McDonald’s could be the Bain Capital of the 2016 presidential race

by  

Tsedeye Gebreselassie

Inequality remains one of America’s top economic worries.

It was the poster child for nearly everything that concerned voters about the economy during the 2012 U.S. presidential race: Bain Capital, the private equity firm co-founded by then presidential candidate Mitt Romney, became synonymous with Wall Street excess and “the 1 percent.”

Flash forward three years. Inequality remains the top economic concern for voters ahead of the 2016 election, and a movement of striking fast-food workers calling for $15 an hour and union rights has made raising wages one of the central issues of the presidential debate. Case in point: in the very first question of Tuesday’s GOP presidential debate, frontrunners Donald Trump and Ben Carson were pressed for their position on raising pay to $15 an hour, and Democratic candidates will almost certainly face similar questions at Saturday’s debate.

And now, it’s McDonald’s – the fast-food giant already under fire from its workers over low pay – that risks becoming the corporate symbol for flat paychecks and stagnant incomes, the very issues driving outrage from voters and candidates alike ahead of the election.

That risk for McDonald’s became much more real this week, as fast-food workers across the country kicked off a new push to mobilize the 42% of workers in the U.S. paid less than $15 an hour to demand that candidates at all levels in 2016 back wage increases to $15 an hour and the right to a union.

Moreover, the announcement of this new political push coincided with the largest strike to hit America’s fast-food industry, with workers walking off the job in a record 270 cities. Following these walkouts, workers in McDonald’s uniforms marched in the streets alongside other low-wage workers in hundreds of cities across the country inviting candidates to “Come Get Our Vote!” by supporting $15 an hour and the right to a union.

The prospect of their cooks and cashiers engaging voters and pressing candidates on the fast-food giant’s low wages should be a chilling prospect for McDonald’s, particularly as it urgently tries to engineer a turnaround and repair its brand reputation.

Prominent elected officials have already shown that they are willing to rake the industry over the coals in response to public outrage over its low wages. New York Gov. Andrew Cuomo justified taking executive action to raise wages for the state’s fast-food workers by blasting fast-food companies for “extreme and obnoxious” pay disparities between CEOs and front-line workers, and called for getting New York State “out of the fast-food business,” pointing to the $700 million in public assistance that the industry’s low wages cost the state’s taxpayers every year.

Polling shows that voters across the country are hungry for other public officials to do the same and hold McDonald’s and other fast-food companies accountable for low pay. A recent poll of workers paid less than $15 hour showed that 69% of unregistered voters would register to vote if there were a candidate who supported $15 an hour and a union. The same poll showed that 65% of registered voters paid less than $15 an hour would be more likely to vote if there were a candidate who supported $15 an hour and a union.

When companies like McDonald’s  MCD -1.91% find themselves in the middle of this kind of political storm, the consequences can be more than merely symbolic. Just look at the scrutiny that McDonald’s currently faces in Europe and Latin America.

In Europe, where public outrage over corporate tax evasion has reached a fever pitch, this spring EU commission investigators began probing the company’s tax practices, in response to allegations that McDonald’s has dodged more than 1 billion euros in taxes. With tax avoidance cases against companies like Starbucks  SBUX -2.18%  and Fiat now settled, members of the European Parliament have sharpened calls in recent months for a formal investigation to be opened against McDonald’s.

And in Brazil, one the company’s most important markets overseas, public outrage over McDonald’s labor law violations spurred elected officials to call an unprecedented global hearing before the Brazilian Federal Senate in August, where workers, elected leaders, and experts from around the world delivered testimony on how the company, the world second-largest private sector employer, is driving a global race to the bottom. The hearing prompted Brazil’s top labor prosecutor to empanel a task force to investigate the company’s record of labor law violations throughout the country.

With fast-food strikes continuing to grow, and with workers across the country now taking their Fight for $15 and union rights to the ballot box ahead of the election, McDonald’s could find its low wages coming under a whole new level of scrutiny in 2016. And while the all-day breakfast may have provided a much needed sales boost, fair pay and good jobs could be the key to the real turnaround that the company sorely needs.

Tsedeye Gebreselassie is a senior staff attorney at the National Employment Law Project and works on researching, developing and promoting policies that raise job standards and expand workplace protections for low-wage and immigrant workers.