In April we saw the largest-ever strike against the fast-food industry. There were walkouts in 236 cities, including strikes and protests in 40 countries.
Now on Wednesday we will see the largest-ever workers’ protests at the McDonald’s shareholder meeting in Oak Brook, Illinois. Workers will be protesting the stock manipulation scheme that McDonald’s’ executives are using to loot the company at the expense of its employees.
Profits That Go To Shareholder Buybacks “Loot The Future”
It used to be illegal for a company to manipulate its stock price. Now it’s common. Instead of using profits to invest in the future, companies are paying ridiculously low wages, downsizing, outsourcing, offshoring, cutting R&D, deferring maintenance and improvements, and borrowing money and using the proceeds to purchase their own stock. Guess who gets rich when their stock goes up. (Hint: not the workers, not you, not 99 percent of us.) (And, of course, capital gains taxes are lower than income taxes.)
The Financial Times looked at this scam recently, in “US share buybacks loot the future“:
Observers of the US political scene complain about a dearth of leadership. The same is also true of the corporate world. Just as politicians are mesmerized by polls, chief executives are enslaved to the share price. Today’s US bull market is sustained by one key ingredient: the share buyback. Profit margins are falling. Investment opportunities are apparently lacking. All that remains is to shrink the number of shares. America’s buyback boom may not be a crisis of capitalism. But it is a warning sign. When companies put their chips on financial engineering they are betting against the future.
This year US buybacks and dividends are on course for the first time to exceed $1tn.
That $1 trillion is money that could be paid to workers or reinvested in the companies, both of which could help the country’s economic future. Instead it goes into a few already-wealthy pockets, increasing inequality at the expense of the country’s future.
A paper in the Harvard Business Review looks at how McDonald’s has spent almost $30 billion manipulating its stock price by purchasing its own shares in the last decade. Some of this money could have been spent raising the pay for its underpaid workers. (Note that this is not unlike the situation where last year’s Wall Street bonus pool was, according to The New York Times, “roughly double the total earnings of all Americans who work full time at the federal minimum wage.”)
McDonald’s’ Workers To Protest Buybacks At Shareholder Meeting
McDonald’s cooks and cashiers will be joined on Wednesday and Thursday by members of the clergy at the company’s shareholder meeting. The workers will call on McDonald’s to invest in the company and its workers instead of wealthy hedge fund executives. This will be the largest-ever shareholder meeting protest.
The workers will also be protesting other practices by McDonald’s’ management. For example, the U.S. government is accusing the fast-food giant of labor law violations, making the argument that the corporate parent and not just “franchisees” are responsible for these illegal actions. McDonald’s workers in three states have filed class action lawsuits alleging wage theft. Cooks and cashiers filed a federal civil rights suit alleging racial discrimination at stores in Virginia. Workers have also filed more than two-dozen complaints with the Occupational Safety and Health Administration alleging McDonald’s workers are being burned on the job. (You may have read about workers being told to use condiments like mustard to ease the pain.)
Joining the workers will be:
● Mary Kay Henry, president of Service Employees International Union
● Rev. William Barber II, convener of the Moral Mondays movement and pastor of Greenleaf Christian Church in Goldsboro, N.C.
● Rev. Marilyn Pagán Banks of North Side Power/A Just Harvest in Chicago, Ill.
● Rev. Rodney E. Williams of the Swope Parkway United Christian Church in Kansas City, Mo.
Day 1 of Protests: Wednesday, May 20 at noon central time at McDonald’s Corporate Headquarters, 2111 McDonald’s Drive, Oak Brook, Ill. 60523.
Day 2 of Protests: Thursday, May 21 at 7 a.m. CT with McDonald’s workers, other fast-food workers, clergy and others at the corner of Jorie Blvd & Forest Gate Drive, Oak Brook, Ill.