J.C. Penney Company, Inc. (
) is poor example of a low-wage employer that has rebounded from the recession stronger than ever. So far, Penney’s attempts at a turnaround have failed, and it is struggling just to stay afloat. The retailer has posted a big third-quarter loss, its shares tanked and Standard & Poor’s lowered its credit rating deeper into junk status. If J.C. Penney cannot get some traction during the holiday season, employees no doubt will face more layoffs. It would not surprise many analysts if the retailer went the way of Woolworth’s and Montgomery Ward.
A lawsuit filed in September charged Darden Restaurants, Inc. (
) with violating federal labor laws by underpaying thousands of servers across the country at its Olive Garden, LongHorn Steakhouse and Red Lobster chains. The action represented employees who who worked for the company going back to Aug. 2009 and sought millions of dollars in back wages and other compensation. “We’re seeking not only to correct the wrongs that have occurred at Darden, but hopefully this will stimulate change across the country,” said a lead attorney in the case. While the compensation of CEO Clarence Otis Jr. did drop from $8.48 million in 2011 to $8.08 million in 2012, that cannot be much comfort to those at the bottom of the pay scale at Darden.
DineEquity Inc. (
NYSE: DIN), the parent company of Applebee’s and IHOP, has more employees and more stores than Darden, a similar company compared to others on the list. Yet the top level compensation at DineEquity is $5.39 million compared to $8.04 million at Darden. DineEquity’s $1.08 billion revenue was less than Darden’s as well. In recent news, Zane Tankel, who owns 40 Applebee’s franchises in the New York metropolitan area, has raised the ire of Applebee’s employees and customers when he said he would freeze hiring and would consider cutting current employee hours due to passage the Affordable Care Act. DineEquity has distanced itself from the comments.
7. Starbucks
> U.S. workforce: 176,533
> CEO compensation: $16,079,480
> Revenue: $13.30 billion
> Net income: $1.38 billion
> No. of U.S. stores: 12,903
Unlike other companies on the list, some of Starbucks Corp.’s (
NASDAQ: SBUX) workers are represented by a union. The Starbucks Workers Union has argued that the company has cut benefits and stagnated salaries while reporting record profits. Of course, on its website the company claims that it is dedicated to “earning the trust and respect of our customer, partners and neighbours” by “being responsible and doing things that are good for the planet and each other.”
6. Burger King
> U.S. workforce: 191,815
> CEO compensation: $4,015,619
> Revenue: $2.33 billion
> Net income: $107.0 million
> No. of U.S. stores: 7,453
In August, representatives of Burger King Holdings Inc. (
NYSE: BKW), Subway and McDonald’s went to Washington to complain to lawmakers about the Affordable Care Act. Steen Wiborg, president of Burger King in North America, told
The Wall Street Journal that “Many of our franchisees will struggle with how to reconcile the financial implications … and will likely take other measures to reduce costs.” Burger King, which had revenue of $2.3 billion last year, currently offers a limited benefit plan, which it describes as “the red carpet treatment” and that is also unpopular with its workers.
5. Sears
> U.S. workforce: 264,000
> CEO compensation: $9,932,924
> Revenue: $41.57 billion
> Net income: -$3.11 billion
> No. of U.S. stores: 3,510
Many companies like to tout how important their employees are, and Sears Holdings Corp. (
NASDAQ: SHLD) is no different. “Our associates are at the heart of our company and we value teamwork, integrity, and positive energy,” says the company’s website. Unfortunately for the employees, the operator of Sears and Kmart has struggled in recent years, as evidenced by its recent massive $3.11 billion net loss, despite having revenue of $41.6 billion. In addition, similar to Walmart and Target, Sears and Kmart stores will be open on Thanksgiving for early Black Friday shopping, meaning the employees will have to work this holiday. Sears said it expects holiday hiring to be about the same as a year ago, while Walmart, Toys”R”Us and other retailers increased their seasonal hire
4. Target
> U.S. workforce: 365,000
> CEO compensation: $19,707,107
> Revenue: $69.87 billion
> Net income: $2.93 billion
> No. of U.S. stores: 1,763
Shortly after competitor Walmart announced that it would open its doors for Black Friday shoppers at 8 p.m. Thursday, Target Corp. (
NYSE: TGT) then said that it would also open its doors Thursday night. Employees were not thrilled by the news. One California-based Target worker drafted a petition calling on Target to “save Thanksgiving” and stick to its Friday opening time. More than 220,000 people have signed the petition. Target insists that it took employees into consideration before making the decision to open early. One executive said, “We had so many team members who wanted to work on Thursday that hundreds of our stores are now keeping lists of volunteers who want to work if shifts open up.”
3. McDonald’s
> U.S. workforce: 859,978
> CEO compensation: $4,073,748
> Revenue: $27.01 billion
> Net income: $5.50 billion
> No. of U.S. stores: 14,098
McDonald’s (
NYSE: MCD) is the king of fast-food, with revenue greater than any other restaurant operator on this list, and far more locations as well. The company’s website offers a long list of awards and recognition for the diversity of its workplace. But even McDonald’s is not immune to economic pressures. The company just reported its first monthly drop in global revenue at locations open more than a year, down 1.8% in October. McDonald’s USA president, Jan Fields was subsequently ousted to be replaced by Jeff Stratton, who is currently global chief restaurant officer.
2. Yum! Brands
> U.S. workforce: 880,330
> CEO compensation: $20,411,852
> Revenue: $12.63 billion
> Net income: $1.33 billion
> No. of U.S. stores: 16,006
Because Yum! Brands Inc. (
NYSE: YUM), the operator of the Taco Bell, Pizza Hut and KFC chains, is one of the biggest employers of low wage workers, it takes benefits seriously. According to watchdog group Center for Media and Democracy, the fast food giant co-chaired the labor and business regulation subcommittee of the American Legislative Exchange Council, a “corporate-funded bill mill” that encourages laws that benefits its corporate members. At a 2011 meeting, attendees considered model bills designed to override paid sick leave legislation in the states. In 2012, following negative press over ALEC initiatives and the departure of McDonald’s, Wendy’s, Yum! Brands became one of several large companies to abandon the council.
1. Walmart
> U.S. workforce: 1,400,000
> CEO compensation: $18,131,738
> Revenue: $446.95 billion
> Net income: $15.70 billion
> No. of U.S. stores: 3,868
The labor practices of Wal-Mart Stores Inc. (
NYSE: WMT) have long received negative attention in the press, but that has not affected investors much. WMT’s share price rose more than 48% in the past five years. In 2008, Walmart agreed to pay $640 million in settlements of dozens of class-action lawsuits that claimed the company deprived workers of pay for time worked. In October a class action lawsuit was filed in a Chicago federal court alleging that the retailer had violated minimum wage and overtime laws. Walmart workers have begun to strike, and some plan to walk off the job on Black Friday, the busiest shopping day of the year. Walmart has filed an unfair-labor-practice complaint against the United Food and Commercial.
Courtesy of 24/7 Wall St
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