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Super-Sized Deception From Fast-Food Giants

October 24, 2004|Eric Schlosser | Eric Schlosser is the author of "Fast Food Nation" (HarperCollins, 2002).

The television ad funded by the opponents of Proposition 72 -- an initiative that would require large and medium-sized business owners to give health benefits to their workers -- offers a grim scenario. "Our family-run restaurant is doing OK," says a lovely Latina, walking past tables crowded with customers. "Well enough to provide benefits for our workers." But Proposition 72 would threaten all of that, she adds. It would cost her restaurant more than $100,000. It would force her to raise prices or fire workers. It would mean getting rid of the restaurant's "good private health plan" in favor of a "government-run plan." The ad ends by warning viewers that Proposition 72 would kill jobs and eliminate health benefits.

If George Orwell were alive today, he would marvel at the ad's scare tactics, distortions and its fundamental misrepresentation of Proposition 72. For one thing, the woman in the ad isn't a restaurant owner; she's an actress. The Los Angeles restaurant where the ad was filmed actually has only 12 employees, making it too small to be affected. The initiative would require employee access to private plans, not government insurance.

Moreover, the leading corporate sponsor of the effort to block its passage is McDonald's. Other sponsors include Burger King, Wendy's, Jack in the Box, Walgreen, Best Buy, Target, Sears and Yum! Brands (owner of Taco Bell, Pizza Hut and KFC). Concern for the plight of family businesses is now being used as a political tool by the very companies that have driven mom-and-pops out of business.

The fact that Proposition 72 even appears on the ballot is further evidence of how California's initiative laws, initially passed to thwart corporate influence in politics, now facilitate just the opposite. In 2003, the Legislature passed a bill requiring that large and medium-sized companies offer health insurance to their workers. The story should have ended once then-Gov. Gray Davis signed the bill into law. Instead, the California Chamber of Commerce, the California Restaurant Assn. and their corporate allies have spent millions of dollars to rescind the law through the initiative process.

A "yes" vote for Proposition 72 would keep the law, calling for companies with 50 to 199 full-time workers to provide them with health insurance by 2007. Companies with 200 or more full-time workers would have to insure them and their dependents by 2006.

The fast-food industry is the nation's largest employer of minimum-wage labor. The only American workers who consistently earn less are migrant farm workers. Led by McDonald's, the industry has pioneered a workforce that earns low wages, gets little training, receives few benefits and has one of the highest turnover rates of any trade. Retail giants such as Target and Wal-Mart have emulated these labor policies, and there's good reason such service-sector positions are called "McJobs."

Jot Condie, president of the California Restaurant Assn., says passage of Proposition 72 would immediately cause one-fifth of the state's restaurants to shut down. In fact, the proposition would apply to fewer than one-tenth of the state's restaurants and retail stores. Among employers with more than 200 full-time workers, 99% already provide health insurance; among those with 50 to 150 workers, 94% do. Opponents of Proposition 72 say it would add annual health insurance costs of $2,500 to $7,000 per worker, but supporters argue that such costs are wildly inflated because most fast-food workers are young, healthy and single. Starbucks already offers health benefits to full-time staff, as does Costco.

Eight years ago, the California Restaurant Assn. claimed that proposed increases in the state and federal minimum wage would force the industry to fire more than 100,000 workers. Nevertheless, minimum wages were raised -- and the annual revenues of the California restaurant industry have nearly doubled in the last decade. The industry is the largest private employer in the state. It provides health insurance to executives and should now do the same for all full-time employees. Its healthcare costs are now largely covered by taxpayers. California spends about $4.6 billion a year on medical care for the uninsured, while hospitals absorb an additional $5 billion.

Proposition 72 isn't a panacea. But it would provide insurance for more than 1 million people. The disinformation being spread by multinational fast-food chains shouldn't dissuade voters from doing what's right. Thirty years ago, Hawaii adopted a similar plan. Today, it has one of the best healthcare systems in the U.S. -- and on Maui, there's no shortage of Big Macs.

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