"I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."Smith's comment is certainly as valid today as it was when he wrote it back in 1776. Indeed, the popular media publish articles and quotes every day from those with the affectation of trading for the public good.
September 4, 2014, was just another day in that regard.
Take this article by Adam Chandler, at thewire.com, profiling Ron Piazza. Ron owns nine McDonald's franchises in Southern California, including the world's oldest operating McDonald's on the corner of Lakewood Blvd. and Florence Ave. in Downey, California. Here's a Google street view image of that McDonald's from January 2012 --
 |
| This McDonald's in Downey, California, was established in 1953. |
Adam Chandler's article is fascinating in that it gives details about how long and hard Piazza had to work in order to reach the point where he could successfully operate nine McDonald's franchises (Piazza started at a McDonald's fryer making $1 an hour when he was 15 years old), but Chandler leaves the impression that unionization will help workers avoid exploitation by fast food franchises, even after he points out that the McDonald's in Downey that Piazza owns does not make money.
So how much do the workers in that location deserve to be paid, given that customers already refuse to spend enough there to make that business profitable? Adam Chandler doesn't attempt to answer that question --
http://www.thewire.com/national/2014/09/owner-oldest-operating-mcdonalds-on-minimum-wage/379624/
SEP 4, 2014 1:23PM ET
Sixty-one years ago last month, the third-ever McDonald's opened in Downey, Calif., a suburb of Los Angeles and home to Apollo, the third-ever NASA manned spaceflight program. McDonald's went to 119 countries from Baku, Azerbaijan, to Guantanamo Bay, Cuba; Apollo went to the moon.
A man who witnessed much of this history is Ron Piazza, who owns the landmark McDonald's in Downey —the world's oldest-operating McDonald's— along with nine other golden-arched franchises in the area.
Piazza is something of a throwback. Plainspoken and serious, he is the type of business owner whose name and phone number are printed at the bottom of all the customer receipts.
He started on the McDonald's fryers in 1967 when he was fifteen-years-old and worked his way up through the crew to management to ownership. Piazza remembers the introduction of breakfast, the Big Mac, the Beanie Baby Happy Meal craze, the veggie burger flop, and everything in between. He is also a steadfast advocate of not only (the perhaps bygone convention of) the American Dream, but of the American Dream actionably realized through a career at McDonald's.
As fast-food workers and their champions protest in 150 cities today in pursuit of a $15 minimum wage (with some arrests reported already), a wide gulf remains between the company line and the aspirations of the protestors. You'll no doubt be hearing about the demonstrations, which unions have encouraged two million home-care workers to participate in, as well as the calls for civil disobedience by organizers.
What you probably won't be hearing is the case against the minimum wage campaign. Enter Ron Piazza. The Wire caught up with him last month to talk about the business of fast food as well as his take on the ongoing efforts by fast-food workers and activists to push for a large minimum wage increase.
The McDonald's in Downey is somewhere between a vanity project and a millstone. It is the only remaining McDonald's store that was founded by the McDonald brothers themselves before Ray Kroc assumed ownership and set the empire sailing toward its 35,000 stores. It is also the only McDonald's store without both indoor seating and a coveted drive-thru window, which Piazza says accounts for "60-to-70 percent" of business for a typical McDonald's store.
Following an earthquake in 1994, the company planned to knock down the landmark, whose massive neon signed is topped by Speedee, the predecessor to Ronald McDonald. A public outcry ensued. The National Trust for Historical Preservation listed the oldest-surviving McDonald's on its 1994 list of 11 most endangered places along with Cape Cod, the Old Mint in San Francisco, the U.S.S. Constellation, and Frank Lloyd Wright's Taliesin estate in Wisconsin.
Today, the store hosts a McDonald's museum and "comes close to breaking even."
What fueled a public outrage about the possible destruction of a fundamentally inefficient McDonald's outpost (despite the fact that the fast-food enterprise's historical raison d'être was efficiency) is one lens through which the ongoing debate about the minimum wage can be viewed.
The American Dream embodied by long tenures at the same company, a gold watch, a retirement egg, and a living wage all sound like the rhetorical hokum of an erstwhile era. The argument posited by protestors, pundits, politicians, and others is that this model no longer applies as education has become more expensive and income inequality has grown.
As the Times noted, President Obama gave a verbal nod to the campaign unfolding across the country today in a speech he delivered on Labor Day: “All across the country right now there’s a national movement going on made up of fast-food workers organizing to lift wages so they can provide for their families with pride and dignity.”
In his speech on Monday, President Obama also added that he would join a union if he were a fast-food worker.
But Piazza pushes back against the idea that the minimum wage and poverty are inextricably linked.
It was in the wake of that decision that we sat down with Piazza at the Downey McDonald's. He not only pointed to the company's humble roots, but traced a different trajectory for its workers than the characterizations made in the minimum wage debate.
If that story sounds a bit old school, it's because Piazza (and many other business owners like him) still believe that hard work is the pathway to both advancement and wages.
Piazza says his managers make roughly $55,000 per year, which he notes is more than a teacher ("a noble profession"), and that his employees can flourish no matter "what schooling you have."
"People think we're a dead-end job. Well, I'm not a dead-ender. I've got 585 employees and 55 managers, they're not dead-enders."
As for the minimum wage, Piazza sees it as a disincentive for hard work. For an example, he went through the hypothetical hiring of someone who makes an $8 an hour minimum wage and, at the end of two years, makes $10 an hour after learning more of the job and moving up.
Sixty-one years ago last month, the third-ever McDonald's opened in Downey, Calif., a suburb of Los Angeles and home to Apollo, the third-ever NASA manned spaceflight program. McDonald's went to 119 countries from Baku, Azerbaijan, to Guantanamo Bay, Cuba; Apollo went to the moon.
A man who witnessed much of this history is Ron Piazza, who owns the landmark McDonald's in Downey —the world's oldest-operating McDonald's— along with nine other golden-arched franchises in the area.
Piazza is something of a throwback. Plainspoken and serious, he is the type of business owner whose name and phone number are printed at the bottom of all the customer receipts.
He started on the McDonald's fryers in 1967 when he was fifteen-years-old and worked his way up through the crew to management to ownership. Piazza remembers the introduction of breakfast, the Big Mac, the Beanie Baby Happy Meal craze, the veggie burger flop, and everything in between. He is also a steadfast advocate of not only (the perhaps bygone convention of) the American Dream, but of the American Dream actionably realized through a career at McDonald's.
As fast-food workers and their champions protest in 150 cities today in pursuit of a $15 minimum wage (with some arrests reported already), a wide gulf remains between the company line and the aspirations of the protestors. You'll no doubt be hearing about the demonstrations, which unions have encouraged two million home-care workers to participate in, as well as the calls for civil disobedience by organizers.
What you probably won't be hearing is the case against the minimum wage campaign. Enter Ron Piazza. The Wire caught up with him last month to talk about the business of fast food as well as his take on the ongoing efforts by fast-food workers and activists to push for a large minimum wage increase.
History of the Oldest-Operating McDonald's
The McDonald's in Downey is somewhere between a vanity project and a millstone. It is the only remaining McDonald's store that was founded by the McDonald brothers themselves before Ray Kroc assumed ownership and set the empire sailing toward its 35,000 stores. It is also the only McDonald's store without both indoor seating and a coveted drive-thru window, which Piazza says accounts for "60-to-70 percent" of business for a typical McDonald's store.
Following an earthquake in 1994, the company planned to knock down the landmark, whose massive neon signed is topped by Speedee, the predecessor to Ronald McDonald. A public outcry ensued. The National Trust for Historical Preservation listed the oldest-surviving McDonald's on its 1994 list of 11 most endangered places along with Cape Cod, the Old Mint in San Francisco, the U.S.S. Constellation, and Frank Lloyd Wright's Taliesin estate in Wisconsin.
Today, the store hosts a McDonald's museum and "comes close to breaking even."
The Politics of Nostalgia
What fueled a public outrage about the possible destruction of a fundamentally inefficient McDonald's outpost (despite the fact that the fast-food enterprise's historical raison d'être was efficiency) is one lens through which the ongoing debate about the minimum wage can be viewed.
The American Dream embodied by long tenures at the same company, a gold watch, a retirement egg, and a living wage all sound like the rhetorical hokum of an erstwhile era. The argument posited by protestors, pundits, politicians, and others is that this model no longer applies as education has become more expensive and income inequality has grown.
As the Times noted, President Obama gave a verbal nod to the campaign unfolding across the country today in a speech he delivered on Labor Day: “All across the country right now there’s a national movement going on made up of fast-food workers organizing to lift wages so they can provide for their families with pride and dignity.”
In his speech on Monday, President Obama also added that he would join a union if he were a fast-food worker.
But Piazza pushes back against the idea that the minimum wage and poverty are inextricably linked.
"I started at a dollar an hour. Poverty is as severe as it was when I was making a dollar an hour. The minimum wage increase, frankly, hasn't reduced our poverty problem. Do I think it’s fair that people live in poverty? Of course not. But I don’t know how you can say that business is responsible for that."As we noted, McDonald's was dealt a serious blow in late July after the National Labor Relations Board ruled that both the McDonald's Corporation and its franchisees were jointly responsible for the treatment of its workers. This precedent set workers at McDonald's and other fast-food restaurants on a course toward unionization, a long elusive goal and means by which employees could more effectively file unfair practice complaints.
It was in the wake of that decision that we sat down with Piazza at the Downey McDonald's. He not only pointed to the company's humble roots, but traced a different trajectory for its workers than the characterizations made in the minimum wage debate.
"We're an all-American company and we are one of the few countries that was built by its bootstraps. Every one of my managers started as a crew person on french fries, my supervisors, my son, myself. I have four people who worked for me who went on to own their own McDonald's restaurants. I would say that we're a company where more people have come up through the ranks and become successful than maybe any other company in maybe the world."Piazza told me the story of a man he had just promoted from manager to supervisor who had escaped the killing fields of Cambodia with his mother and made it to America.
"They went to New York and first thing off the boat, they went to McDonald's for food. He said 'Mom, I'm going to work there someday.' He came to work and I hired him when he was 15-and-a-half. He worked his way up to crew and then management, became a U.S. citizen, a store manager, and now a supervisor. We have those kinds of examples all the time."
The Minimum Wage
If that story sounds a bit old school, it's because Piazza (and many other business owners like him) still believe that hard work is the pathway to both advancement and wages.
"When you raise the minimum wage you’re asking everybody to weigh in on the poverty situation. What you’re not saying is that the job is worth any more.As he recently told a junior high school: "There is so much opportunity in America for those who want to work hard."
Piazza says his managers make roughly $55,000 per year, which he notes is more than a teacher ("a noble profession"), and that his employees can flourish no matter "what schooling you have."
"People think we're a dead-end job. Well, I'm not a dead-ender. I've got 585 employees and 55 managers, they're not dead-enders."
As for the minimum wage, Piazza sees it as a disincentive for hard work. For an example, he went through the hypothetical hiring of someone who makes an $8 an hour minimum wage and, at the end of two years, makes $10 an hour after learning more of the job and moving up.
"When the minimum wage is $10 an hour, you lose all that because I’m going to bring someone in at $10 an hour. What incentive did you have to learn your job?"He added:
"The way we have tried to bring our employees together is to motivate them, since the fact is, they do need motivation. The way you motivate them is with wage and perks and things that you give them. You take all that away when the government forces people to increase the wages."I asked what the perks were and he offered several examples. Beyond free food and free uniforms, he spoke of flexible schedules for people in school or with other commitments. He also seemed particularly prideful of the professional training that the company provides for the employees for whom McDonald's is their first job and that this training involves teaching employees how to cash their checks.
"I think that’s something that’s really important and I believe that McDonald’s started all that. I believe that we had a large part to play in the American Dream for an awful lot of people. I have a lot of people who still call us for references for people who worked for us 10 or 12 years ago because they honor the fact that somebody came through a McDonald’s, learned the job, taught themselves the skills, and then moved onto something else."With that, he wished me well, hopped into his Maserati, and drove off down a California highway.
The closing mention of a Maserati was a nice touch, if you're one with 'the affectation of trading for the public good', as Adam Smith called it. The comment that Piazza owns a Maserati adds nothing to anyone's understanding of any of the issues raised in the article, but because Maserati is known as an expensive luxury automobile, it helps to provoke a disgruntled emotional reaction from soft headed readers -- regardless of how hard Piazza may have worked, over how many years, to be able to afford such a purchase.
But notice that Maserati has models ranging in price from roughly $70,000 to $180,000 U.S. dollars (in 2014) --
http://www.maserati.us/maserati/us/en/index/shopping-tools/build-price.html
So if Piazza purchased a used Maserati Ghibli, for example, he may have spent less than $50,000 on the purchse --
http://www.maserati.us/maserati/us/en/index/shopping-tools/build-price/Ghibli
That's hardly a purchase that would classify anyone as 'rich'. Piazza may have spent a good deal more, but Chandler doesn't give an amount in his article -- why would he, if his goal is to get an emotional reaction from readers that won't ask any critical questions?
And here's an excellent demonstration of how well such useless language works with some readers. Quoted below is a reader comment to Adam Chandler's story at thewire.com. You see some version of such comments posted over and over again, in response to articles like this that deal with the pay of workers in the fast food industry --
The opportunity for incentive is simple: raise the workers who are already at $10 to $12. This particular restaurant may not be doing all that well, but I would think that if McDonald's really has an interest in touting this store as their oldest, they could kick in a little more money. Or maybe this jerk could downsize his Maserati to, say, something a little more affordable.
To those who said that this is a starter job, not "meant" to support a family-- well, there are adults who DO support a family on a salary from McDonald's, with the assistance of food stamps, medical assistance, etc. Go into one of those miserable fast food stores and tell me what the percentage is of teens as compared to people over 40, and I do NOT mean the managers. Do any of you recall the website they had for their workers, giving a "budget" for a full-time employee? They actually TOLD their employees to go on food stamps and the like. They "budgeted" something like $100 a month for all utilities, including electricity.
If these wealthy people would at least support taxes being raised for decent public education, then yes, I might understand why the deride their own employees as low skilled. With the sort of education some people get in many large cities, is it really any wonder why they haven't gone to college or can't get better job?
This sort of attitude is why I haven't eaten at a fast food place for close to 20 years. WalMart treats its employees in an equally disgusting manner.
Mr. Piazza is selfish, shortsighted, and incredibly lacking in empathy of other human beings.
To those who said that this is a starter job, not "meant" to support a family-- well, there are adults who DO support a family on a salary from McDonald's, with the assistance of food stamps, medical assistance, etc. Go into one of those miserable fast food stores and tell me what the percentage is of teens as compared to people over 40, and I do NOT mean the managers. Do any of you recall the website they had for their workers, giving a "budget" for a full-time employee? They actually TOLD their employees to go on food stamps and the like. They "budgeted" something like $100 a month for all utilities, including electricity.
If these wealthy people would at least support taxes being raised for decent public education, then yes, I might understand why the deride their own employees as low skilled. With the sort of education some people get in many large cities, is it really any wonder why they haven't gone to college or can't get better job?
This sort of attitude is why I haven't eaten at a fast food place for close to 20 years. WalMart treats its employees in an equally disgusting manner.
Mr. Piazza is selfish, shortsighted, and incredibly lacking in empathy of other human beings.
Here are some of the problems with that reader's comment --
- Regarding incentives -- the point Piazza made in the article is that when a pay raise is automatic, rather than tied to making yourself a more valuable employee, there's no incentive for employees to improve. Raising workers already at $10 an hour to $12, when a minimum wage increase takes effect has the same problem -- it has nothing to do with the economic value of the job, and how well an employee performs it, so the reader's supposed 'simple' solution to the problem of automatic wage increases eliminating incentives for improvement, does nothing to solve that problem, since he doesn't address the problem -- automatic increases.
- Regarding McDonald's 'touting this store as their oldest' -- the article stated that the reason this location wasn't eliminated or modernized in 1994 was because of public outcry over it being a historical landmark, not because it provided some kind of marketing value to McDonald's. Now it's listed as an endangered place with the 'National Trust for Historic Preservation', so they can't win -- this 'miserable fast food store', as this reader described it, is considered to be a national landmark.
- Regarding Piazza 'downsizing' his Maserati to something more affordable -- let's make the most extreme assumption, which is that Piazza's Maserati is worth $180,000 U.S. dollars, and that he sold it, and didn't even buy another car at all, but instead decided to use public transportation. Piazza stated that he has 585 employees, so if that $180,000 is divided among his employees, each would receive $307.69. What kind of person is willing to argue such a trivial amount could change anyone's quality of life?
- Regarding adults who attempt to support a family on a 'starter job' -- how can a business owner be held responsible for the lifestyle choices of its employees? Fast food franchise owners certainly don't require employees to have families as a condition of their employment. The reader attempts to make it sound horrendous that a business would recommend that employees seek public assistance, if they were struggling financially -- but should any business set pay based on the lifestyle choices of its employees, so one employee with children, would make dramatically more than another doing the same work, but with no children?
- Regarding raising taxes to support decent public education -- it's fascinating how often this myth is repeated. The truth is that our government monopolized public education system has achieved a rare thing: negative productivity. That is, every year an increased amount of tax dollars are spent on education, with no improvement in quality. See this March, 2014, study by Andrew Coulson of the Cato Institute -- http://object.cato.org/sites/cato.org/files/pubs/pdf/pa746.pdf. And a picture is worth 1,000 words. The only thing that is not increasing in our public education system, is student performance and enrollment -- note that the 'Total Cost' line in this figure is adjusted for inflation --
The reader who made those terribly flawed comments, closes by claiming that Mr. Piazza is 'incredibly lacking in empathy of other human beings.'
But who has more empathy -- an individual who started at the lowest possible position in a corporation, and then after having worked his way up over many years, now successfully provides employment opportunities to over 500 people -- or, individuals that write articles and post comments denigrating the opportunities provided by others?
If you have empathy for low skilled workers with limited opportunities, you know that denigrating those who are providing some opportunity certainly won't help anyone -- least of all a worker who has taken advantage of such an opportunity.
If you really want to show your empathy, go out and start a business yourself, and see how successful you are at providing employment that pays a 'living wage' to low skilled workers.
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