McDonald's admits potentially adverse effects from wage strikes

 
March 6, 2014

Growing, organized strikes protesting low wages and put together by a coalition of quick-service employees have gotten the attention of McDonald's.

The company filed its annual report earlier this week with the Securities and Exchange Commission, which included an acknowledgment of the strikes and questioned how they could potentially affect the brand.

The organized strikes began in late 2012 and have since grown across the country. A protest held in December 2013 was held in more than 100 cities.

The full SEC report is available online.

The company's responses regarding this specific topic, initially pointed out by Salon, include:

  • "The impact of campaigns by labor organizations and activists, including through the use of social media and other mobile communications and applications, to promote adverse perceptions of the quick-service category of the IEO segment or our brand, management, suppliers or franchisees, or to promote or threaten boycotts, strikes or other actions involving the industry, McDonald's or our suppliers and franchisees;"
  • The impact of events such as boycotts or protests, labor strikes and supply chain interruptions (including due to lack of supply or price increases) that can adversely affect us or the suppliers, franchisees and others that are also part of the McDonald's System and whose performance has a material impact on our results;"
  • "The impact on our margins of labor costs that we cannot offset through price increases, and the long-term trend toward higher wages and social expenses in both mature and developing markets, which may intensify with increasing public focus on matters of income inequality;"
  • "The impact of events such as boycotts or protests, labor strikes and supply chain interruptions (including due to lack of supply or price increases) that can adversely affect us or the suppliers franchisees and others ... whose performance has a material impact on our results ..."

Labor activists have responded to McDonald's filing. In a statement released by the group Low Pay Is Not OK, 16-year Chicago McDonald's employee Isabel Vazquez said, "With nearly $5.6 billion in profits, McDonald's can clearly afford to pay us more. The company should be worried about continued worker protests, because we are not going to stop taking action until we win $15 and the right to form a union without retaliation."


Topics: Operations Management , Staffing & Training , Trends / Statistics


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