Wages So Low You'll Freak

January 11, 2011 11:01 AM

In November of 2009, the IWW set up shop in Minneapolis. Similar to their Starbucks campaign, organizers set up the Jimmy John's Workers Union, and began attempting to unionize the employees of local franchises of the sandwich chain, "seeking a pay increase to above minimum wage, consistent scheduling and minimum shift lengths, regularly scheduled breaks, sick days, no-nonsense workers compensation for job-related injuries, an end to sexual harassment at work, and basic fairness on the job.". When local franchise owners MikLin Enterprises refused to meet with employees, union organizers scheduled a National Labor Relations Board election. As allegations of dirty tricks came out, the union lost in a stunningly close vote. The IWW pressed the NLRB to look into the alleged misconduct, and they did.

The earlier vote has been nullified as a part of a settlement between MikLin and the NLRB. The union is resuming its push for official recognition.
posted by Subcommandante Cheese (84 comments total)

"If franchise owners Mike and Rob Mulligan refuse to cooperate, the union has indicated a willingness to return to the trenches and continue the fight for union recognition, this time on terms that are much more favorable to the union due to the settlement agreement.

Under the NLRB settlement, Jimmy John's must cease engaging in a wide range of unlawful anti-union activities, post notices informing employees of the company's new commitment to obeying the law, and host a series of mandatory employee meetings in which a representative of the NLRB will read the notices in the presence of the company owner."
posted by Subcommandante Cheese at 11:04 AM on January 11, 2011 [2 favorites]

This post just made me fall in love with metafilter even more.
Thanks for putting it together and sharing.

I don't have a lot constructive to add right now.
posted by Stagger Lee at 11:07 AM on January 11, 2011 [4 favorites]

"Do you know what these people are about?" Mulligan asked, referring to the IWW. "They espouse the abolition of capitalism, the abolition of the wage system. They embrace anarchy and sabotage as legitimate objectives."

Yeah, he's the kind of stable management that I look for when seeking employment.
posted by delfin at 11:08 AM on January 11, 2011 [2 favorites]

Yeah, he's the kind of stable management that I look for when seeking employment.

Well he's not wrong. But that's part of their appeal.
posted by Stagger Lee at 11:09 AM on January 11, 2011 [24 favorites]

Under the NLRB settlement, Jimmy John's must cease engaging in a wide range of unlawful anti-union activities

Kind of unfortunate that it took a settlement to get the management to stop doing things that were already illegal anyway.
posted by kenko at 11:10 AM on January 11, 2011 [9 favorites]

"Do you know what these people are about?" Mulligan asked, referring to the IWW. "They espouse the abolition of capitalism, the abolition of the wage system. They embrace anarchy and sabotage as legitimate objectives."

Huh. He says that like that's a bad thing.
posted by Floydd at 11:12 AM on January 11, 2011 [9 favorites]

This is a bad strategy. All unionizing a chain restaurant is going to do is make it more expensive then the other chain restaurants and eventually force them out of business. You have to organize entire industries for organized labor to be effective.

Unions can be most effective when you are in low marginal cost relative to average cost industries (mostly assembly type things) - where the increased productivity offsets the higher labor costs, and the decremental returns to labor strife are high.
posted by JPD at 11:13 AM on January 11, 2011 [1 favorite]

Another reason not to go there. Which is sad, because I love that they deliver to my office by bike.

I'd bankroll their unionization if it meant that they could take down some of those godawful signs. But what do you expect from a place that thinks it's kitschy to make fun of hippies? (Have you SEEN your employee and customer base, people?)
posted by Madamina at 11:15 AM on January 11, 2011 [1 favorite]

So, JPD, the IWW should sneak up on the whole fast sandwich industry and then call for union elections everywhere all at once?
posted by notyou at 11:17 AM on January 11, 2011 [2 favorites]

JPD: How is an entire industry going to be organized except a piece at a time? Successful campaigns to develop unions coupled with communications strategies that demonstrate the numerous public benefits of a well-compensated, stable workforce can help encourage people to make buying choices based on values, not just prices. This can force larger chains to alter their behavior to remain competitive. It's a long, hard struggle to get enough people organized to make such systemic changes.
posted by cubby at 11:19 AM on January 11, 2011 [10 favorites]

"Do you know what these people are about?" Mulligan asked, referring to the IWW. "They espouse the abolition of capitalism, the abolition of the wage system. They embrace anarchy and sabotage as legitimate objectives."

Yeah, he's the kind of stable management that I look for when seeking employment.

That's actually a pretty accurate description of the IWW. They've always been more radical than the AFL/CIO.
posted by TrialByMedia at 11:21 AM on January 11, 2011

How is an entire industry going to be organized except a piece at a time?

right that's the point - you can only organize industries where the fixed costs are high and the decremental returns to labor strife are high, because anything that lacks those characteristics is doomed to fail.

Even if you do successfully organize businesses like this you are probably dooming them to failure unless you can convince consumers its worth paying more for unionized labor - and experience tells you that isn't the case.

The flip side of it is, unionizing the right kinds of businesses will actually show that unions aren't a net negative to the bottom line because of increased productivity et al, and it'll be easier to unionize other companies.
posted by JPD at 11:28 AM on January 11, 2011 [1 favorite]

TrialByMedia: They've always been more radical than the AFL/CIO.

And have better songs (bonus: a pretty good explanation of what the IWW is all about from Utah Phillips).
posted by Kattullus at 11:29 AM on January 11, 2011 [2 favorites]

Damnit, I love Jimmy John's. Even more than Chick-Fil-A. Their bread is awesome and their unwiches are one of the few good low-carb options from a sandwich chain.
posted by kmz at 11:31 AM on January 11, 2011

Successful campaigns to develop unions coupled with communications strategies that demonstrate the numerous public benefits of a well-compensated, stable workforce can help encourage people to make buying choices based on values, not just prices. This can force larger chains to alter their behavior to remain competitive. It's a long, hard struggle to get enough people organized to make such systemic changes.


Unfortunately I don't think that is possible, and I'm yet to see any evidence that it is.
posted by JPD at 11:35 AM on January 11, 2011

Even if you do successfully organize businesses like this you are probably dooming them to failure unless you can convince consumers its worth paying more for unionized labor - and experience tells you that isn't the case.

Experience tells us no such thing.

The flip side of it is, unionizing the right kinds of businesses will actually show that unions aren't a net negative to the bottom line because of increased productivity et al, and it'll be easier to unionize other companies.

Been there, done that. It didn't stop the rich and their political cronies from dismantling all the progress.

One side of me cheers for these workers. The other side mourns that we have to relearn what we already know. (2011 is 1911 all over again.)
posted by Benny Andajetz at 11:35 AM on January 11, 2011 [12 favorites]

BTW, IWW is one of those acronyms that's easy to get wrong. And apparently it's not just quiz bowlers that get it wrong.
posted by kmz at 11:36 AM on January 11, 2011 [1 favorite]

This is a bad strategy. All unionizing a chain restaurant is going to do is make it more expensive then the other chain restaurants and eventually force them out of business.


"...the workers are seeking a pay increase to above minimum wage, consistent scheduling and minimum shift lengths, regularly scheduled breaks, sick days, no-nonsense workers compensation for job-related injuries, an end to sexual harassment at work, and basic fairness on the job."

We're not talking a gold plated rolls royce for every worker here. If the employer can't afford to meet those demands, they shouldn't have workers.
posted by Stagger Lee at 11:36 AM on January 11, 2011 [19 favorites]

You have to organize entire industries for organized labor to be effective.


Of course that's palpably untrue for a range of reasons. Here resolving some of the workers' complaints (consistent scheduling, sexual harrassment, basic fairness, even regularly scheduled breaks) would likely have a negligible effect on the chain's profitability. Raising the disgracefully low wages will obviously impact profits and possibly prices, but it is by no means clear to me this will necessarily force the franchise out of business. Companies have been claiming for over 100 years that wage claims would send them only to suddenly make a miraculous recovery when forced to accept them. Also, a franchise-centred campaign has some potential for spreading outside Jimmy John's to the industry as a whole; that seems a much more promising scenario than trying to organize US fast food workers as a cohort.
posted by dontjumplarry at 11:36 AM on January 11, 2011 [18 favorites]

Good on the Wobblies.
posted by Faint of Butt at 11:36 AM on January 11, 2011 [2 favorites]

@KMZ

"I Want Whisky" right?
posted by Stagger Lee at 11:37 AM on January 11, 2011 [1 favorite]

Good thing Minnesota isn't a Right-to-Work state. This is just one more example of why we need comprehensive labor reform in this country. I wish the workers of Jimmy John's and the IWW the best of luck in this - for anyone interested, you can donate to their legal efforts here.
posted by OverlappingElvis at 11:40 AM on January 11, 2011 [9 favorites]

I love "IWW" because it makes me think of the word "wobblies".

Oh and hey "IWW membership does not require that one work in a represented workplace, nor does it exclude membership in another labor union". Maybe I should join.
posted by DU at 11:42 AM on January 11, 2011 [4 favorites]

Eh that came out mangled -- what I meant was that companies throughout labour movement history have yowled that wage claims would send them under, only to later survive and flourish.
posted by dontjumplarry at 11:43 AM on January 11, 2011

Experience tells us no such thing.

really name me an industry where people willingly pay more for a higher priced product at a similar quality level?

Of course that's palpably untrue

Sorry I wasn't clear - there are some industries where unionizing one by one is possible, as I attempted to outline above. But service industries are not on that list.

And at no point to do I think my argument is about unions asking for too much, or that union labor for fast casual restaurants is a bad idea. That's not what I am saying at all, so don't be so knee jerk in your responses. I wish it were possible to do it, it just is not, because people like low prices, and the industry itself doesn't see a great return to the higher productivity that is one of the big benefits of a union workforce.
posted by JPD at 11:44 AM on January 11, 2011

In'n'Out is well known for paying its employees decently, and it isn't markedly more expensive than the much crappier McDonald's, and it seems to be doing ok.
posted by kenko at 11:47 AM on January 11, 2011 [4 favorites]

really name me an industry where people willingly pay more for a higher priced product at a similar quality level?

You've never heard of people avoiding WalMart and other evil places?
posted by DU at 11:50 AM on January 11, 2011 [2 favorites]

really name me an industry where people willingly pay more for a higher priced product at a similar quality level?

I'm saying that "higher-priced" is an assumption. Unions don't exist in a vacuum; the business has to be a viable concern. The relationship is symbiotic. Unions have taken pay cuts many times to help struggling companies. There's no law that says the owners are entitled to a certain level of profitability, either. They are perfectly capable of accepting a lower profit margin for a stable workforce.

Contrary to the whole "unions are bad and expensive", this should be a two-way street.
posted by Benny Andajetz at 11:52 AM on January 11, 2011 [3 favorites]

You've never heard of people avoiding WalMart and other evil places?

I do this, but I'm a union member (at an undisputed global leader of its industry that has yet to be destroyed by 70 years of union organization).
posted by TrialByMedia at 11:53 AM on January 11, 2011 [3 favorites]

The flip side of it is, unionizing the right kinds of businesses will actually show that unions aren't a net negative to the bottom line because of increased productivity et al, and it'll be easier to unionize other companies.


I understand that the bottom line is important for businesses, but I reject the notion that some workers don't work at a business that is "the right kind" for unionizing. All workers deserve to advocate for appropriate compensation, and if they need a union to do that then they should get to have a union. I'm with Stagger Lee on this one -- if a company can't meet the basic rights of its workers, then it doesn't deserve to have workers. The function of unions is to move that bottom line so that workers don't get flattened by an inhuman quest for maximum profitability.
posted by cubby at 11:53 AM on January 11, 2011 [10 favorites]

really name me an industry where people willingly pay more for a higher priced product at a similar quality level?

You've already named it. It's called food service. It's why people go to Jimmy John's instead of Subway, or go to one coffeeshop over another, even though said coffeeshop has higher prices for the same coffee. People aren't utility optimizers at all when it comes to their eating decisions.
posted by Subcommandante Cheese at 11:53 AM on January 11, 2011 [9 favorites]

In'n'Out is well known for paying its employees decently, and it isn't markedly more expensive than the much crappier McDonald's, and it seems to be doing ok.


Higher quality product, higher price point

You've never heard of people avoiding WalMart and other evil places?
Really Wal-Mart? the company that has single handedly destroyed main street america with low prices is your argument for people being willing to pay more for socially responsible behavior?

I'm saying that "higher-priced" is an assumption. Unions don't exist in a vacuum; the business has to be a viable concern. The relationship is symbiotic. Unions have taken pay cuts many times to help struggling companies. There's no law that says the owners are entitled to a certain level of profitability, either. They are perfectly capable of accepting a lower profit margin for a stable workforce.


of course of course - but QSR's just aren't very good businesses - that's why its counterproductive to unionize them. Better to unionize businesses that are earning enough money that they can afford to share more of the wealth with workers. Then maybe once workers spend more money the QSR's guys can be forced to offer better work conditions and better wages.

The better way to fix the situation at places like Jimmy Johns is through legislation & regulation - because then you force the new rules on everyone. Granted, probably means some marginal businesses go away - but they go away because they were marginal, not because they were actually treating their employees humanely.
posted by JPD at 11:59 AM on January 11, 2011 [1 favorite]

Really Wal-Mart? the company that has single handedly destroyed main street america with low prices is your argument for people being willing to pay more for socially responsible behavior?

Yes? You are treating "people" as a monolithic whole. "People" do not shop anywhere. Some individuals shop at A, some at B. A might get more business than B and part of that might be due to prices.

A lot of "main street america" has disappeared, but a lot of it hasn't (and the parts that have aren't all because of WalMart--think of non-walkable streets, for instance). "People" are shopping at those other locations.
posted by DU at 12:04 PM on January 11, 2011 [1 favorite]

You've already named it. It's called food service. It's why people go to Jimmy John's instead of Subway, or go to one coffeeshop over another, even though said coffeeshop has higher prices for the same coffee. People aren't utility optimizers at all when it comes to their eating decisions.


No people choose to pay more for jimmy johns relative to subway because of quality. That plays into the price equation. I'll pay $12 bucks a pound for stumptown beans, but I might not pay 4$/lb for Folgers if I can pay 3$/Maxwell house.

All workers deserve to advocate for appropriate compensation
absolutely, however you need to accept that collective bargaining can not work in all situations. Sometimes the government needs to intervene and impose regulation on everyone to keep the playing field level - that's one of the governments jobs. Labor just has no economic power to capture rents in some businesses.
posted by JPD at 12:06 PM on January 11, 2011

Labor just has no economic power to capture rents in some businesses.

Oh, that's just fucking despicable. Labor demanding non-shitty compensation is nothing, nothing like rent-seeking, and the comparison is disgusting.
posted by Pope Guilty at 12:11 PM on January 11, 2011 [6 favorites]

Oh, that's just fucking despicable. Labor demanding non-shitty compensation is nothing, nothing like rent-seeking, and the comparison is disgusting


you are correct that is the wrong term. But thanks for reading the context and assuming I meant something different then I obviously did.
posted by JPD at 12:15 PM on January 11, 2011

should have read "Labor has no power in some businesses"
posted by JPD at 12:18 PM on January 11, 2011

right that's the point - you can only organize industries where the fixed costs are high and the decremental returns to labor strife are high, because anything that lacks those characteristics is doomed to fail.

This is completely untrue. Labor's biggest remaining outposts are in places with low fixed costs: government jobs, specifically, education and police & fire departments. Gone are the halcyon days of factory jobs with a strong union. And every business is equally vulnerable to labor strife--unless you think that, in the event of a strike, the owners of these franchises could replace their entire employee rosters fast enough for them (the owners) not to take a serious financial hit?

Even if you do successfully organize businesses like this you are probably dooming them to failure unless you can convince consumers its worth paying more for unionized labor - and experience tells you that isn't the case.

Which experience is that, now? Labor inflicts a cost on management, which they can choose to pass on to the customer at their whim. If their customers turn out to be unwilling to bear the added cost, then perhaps management shouldn't have depended on poor worker conditions to turn a profit.
posted by Mayor West at 12:42 PM on January 11, 2011 [3 favorites]

The better way to fix the situation at places like Jimmy Johns is through legislation & regulation - because then you force the new rules on everyone.
That sort of legislation is only likely to come about because of sustained union militancy in any and every workplace possible. An electable party isn't going to make that sort of commitment unless it looks like there's a constituency to appease.
posted by Abiezer at 12:50 PM on January 11, 2011 [14 favorites]

Labor's biggest remaining outposts are in places with low fixed costs: government jobs, specifically, education and police & fire departments.

there is no competition in those industries. Nor should there be. (yes, yes, private education, but that choice is made for perceived quality, and you still end up paying for the public education system - as it should be). If you could force unionization upon the entire QSR industry then it would work, but piecemeal unionization is doomed.

Which experience is that, now? That people in general when given the choice between two equivalent goods will make their choice based on price


If their customers turn out to be unwilling to bear the added cost, then perhaps management shouldn't have depended on poor worker conditions to turn a profit.

yes absolutely, but in industries where this is the case the end result of a few companies unionizing would be those same businesses being the least likely to survive, whereas if you use regulation and legislation to eliminate poor working conditions across the entire industry then it would be the businesses that people want to buy things at the least, or the worst managed businesses that would close.
posted by JPD at 1:00 PM on January 11, 2011

Good thing Minnesota isn't a Right-to-Work state.

We certainly don't want to give people the freedom to choose whether they should join a union, do we?
posted by gyc at 1:01 PM on January 11, 2011

No people choose to pay more for jimmy johns relative to subway because of quality. That plays into the price equation. I'll pay $12 bucks a pound for stumptown beans, but I might not pay 4$/lb for Folgers if I can pay 3$/Maxwell house.


Well, while I'm trying not to be too active in my own thread, I will mention here, to use Minneapolis as an example, many, if not most, of the coffeeshops I know of are receiving the same beans from the same company (Peace Coffee). They sell them for different prices. And yet, people form strange affinities to one or another coffeeshop, even if they have the ability to get the exact same product somewhere else, somewhere close even, for less. Maybe it's the atmosphere of the establishment, or the way its branded, or just that it's more comfortable, since it's where someone's most often gone. Or maybe they don't realize that the coffeeshop right down the street is selling the same coffee, or is selling it at a lower price. These all tend to come into play. The kind of rational choice that you're describing simply doesn't exist outside of certain economic textbooks. People make the "wrong" economic decision all the time.
posted by Subcommandante Cheese at 1:02 PM on January 11, 2011 [2 favorites]

We certainly don't want to give people the freedom to choose whether they should join a union, do we?

We certainly don't want to give unions any actual collective bargaining power in a business, do we?
posted by OverlappingElvis at 1:04 PM on January 11, 2011 [5 favorites]

We certainly don't want to give unions any actual collective bargaining power in a business, do we?


When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker.
posted by gyc at 1:07 PM on January 11, 2011

No that's not a "wrong" economic decision - that's a decision based on perceived quality or a decision based on assymetric information.
posted by JPD at 1:07 PM on January 11, 2011

We certainly don't want to give people the freedom to choose whether they should join a union, do we?

"Right to work" is one of the most misnamed "rights" out there. I sure do love living in a right-to-be-fired-on-a-whim state.
posted by kenko at 1:15 PM on January 11, 2011 [16 favorites]

And every business is equally vulnerable to labor strife--unless you think that, in the event of a strike, the owners of these franchises could replace their entire employee rosters fast enough for them (the owners) not to take a serious financial hit?


There is a big difference between replacing your highily skilled striking workers on the 737 assembly line, or incurring the tradeoff of replacing your workers at an Albertsons (where labor is a relatively smaller proportion of costs, so the net impact of labor costs is less then the impact of having the store closed for the amount of time it would take to restaff) and the barriers to replacing the employees at a QSR. That is indeed part of why unionizing these businesses is difficult.
posted by JPD at 1:16 PM on January 11, 2011

When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker.

In a union shop, you can be sure (taken with a grain of salt - worker abuses can happen in unionized workplaces as well, but I guarantee you they're harder to hide) that basic workers rights are being enforced, and that workers have more power in case those aren't. States that aren't "right-to-work" (which is as political a turn of phrase as "pro-life") don't require that all workplaces are unionized, but they do allow for organization to happen more effectively. The workplace is, for the most part, one of the more undemocratic institutions out there - organized labor is a solution that can help balance employers' power, and allowing organization to be binding helps make that a reality.
posted by OverlappingElvis at 1:18 PM on January 11, 2011 [8 favorites]

that's a decision based on perceived quality or a decision based on assymetric information.

Right. Which is to say, the way people make their dining decisions. Also their non-dining decisions, but that's not the point. The point is, you argument that any increase in price will drive customers away (enough so to make the franchises which unionize fail) assumes that they have the information to recognize equivalent products elsewhere, and their prices, and that the comfort factor is insignificant enough not to really matter. Restaurants change their prices all the time, and yet somehow, it tends not to result in droves of customers never coming back.
posted by Subcommandante Cheese at 1:18 PM on January 11, 2011 [1 favorite]

When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker.

Then just say what you mean - you don't like unions, period. Collective bargaining is all about "strength in numbers".

Unless they are extraordinary, individual workers can't do shit to change their situations - there's already a collective on the other side. Teddy Roosevelt said he believed in labor getting organized because management already was organized.
posted by Benny Andajetz at 1:21 PM on January 11, 2011 [7 favorites]

Higher quality product, higher price point

You've never eaten at an In'n'Out, have you? Better taste, I'll give you, but my intestines would disagree with your quality assessment.

Wal-Mart? the company that has single handedly destroyed main street america

There are exactly 0 Wal-Mart's in the Seattle city limits.
posted by nomisxid at 1:21 PM on January 11, 2011

Restaurants change their prices all the time, and yet somehow, it tends not to result in droves of customers never coming back.


Actually it pretty clearly does. If you look at the data for QSR's you can see when one chain gets its prices out of whack versus its perceived quality relative to its competitors. Happens all the time.

A QSR is a much more homogenous experience then a coffee shop.
posted by JPD at 1:23 PM on January 11, 2011

My Jimmy Johns demand curve is pretty inelastic. I would totally be willing to pay more for my Jimmy Johns. Mmm, Jimmy Johns.
posted by naoko at 1:24 PM on January 11, 2011 [1 favorite]

When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker.

As soon as we've dismantled all the huge multinational corporations (and national and statewide corporations and, generally, employers that have many, many times the power of any individual employee) then maybe I'll agree with you.

In the meanwhile, the only way to gain any kind of parity in negotiating with large employers is via organizations of similar size and power.
posted by flug at 1:25 PM on January 11, 2011 [5 favorites]

If you look at the data for QSR's you can see when one chain gets its prices out of whack versus its perceived quality relative to its competitors.

Please cite this. I'm not meaning that particularly combatively, I'm interested to know these numbers.
posted by Subcommandante Cheese at 1:25 PM on January 11, 2011

There are exactly 0 Wal-Mart's in the Seattle city limits.

And 54 in the state of Washington.
posted by JPD at 1:29 PM on January 11, 2011

a huge multinational organization like the IWW
In my dreams! What the fuck are you smoking?
posted by Abiezer at 1:33 PM on January 11, 2011 [16 favorites]

Please cite this. I'm not meaning that particularly combatively,

not taken as such. I understand why people feel passionately about this subject, and I think this is a good civil conversation. Give me some time to pull the info together.
posted by JPD at 1:34 PM on January 11, 2011

Is it Minneapolis day on MeFi? (Boneshaker Books, Somali School Board Member, this) Sweet.
posted by ALongDecember at 1:42 PM on January 11, 2011 [1 favorite]

SC - Anecdote, but frankly I never do much work on QSR's (for a lot of the reasons why I think it is also a bad candidate to unionize) so I'd have to keep trolling to find more concrete stuff - but...

Specific to Chili’s, we believe several factors
explain the underperformance, including less aggressive discounting relative to peers (for
better or worse), a change in brand management, and new cost saving initiatives (both
front and back of the house) which led management to limit added complexity from new
product news. For history, we note that Chili’s traffic has been negative for the past five
years, a total of ~25%. Such has been offset by a cumulative ~17% price increase.
Reasons Understood… Management believes the primary reason for the comp
underperformance over the past two years relates to category discounting. Specifically,
Chili’s refrained from aggressive discounting earlier in the recessionary period (much of
fiscal 2009), leading to comp underperformance. In the first half of fiscal 2010,
management succumbed to such discounting with their 3 for $20 promotion. Such was a
success in driving sales, leading to comps once again ahead of the broader industry. With
that said, not surprisingly, profitability was disappointing. And upon the first sign of
industry comp stabilization, Chili’s removed the promotion, leading to a return in comp
underperformance in the second half of fiscal 2010.

sorry its from some random sell-side note dated 12/12/10 but it sort of gets the point across that pricing issues are pretty common in the industry, and does lead to lower comps.

I can find plenty more - although a lot of QSRs have been swallowed up by private equity (CKE/Hardees is a good example of a QSR getting in trouble because of pricing being out of whack relative to quality, but they got bought by Apollo)

Link to BBerg story from that takeover

Relevant passage:
Sales at CKE restaurants open at least a year fell 6 percent in the quarter ended Jan. 25, as unemployment remained high and competitors lowered hamburger prices, the company said this month.

compare that with McDonald's being flat during the same time period
posted by JPD at 1:57 PM on January 11, 2011

a huge multinational organization like the IWW

OK, now that's funny.
posted by enn at 2:07 PM on January 11, 2011 [5 favorites]

JPD wrote: "Unions can be most effective when you are in low marginal cost relative to average cost industries (mostly assembly type things) - where the increased productivity offsets the higher labor costs, and the decremental returns to labor strife are high."

Unions seemed to work OK for grocery stores, at least until it was decided that consistently showing a profit wasn't enough, and inexorable growth was required. The unionized grocery store I shopped at before it was sold off as part of a corporate restructuring had the best shopping experience anywhere, largely because the employees actually cared about their jobs since they almost all had a decade or more on the job and were generally paid almost $20 an hour, not counting benefits.

Sure, I paid an extra buck or two a week for my groceries over what I would have paid at Wal-Mart, but I received far more than that in value.

JPD wrote: "There is a big difference between replacing your highily skilled striking workers on the 737 assembly line, or incurring the tradeoff of replacing your workers at an Albertsons (where labor is a relatively smaller proportion of costs, so the net impact of labor costs is less then the impact of having the store closed for the amount of time it would take to restaff) and the barriers to replacing the employees at a QSR."

Interesting that you used Albertson's as an example, since they are in fact the grocery store I was speaking of that was unionized and a much more pleasant experience than the other stores in town. I understand they've gone shitty since they were bought by SuperValu, as one would expect given a name like "SuperValu."
posted by wierdo at 2:10 PM on January 11, 2011

Oh I suspect that'll be in different hands soon - Supervalu is not doing very well and has lots of debt. Those stores are still union BTW.

Economics of a supermarket are substantially different then economics of a qsr. Labor much smaller piece of the cost puzzle relative to capital investment in the stores, IT and procurement. Costs of labor strife also much higher given the fixed costs. Ironically those chains are also slowly being killed by Wal-Mart as well - even in places where the CW was that WMT couldn't compete like the Northeast - but WMT beats them on procurement costs much more then it beats them by having cheaper labor.
posted by JPD at 2:15 PM on January 11, 2011

...a huge multinational organization like the IWW

*snort*
posted by Floydd at 2:24 PM on January 11, 2011 [1 favorite]

JPD wrote: "WMT beats them on procurement costs much more then it beats them by having cheaper labor."

And it shows something fierce in the quality of the grocery products Wal-Mart sells. Their canned and packaged goods are identical, but their meats, fruits, and vegetables are demonstrably worse. That hasn't always been the case, but in the past couple of years when I've been forced by circumstance to shop there, it has actually taken effort to not go home with rotting things.
posted by wierdo at 2:24 PM on January 11, 2011

Is it Minneapolis day on MeFi? (Boneshaker Books, Somali School Board Member, this) Sweet.

Yeah, I woke up this morning, saw those two posts, was still incredibly enthused from hearing about this last night, and decided to put something together to just add a bit to the awesome things happening in MPLS love.
posted by Subcommandante Cheese at 2:41 PM on January 11, 2011

"When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker."

Sorry, this is inane libertarian bullshit. The "rights" of the individual worker are better protected under unions, and the individual workers have the right to vote against becoming a union shop, or to work elsewhere. I mean, isn't that the redress they have in non-union states, that they can stop working at a place if they don't like the offer they're getting from the employer?

So, you're not choosing the individual worker. You're choosing the employer. You're actually choosing for individual workers to have fewer negotiated benefits, less power and less rights overall.

Unions have plenty of problems, but "right-to-work" is horseshit, and your reasoning actually leads to supporting unions.
posted by klangklangston at 2:57 PM on January 11, 2011 [10 favorites]

...huge multinational organization like the IWW...

I think the scoffers above have made it clear that the IWW isn't huge (sadly, and there are lots of amazing people working tirelessly on changing that), but it should also be pointed out that it's not a union in the sense that you're probably used to thinking of (i.e. a business union).

The IWW has no paid bureaucracy. The entire thing is run by volunteer members who pay their bills with work in other industries, and all decisions are made by these same people.

The general idea is that labour's past strength was due (at least in part) to active participation by workers, and that its current weakness is due to a tendency for a union to be something different and separate from its members.
posted by cdward at 3:30 PM on January 11, 2011 [10 favorites]

Hell yes. Excellent.
posted by Ironmouth at 3:32 PM on January 11, 2011

but in industries where this is the case the end result of a few companies unionizing would be those same businesses being the least likely to survive,

Labor and employment lawyer here.

So many assumptions built into JPD's arguments. Like everything else, unionization is beneficial and detrimental to a company's bottom line. Often the benefits exceed detriments even for the bottom line.

Especially at a place like Jimmy Johns. Those places are helped by a stable workforce and waste a lot of time with new hires. A higher wage means job retention and less "take this job and shove it" moves, which for Jimmy Johns, means less cost.

So much of labor cost is actually administrative.
posted by Ironmouth at 3:47 PM on January 11, 2011 [4 favorites]

We certainly don't want to give unions any actual collective bargaining power in a business, do we?


When it comes to protecting the rights of the individual worker vs. the rights of a huge multinational organization like the IWW, I'll choose the individual worker.

collective bargaining helps individual workers because they negotiate collectively. An individual asking for a pay raise at Jimmy Johns above what the rate for his position ain't gonna fly.
posted by Ironmouth at 3:50 PM on January 11, 2011 [1 favorite]

what are the assumptions built into my arguments?
posted by JPD at 4:25 PM on January 11, 2011

Sorry, this is inane libertarian bullshit. The "rights" of the individual worker are better protected under unions, and the individual workers have the right to vote against becoming a union shop, or to work elsewhere. I mean, isn't that the redress they have in non-union states, that they can stop working at a place if they don't like the offer they're getting from the employer?


So you do support at will employment, where employees can be terminated at the pleasure of the employer without cause?


So, you're not choosing the individual worker. You're choosing the employer. You're actually choosing for individual workers to have fewer negotiated benefits, less power and less rights overall.


No I think you're choosing the employer over the employee because any such closed shop arrangement would be a deal made by the employer. So the employer was able to freely bargain with the union to come to a closed shop agreement while the employee has no choice but to join the union as a condition of his employment.
posted by gyc at 4:25 PM on January 11, 2011 [1 favorite]

Labor and employment lawyer here.
I really resent the implication that your credentials supersede my own. If you have an issue with what I have said with respect the microeconomics of the situation criticize that.
posted by JPD at 4:28 PM on January 11, 2011

If you're appealing to microeconomics you're basically arguing that the reality of the situation should be ignored in favor of economist fantasies and lies, so fuck that.
posted by Pope Guilty at 4:33 PM on January 11, 2011 [2 favorites]

If you're appealing to microeconomics you're basically arguing that the reality of the situation should be ignored in favor of economist fantasies and lies, so fuck that.

don't just say that, that's just pissing on the wall. If you want people you disagree with to take you seriously tell them what assumptions they have you disagree with. So what do you PG disagree with? "And economists are liars" isn't an answer to that question. What part do you actually disagree with.

Also try not be actively unpleasant with people. Its not constructive nor is it conducive to a conversation.
posted by JPD at 4:44 PM on January 11, 2011 [4 favorites]

So you do support at will employment, where employees can be terminated at the pleasure of the employer without cause?

At-will and right-to-work are far from being mutually exclusive.
posted by OverlappingElvis at 4:45 PM on January 11, 2011

"So you do support at will employment, where employees can be terminated at the pleasure of the employer without cause?"

Whether or not I support it, it's the basic reality in every state in the union, barring a few exceptions for things like public policy goals and implied contracts (which aren't even recognized in all states).

So, beginning from a position of at-will employment being the norm, unions offer a bulwark against capricious employer power.

If I've missed the point of your rhetorical question, feel free to use your words to tell me what you were trying to get across.

"No I think you're choosing the employer over the employee because any such closed shop arrangement would be a deal made by the employer.

…and the employees, as represented by the union, which is ideally made of employees, especially under the IWW model. And given that agreements made with unions involved tend to have better outcomes for workers, it takes an extreme perversion of logic to argue that this is somehow counter to the interest of the worker and rather in the interest of the employer.

"So the employer was able to freely bargain with the union to come to a closed shop agreement while the employee has no choice but to join the union as a condition of his employment."

First off, that's assuming that the employee wasn't party to the negotiations. Like, through a union representative. Which means that we're only talking about legacy shops. At which point, yes, a worker can decide to work with the union, avoiding the free rider problem, or can find another job, if the worker would like to make less money and have fewer protections out of some idiotic dedication to Locke-ian liberalism.

So, in summation, this in no way sides with the employer over the worker and the only way to reach that conclusion is to eat so much anti-union bullshit that the whites of your eyes go brown. "Right-to-work" is anti-labor, anti-worker sophistry, and anyone with a high school education should feel ashamed for falling for it.
posted by klangklangston at 4:57 PM on January 11, 2011 [5 favorites]

Ironmouth wrote: "collective bargaining helps individual workers because they negotiate collectively. An individual asking for a pay raise at Jimmy Johns above what the rate for his position ain't gonna fly."

Having known quite a few managers of QSRs over the years, it's not even that their boss doesn't want to give the high-performing employees a raise. It's that they literally cannot do it. It is simply not possible. In the large franchisees, there is a pay range and that is it. It doesn't matter if you have an employee who could (and does) run the entire store herself, that employee is not getting paid more than the $7.35 an hour the org chart states.

gyc wrote: "has no choice but to join the union as a condition of his employment"

Or, you know, work somewhere else. Unless I've missed the sudden unionization of all the fast food restaurants?
posted by wierdo at 5:19 PM on January 11, 2011

I'm totally joining the IWW soon.
posted by saulgoodman at 8:54 PM on January 11, 2011 [4 favorites]

Unfortunately I don't think that is possible, and I'm yet to see any evidence that it is.

Costco.
posted by notyou at 7:13 AM on January 12, 2011

State Of The Union

What will replace unions? - "the people who control capital are willing and even eager to take money they would otherwise use employing middle-class Americans, and spend it on cheaper and equally productive workers abroad"

also btw, here's a look at walmart vs. costco's labour practises

oh, and fwiw, the german model and works councils
posted by kliuless at 2:56 PM on January 12, 2011

If you want people you disagree with to take you seriously tell them what assumptions they have you disagree with.

As long as it remains uncontroversial among economists that raising the minimum wage causes higher unemployment despite the total lack of empirical evidence, and despite the empirical evidence otherwise, economists are no better than the "THOSE FOSSILS WERE PUT THERE BY THE DEVIL" numbskulls and shouldn't be treated any better.
posted by Pope Guilty at 6:37 PM on January 12, 2011

Actually it looks like economists are evenly split on whether it has an effect.
posted by electroboy at 11:18 AM on January 13, 2011