29 November 2007

The Burger King and his serfs

Those of you familiar with the United Methodist Church’s social justice programs may recall a church-endorsed boycott of Taco Bell a little while ago, based on that restaurant chain’s refusal to pay migrant tomato farm workers in Florida an extra penny per pound of tomatoes they harvested. Taco Bell (and McDonald’s) eventually relented, and are now paying that extra penny per pound in a manner that ensures the penny goes directly to the farm workers themselves.

To give you an idea of the workday of the average migrant tomato farm worker, here’s an excerpt from a recent NY Times column:

For 10 to 12 hours a day, they pick tomatoes by hand, earning a piece-rate of about 45 cents for every 32-pound bucket. During a typical day each migrant picks, carries and unloads two tons of tomatoes.

That’s $56 per day, assuming 125 buckets at 32 pounds per bucket. The article goes on to state that the increase of a penny per pound has translated into the workers’ now receiving about 77 cents per bucket, or $96.25 per day. [Note: I have not independently verified any of these figures; I’m merely doing the math based on the facts stated in the article.] So that’s the current situation – workers pick and haul two tons of tomatoes for a little less than $100 per day, or roughly $8 to $10 per hour. Under the prior system, the wages were roughly $4.67 to $5.60 per hour.

However, there’s a new twist. Burger King has adamantly refused to pay the extra penny per pound, and according to the article, “its refusal has encouraged tomato growers to cancel the deals already struck with Taco Bell and McDonald’s.” In brief, “the Florida Tomato Growers Exchange has threatened a fine of $100,000 for any grower who accepts an extra penny per pound for migrant wages.”

Can you imagine any other situation in America where companies would be punished for offering higher wages to their employees? And remember, this new fine structure would not merely maintain a current wage level already in place; rather, it would reverse the gains made in negotiations with Taco Bell and McDonald’s.

The article estimates that paying the additional penny per pound would cost Burger King only $250,000 a year. Let’s see how that stacks up against some other numbers. Burger King’s three principal shareholders are Bain Capital, the Texas Pacific Group, and Goldman Sachs Capital Partners, each owning about 18% to 20% of BKC’s shares; thus, each holding is worth somewhere in the neighborhood of $600 million. According to Forbes magazine, in 2006 Mr. Lloyd C. Blankfein, the Chairman and CEO of Goldman Sachs, garnered an annual bonus of $27,243,500, bringing his total cash compensation to $43,867,924. Seems as though $250,000 wouldn’t exactly break the bank.

But wait, what about the fact that these migrant workers are, by and large, in this country illegally? If you watched last night’s GOP debate sponsored by CNN and YouTube (I admit I did not), you would have heard much about the supposed plague of illegal immigrants in our nation. In response to one issue, Mike Huckabee’s support of an Arkansas state scholarship program that did not discriminate against children of illegal immigrants, Mitt Romney said, “That’s not your money. That’s the taxpayers’ money!”

Now, stick with me here. Mr. Romney is upset that “taxpayers’ money” is being used to provide government services to illegal immigrant families, who are supposedly non-taxpayers. What about the migrant workers in Florida? Aren’t they also taxpayers? Remember that Florida has no state income tax; it relies on a statewide sales tax for its main revenue source. Mr. Romney, are you telling me that every migrant worker in Florida receives a tax-exempt card enabling him or her to make tax-free purchases in Florida? Or are you saying that if the employers of these workers don’t withhold taxes from their wages, it’s the fault of the workers themselves rather than the corporations that employ them?

Why am I picking on Mitt Romney rather than one of the other GOP candidates who love to rail against illegal immigrants? Because he was one of the founders and, until 1999, the CEO of Bain Capital. Yep, that Bain Capital, the same one that now owns about 19% of Burger King. For the record, Romney’s campaign states that he is "no longer involved in Bain Capital and their investment decisions," yet there’s a delicious irony in the fact that the private equity fund he formerly ran is making money by investing in a company that is profiting from the employment and underpayment of migrant workers (i.e., illegal immigrants) in the tomato fields of Florida. I wonder why that didn’t come up in last night’s debate?

I have a call in to the United Methodist Board of Church and Society to see whether the UMC has an official position on this topic, particularly with respect to any boycotts of Burger King. In the meantime, however, may I suggest you avoid Burger King in favor of other fast food (if you must eat fast food, that is). Also, if you’d like to contact BK directly to express your displeasure, their main phone number is 305.378.3000, and their Consumer Relations number is 305.378.3535, or if you’re inclined to write, you can address your comments to:

John W. Chidsey
Chief Executive Officer
Burger King Corporation
5505 Blue Lagoon Drive
Miami, FL 33126

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