Get ready for a helping of holiday protests to go along with your Black Friday sales.
A number of groups representing minimum wage workers at retailers and fast food restaurants, are gearing up for strikes or other demonstrations to demand higher wages the day after Thanksgiving.
Similar protests have taken place pretty consistently for the past two years. One of the largest led to arrests of 500 workers for sit-ins around the country in September at fast food chains such as Burger King, KFC, McDonald's, and Wendy's. But with the higher minimum wage becoming a national debate, and five states passing legislation to raise their minimum wages during the midterm elections, the protests have been given new life.
As the Wall Street Journal pointed out in an article from Sunday, some franchise owners are trying to get ahead of the demonstrations by launching information campaigns with would-be protestors about how they are really small business owners, often with small profit margins, rather than mega-corporations such as Walmart and Target.
Such educational campaigns makes sense to people like Keith Miller, who chairs the Coalition of Franchisee Associations, and is an owner of three subway franchises in Northern California. The CFA has 17 member associations, including from Burger King, Subway, Dunkin Donuts, and Supercuts.
"We empathize with those workers and offering them a higher wage," Miller says.
On average, Miller pays his workers $10 an hour, he says, adding that he does business in a state with a higher minimum wage than the national minimum wage. (California's minimum wage is currently $9, and it's slated to go up to $10 in 2016, whereas the federal minimum wage is $7.25 an hour. Many fast food workers want a minimum wage starting at $15 an hour.)
The issue for Miller, and other franchisees, particularly in the fast food industry is that profit margins have been trending downward steadily for years, and are now in the range of between 2 percent and 2.5 percent. The entrepreneurs who run franchises are caught between a rock and a hard place, Miller says.
Corporate owners tend to demand their franchisees offer consumers more "value" meals, to increase sales. So if you own a McDonald's, that means more Dollar menu meals. In Miller's case, that means more sandwiches under $5. Since 2000, the number of sandwiches at that price point has tripled to six from two. At the same time, consumers aren't willing to pay more for food, and they balk at any suggestion that prices will go up.
Meanwhile, costs for everything from rent to utilities to the food products he needs to make his sandwiches have all gone up, Miller says.
"I'd pay my workers $20 an hour if my customers would pay $10 for a sandwich," Miller says.
Miller says he and other franchisees are well aware that workers from a variety of industries might be striking on Black Friday. As far as he's concerned, the best way to handle the protests is to be polite and invite workers in for coffee and to talk things over.
"Respect your workers, we would all like to pay higher wages, but we have to keep business viable at the same time," Miller says.