Living Wages, Rarity for U.S. Fast-Food Workers, Served Up in Denmark

(nytimes) COPENHAGEN 10/27/14 — On a recent afternoon, Hampus Elofsson ended his 40-hour workweek at a Burger King and prepared for a movie and beer with friends. He had paid his rent and all his bills, stashed away some savings, yet still had money for nights out.

That is because he earns the equivalent of $20 an hour — the base wage for fast-food workers throughout Denmark and two and a half times what many fast-food workers earn in the United States.

“You can make a decent living here working in fast food,” said Mr. Elofsson, 24. “You don’t have to struggle to get by.”

With an eye to workers like Mr. Elofsson, some American labor activists and liberal scholars are posing a provocative question: If Danish chains can pay $20 an hour, why can’t those in the United States pay the $15 an hour that many fast-food workers have been clamoring for?

“We see from Denmark that it’s possible to run a profitable fast-food business while paying workers these kinds of wages,” said John Schmitt, an economist at the Center for Economic Policy Research, a liberal think tank in Washington.

Many American economists and business groups say the comparison is deeply flawed because of fundamental differences between Denmark and the United States, including Denmark’s high living costs and taxes, a generous social safety net that includes universal health care and a collective bargaining system in which employer associations and unions work together. The fast-food restaurants here are also less profitable than their American counterparts.

“Trying to compare the business and labor practices in Denmark and the U.S. is like comparing apples to autos,” said Steve Caldeira, president of the International Franchise Association, a group based in Washington that promotes franchising and has many fast-food companies as members.

“Denmark is a small country” with a far higher cost of living, Mr. Caldeira said. “Unions dominate, and the employment system revolves around that fact.”

But as Denmark illustrates, companies have managed to adapt in countries that demand a living wage, and economists like Mr. Schmitt see it as a possible model.

Denmark has no minimum-wage law. But Mr. Elofsson’s $20 an hour is the lowest the fast-food industry can pay under an agreement between Denmark’s 3F union, the nation’s largest, and the Danish employers group Horesta, which includes Burger King, McDonald’s, Starbucks and other restaurant and hotel companies.

By contrast, fast-food wages in the United States are so low that half of the nation’s fast-food workers rely on some form of public assistance, a study from the University of California, Berkeley found. American fast-food workers earn an average of $8.90 an hour.

As a shift manager at a Burger King near Tampa, Fla., Anthony Moore earns $9 an hour, typically working 35 hours a week and taking home around $300 weekly.

“It’s very inadequate,” said Mr. Moore, 26, who supervises 10 workers. His rent is $600 a month, and he often falls behind on his lighting and water bills. A single father, he receives $164 a month in food stamps for his daughters, 5 and 2.

“Sometimes I ask, ‘Do I buy food or do I buy them clothes?’ ” Mr. Moore said. “If I made $20 an hour, I could actually live, instead of dreaming about living.”

Mr. Moore’s daughters receive health care through Medicaid, while he is uninsured because he cannot afford Burger King’s coverage, he said.

“I skip the doctor,” he said, adding that he sometimes goes to work sick because “I can’t miss the money.” Full Story