. Governor Peter Shumlin said he would sign the pro-GMO-labeling bill as early as this week. The new law would take effect in July 2016 and would also make it illegal to label foods containing GMOs as "all natural" or "natural." Vermont could prove to be the tipping point in a national movement to inform consumers about whether their food contains GMOs. Twenty-nine other states have proposed bills requiring labeling this year, and two have already passed similar bills. But those measures only take effect when neighboring states also approve the requirements. We speak with Vermont State Sen. David Zuckerman, who first introduced GMO labeling bills more than a decade ago when he served in the House.


This is a rush transcript. Copy may not be in its final form.

AARON MATÉ: We end today's show in Vermont, which is poised to become the first state to require the labeling of genetically modified organisms, or GMOs. A pro-GMO-labeling bill passed both chambers—passed by both chambers is now on the way to the Governor Peter Shumlin's desk, where he is expected to sign the bill as early as this week. The new law would take effect in July of 2016. Vermont Senator Bernie Sanders is among those who supports the effort to label GMO foods.

SEN. BERNIE SANDERS: The truth of the matter is, is that labeling of GMOs is also not a radical concept. It exists throughout the European Union. In fact, it exists throughout dozens and dozens of countries throughout the world. So anyone who tells you, "Well, we can't do this, this is just too complicated," they're not telling you the truth.

AMY GOODMAN: Twenty-nine other states have proposed bills requiring GMO labeling this year, and two have already passed bills requiring labeling, like Connecticut, but those measures only take effect when neighboring states also approve the requirements.

For more, we go to Vermont via Democracy Now! video stream to Vermont State Senator David Zuckerman of the Progressive Party. He's an organic farmer himself, who introduced the GMO labeling bills more than a decade ago when he was in the Vermont House. He co-owns Full Moon Farm.

David Zuckerman, welcome to Democracy Now! What happened? Explain what this bill actually means.

SEN. DAVID ZUCKERMAN: Well, what this bill means is, in 2016, when the average customer goes into a store, they can look at a package, and on that package somewhere there will be an indicator that the food was partially or completely made with genetic engineering.

AMY GOODMAN: And how did it happen? Talk about the origins of this legislation and why you think this is so important.

SEN. DAVID ZUCKERMAN: Well, really, in Vermont, we've been having discussions around genetic engineering in our food for well over a decade. And I've been in politics doing that as a spokesperson, really, for thousands of people across the state. And the momentum has just been building and building. We had a seed labeling and registration law that we passed about a decade ago. We had a bill that was going to require the manufacturers of these seeds to be responsible for them economically and environmentally. That passed but got vetoed by our governor about six years ago—a different governor, I should add. And then, in the last couple years, a real movement has been building for product labeling, as you know, both across the country and here in Vermont.

AARON MATÉ: Now, when similar measures came up in Washington and California, we saw food companies and Monsanto spend tens of millions of dollars to defeat those bills. So what kind of opposition did you face here? And do you expect legal challenges after it's enacted into law?

SEN. DAVID ZUCKERMAN: Well, I think many people would be surprised that there was not the airwave bombardment like there was in California and Washington. And in part, I think that's because the average Vermonter was so much more aware, that I think those companies felt it was an uphill battle here. They already had a population of people that were much more knowledgeable and wouldn't succumb to some of the propaganda that were in those kinds of ads, like your food's going to be 10 percent more, or "this feeds the world," when really there's plenty of food in the world; it's other issues as to why people are hungry. On the other hand, I do think that it's likely that the Grocery Manufacturers Association or some organization that represents a lot of the food manufacturers will probably sue us. And a lot of our work here in Vermont was working to draft a bill that would withstand such a lawsuit.

AMY GOODMAN: I want to turn to Margaret Laggis, the executive director of United Dairy Farmers of Vermont, also a lobbyist for the trade group Biotechnology Industry Organization, whose members include seed manufacturer Monsanto. She told the Burlington Free Press that pro-labeling activists use scare tactics such as telling people they were being used as guinea pigs for GMO products. Laggis went on to tell the Burlington Free Press, quote, "Once you scare people about their food, it's such a personally intimidating thing for people. It's really unfortunate that people have been scared when there's no science to support it." That was—this is Margaret Laggis speaking to the Council for Biotechnology Information in 2010.

MARGARET LAGGIS: Most people who are eating food today don't have any kind of scientific background, and so they have no basis to understand what food biotechnology is. They don't understand the benefits to the environment, the benefits for the farmer. And so there's just a huge education problem. And really, if we're going to be supersuccessful in the coming years to getting people to be very comfortable with this technology, we're going to have to do a lot more education and outreach.

AMY GOODMAN: So, that is Margaret Laggis. State Senator David Zuckerman, respond.


AMY GOODMAN: Why you're so concerned about GMOs?

SEN. DAVID ZUCKERMAN: Well, for a long time, there actually weren't long-term epidemiological studies on the impacts for humans, and it only just started having reasonable studies, because the seed companies controlled their seed and controlled their product for scientific research. Out of the European Union and some other areas, there are beginnings to—signs of scientific questions around how it impacts our digestive system and potentially even crosses placental barriers into fetuses. So there's a lot of scientific questions. And so, yes, I do think, as consumers, we are guinea pigs, because we really don't understand the ramifications of this.

I would also add, as an organic farmer, one of the things that these seed companies have used in their product is a naturally occurring bacteria that they've taken the gene from to make those crops resistant to certain pests. Unfortunately, with overuse of those genetic technologies, some of those pests are actually starting to show resistance. There was recently an article in The Wall Street Journal around the corn borer. And over time, what that means is that those naturally occurring tools that folks like myself and other organic farmers use in a very judicious way, by overusing them in the biotech industry, they're going to make those tools obsolete, which means either more chemical use on conventional farms or certain products not even becoming available as organically produced because eventually those pests would not be—we couldn't thwart those pests. So there's some real issues there.

She also mentioned that environmentally this is a good tool. In Tennessee alone, it was reported in a national conventional agricultural magazine, they're going to have to spend 120 million more dollars this year on added chemicals to their fields because glyphosate is no longer working like it once did. There are so many weeds that are resistant to it because of the overuse of Roundup Ready products, that in fact now stronger and more volumes of chemicals are starting to be used. So those trends are really turning around on the biotech industry, and I don't think their information is accurate.

AMY GOODMAN: Well, we want to thank you very much, Vermont State Senator David Zuckerman of the Progressive Party, also an organic farmer. We will follow this legislation when Governor Peter Shumlin signs it, which he's expected to do very soon, against—around the labeling of GMO products.

That does it for our show. Tonight, Democracy Now! co-host Juan González will be speaking at a screening of his film, Harvest of Empire: A History of Latinos in America. It's taking place in the Capitol at 5:30 in the visitors' center. You can go to our website at democracynow.org for details. I'll also be speaking at Dartmouth College on Friday, May 2nd, at 5:00 p.m.—there's a change of time—at Cook Auditorium, and you can check democracynow.org.

This piece was reprinted by Truthout with permission or license.