The Fast-Food Industry and How it Was Built

The fast-food industry is dominated by a handful of powerful corporations who are determined to aggressively drive production costs to the minimum. Low wages are a central part of this program. Why? Because every dollar employers have to pay in the form of wages is one less dollar in their pockets. The lower the wages, the better the profits.

The companies that have applied this formula most successfully are McDonald’s, Burger King, and Yum (Pizza Hut, Taco Bell, KFC). Together, these huge conglomerates dominate the industry, employing 3.7 million people worldwide and operating a combined total of 60,000 stores.

Though we have become accustomed to thinking of fast-food restaurants as a timeless and essential part of American culture, the industry is actually a very recent development. It began around 50 years ago when a small group of businessmen saw the opportunity to make a lot of money by cutting the costs of production in restaurants. They did this by introducing increased mechanization, which allowed them to hire low-wage, unskilled labor – initially high school students and, eventually, anyone desperate for work.

Since then, these corporations have continually found new ways to further mechanize the workplace and employ cheap labor. They have even persuaded customers to reduce overheads by working for the company for free!

It is common, for example, to have paying customers come to the counter, order their food, take it to their table, and then throw their dirty plates in the garbage. This cuts costs dramatically by eliminating the need for waiters and bussers. The pressures of competition have forced other restaurants to do the same or perish. The result has been the destruction of many of family restaurants that paid their workers higher wages.

In his bestselling book Fast Food Nation, Eric Schlosser describes how McDonald’s pioneered these new methods in the late 1940s: “For the first time, the guiding principles of a factory assembly line were applied to a commercial kitchen. The new division of labor meant that a worker only had to be taught how to perform one task. Skilled and expensive short-order cooks were no longer necessary … instead of relying upon a small, stable, well-paid, and well-trained workforce, the fast food industry seeks out unskilled workers who are willing to accept low pay.”

He explains: “The leading fast food chains spread nationwide; between 1960 and 1973, the number of McDonald’s restaurants grew from roughly 250 to 3,000. What had begun as a series of small, regional businesses became a fast food industry, a major component of the American economy.”

Ray Kroc, who took over the McDonald’s franchises in the 1950s, led the way in developing the fast-food industry. Kroc described his business philosophy in the following way: “This is rat eat rat, dog eat dog. I’ll kill ’em, and I’m going to kill ’em before they kill me. You’re talking about the American way of survival of the fittest.” Kroc once said about his business rivals: “If they were drowning to death, I would put a hose in their mouth.”

Not only did they pay minimum wage to their workers, but they also heavily lobbied the government to reject any calls to increase the minimum wage. In 1972, Kroc lobbied Congress and the White House to pass new legislation, known as the McDonald’s Bill, that would allow employers to pay 16- and 17-year-old kids wages 20% lower than the minimum wage. This would reduce the wages of many of its workers to $1.28 an hour.

The McDonald’s Bill failed, but fast-food industry leaders have attempted to get similar bills passed at a state level. In Washington State in the last year, the fast-food companies have been at the forefront of lobbying the legislature to pass a bill to create a sub-minimum wage.

For these corporations, there is no bottom of the barrel. They will keep cutting pay and benefits to compete with their rivals. This means they will keep attacking wages until workers are forced to toil from sunup to sundown in order to make a living.

Making an employee work harder for cheaper means more money for the owners. It is not a relationship of mutual benefit – of workers helping employers and employers helping workers – it a relationship of a knife to the throat. When owners make gains, it comes at the expense of workers; when workers make gains, it comes at the expense of the owners. This is why, as members of the working class, it is important that we fight together as one.