'Living Wage' Mandates No Longer Just for Gov't Contractors

Since the early 1990s, cities and states across the country have debated and implemented policies that set an hourly wage well above the federal minimum wage for certain workers. Almost universally, these "living wage" laws and ordinances apply only to the employees of firms that do business with the government, such as construction companies, cafeteria vendors and roadway mowing crews. Advocates generally define the living wage as the level that guarantees workers can afford a "normal" standard of living, creating some obvious inconsistencies in interpretation across jurisdictions.

That model changed in the mid-2000s as union-friendly cities began trying to apply living wage mandates to non-union, big-box stores seeking entry into their cities. They were unsuccessful, with most proposals getting defeated. Chicago Mayor Richard M. Daley in 2006 vetoed the lone retail-focused living wage bill.

Fast forward to the fall of 2012, and union front groups such as New York Communities for Chance turned their public focus for living wage mandates to the service-sector retail and restaurant industries. The Nov. 29 "Black Friday" walkout by New York fast-food workers -- carefully orchestrated by union-funded worker centers -- was followed this spring by a series of similar walkouts, rallies and marches in nearly a dozen cities nationwide. The current wave of protests has broadened to include dozens of retail and restaurant brands, and it’s likely to continue for months.

By demanding a $15-per-hour wage, as well as paid leave benefits and the ability to more easily unionize service industry workers, labor activists are building a narrative that portrays all chain brands as hugely profitable companies that choose to hoard their profits while keeping their workers in "modern day slavery."

An early version of the recently approved living wage law in Washington, D.C. would have required all chain retailers with $1 billion or more in revenue and at least one corporate store in the city to pay all their workers $12.50 per hour. The bill was later narrowed to focus on large-format stores, and the mayor may yet issue a veto, but clearly the distinction between total revenue and profit is unimportant in activist messaging.

D.C.’s living wage bill represents a new front in the assault on service industry brands, whereby the distinction between the corporate entity and individually owned franchised units is being recognized in pro-labor policy. Labor activists are increasingly making claims in the media that the franchise business model is simply a mechanism for large corporations to drive down wages.

They recognize with frustration that their efforts to demonize employers through litigation are generally limited to individual franchise owners, since numerous labor law cases over the years have confirmed that franchisors are not the employers of unit-level workers of franchised brands. Yet -- with the understanding that brand equity is perhaps the most valuable part of a chain business -- they continue to attack brands regardless of the corporate parent’s ability to impact individual personnel disputes.

Playing off the ongoing protest actions demanding a living wage of $15 per hour -- as well as President Obama’s recent refocusing on domestic economic policies intended to expand the middle class -- we can expect legislation to be introduced in union-friendly cities and states in the coming months. Congress, too, will be a venue for discussions on wages and benefits for service industry workers, but with strong opposition to pro-Big Labor priorities in the Republican-controlled House, the real battles will be fought at the state and local levels.

For the convenience store community, it remains vitally important to maintain strong positive lines of communication with store employees. A clear understanding of goals, expectations and the path to advancement will diminish the temptation by hourly workers to fall for the false claims being made by labor activists about the quality of service industry jobs.

Joe Kefauver is managing partner of Parquet Public Affairs, a national issue management, communications, government relations and reputation assurance firm that specializes in service-sector industries. Parquet's clients include Fortune 500 corporations, trade associations, regional businesses and non-profit organizations. For more information, go to www.ParquetPA.com.

Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.