Sunday, June 30, 2013

McDonald's Paying Workers with Debit Cards

Corporate America is always finding innovated and ingenious ways of improving their bottom lines, and usually at the expense of the bottom 47% of American wage earners, who are only taking home $27,000 or less a year. This time they've come up with another new way of fracking blood from stone.

When a single mother named Natalie Gunshannon went to get her first paycheck from her new job at McDonald’s, she was in for a shock --- McDonald’s gave Natalie her salary on a debit card that came with ridiculous hidden charges, like forcing her to pay $5 every time she withdraws her money at her bank.

What’s more, when Natalie asked for a check, McDonald’s refused, saying she had to take the card --- and the charges --- or not take any money at all. This scheme allows her local franchise operator to save a few dollars from the cost of cutting checks by making deals with big banks that force employees to use fee-ridden cards. In many cases, the high costs push workers below minimum wage, most often making them eligible for government entitlements (after all, "entitlements" are usually just "wage subsidies" that companies like McDonald's and Wal-Mart mostly benefit from.)

As reported by MSN Money, according to a Congressional study, $6,000 is the average amount taxpayers are being charged per each Walmart employee for government programs such as food stamps (SNAP) and Medicaid.

Sadly this story is far from unique. Not only do workers in the service sector face poverty wages, they're frequently exploited in other, often illegal ways. A report last month found that nearly 90 percent of fast food workers in New York City had had their wages stolen by their bosses.

Meanwhile business has been booming for bars and restaurants, fast food joints, retail chains, and other low-wage employers --- profits and executive pay have never been higher --- while average working Americans saw the biggest drop in hourly pay on record. This year, thousands of retail and fast food workers have gone on strike demanding a living wage and fair treatment at work.

The practice of replacing checks with expensive debit cards is gaining ground with employers around the country --- and in some cases, has even been used for food stamps. This practice saves businesses money and allows banks to charge ridiculous sums.

Natalie was forced to pay $15 to replace her card if she ever lost it -- because employers know that they won't have to pay the high fees, their employees will be the ones charged. (This is also happening with Social Security retirement and disability recipients as well.)

This is an abuse of employer privileges, pure and simple, telling workers that they have no choice but to accept unfair charges or go hungry. Employers are forcing this upon their workers because, in a bad economy, they don't think workers have a choice to speak up --- even though the practice is illegal.

By the way, Natalie Gunshannon is suing the McDonald’s franchise owner. Her J.P. Morgan Chase payroll card (she contends) imposes fees on virtually every transaction, including: $1.50 for an ATM withdrawal, $5 for over-the-counter cash withdrawals and $1 to check the balance. There's even a charge to pay a bill online or if the card is lost or stolen.

Behind government jobs, McDonald's and Wal-Mart are America's two largest employers. According to a recent CRS report prepared for members and committees of Congress, 29% of American jobs are currently prone to offshoring. So that means jobs in the retail, fast food, healthcare, hospitality and the restaurant and bar industries will be dominating the job market in the U.S. --- So therefore, wages and benefits must be made better for the sake of the entire U.S. economy, specially since since manufacturing has been offshored to low-wage countries; and many tech jobs have been "insourced" with H-1B visas. But fast food and retail jobs can NOT be offshored, and must be made middle-class jobs with benefits (such as healthcare insurance and paid sick days.)

Tell McDonald's and others to ban the practice of forcing employees into fee-laden debit cards. And if you work in food service or retail, and want to put an end to this kind of abuse, sign a petition at SumOfUs to get rid of these exploitative debit cards before the effects of high unemployment, low wages and employee abuse trickle up to hurt us all --- even more than it already has.

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