The National Restaurant Association Spends Big to Keep Wages Low

-- Brendan Fischer and Mary Bottari

A majority of the Senate voted to raise the minimum wage to $10.10 per hour recently, yet the bill failed to clear the 60 vote hurdle necessary for passage -- thanks in no small part to the political power of the National Restaurant Association, the restaurant industry's trade association.

For years, the "Other NRA" has flexed its political muscle to keep wages low and to freeze the tipped minimum wage at just $2.13 per hour. Plus, thanks to non-stop NRA lobbying, the House last month passed a bill changing the threshold for employer-provided coverage under the Affordable Care Act to deny healthcare to employees who work 30 hours per week.

This is thanks in no small part to the Other NRA’s super-sized political giving. According to an analysis by the Restaurant Opportunities Center United (ROCUnited), the $683 billion industry's trade association itself has poured $12.6 million directly into federal politicians' campaign coffers since 1989. NRA member organizations have chipped-in around $51 million more: McDonald's, for example, has given $5.8 million to federal politicians, Darden (parent company of Olive Garden, Red Lobster, and Capitol Grille) $5.6 million, and Wendy's $2.3 million. The biggest spender is NRA member Walt Disney; the creator of Mickey Mouse and Donald Duck disclosed $14.1 million in contributions since 1989.

The NRA has also spent millions on the state level. It has worked with the American Legislative Exchange Council (ALEC) to quash local efforts to enact paid sick leave ordinances -- in Oklahoma, for example, the state NRA affiliate worked with Governor Mary Fallin (an ALEC alum) to crush both paid sick leave ordinances and minimum wage ordinances in one fell swoop.

Notably, as the restaurant industry pours tens of millions into politics and fights to keep wages low, it has seen five solid years of record-breaking profits and growth: the industry is expected to increase its profits by $24 billion in 2014, and hit $683 billion in sales.

Super-Sized Political Giving

For decades, the NRA's political spending has bought it mountains of influence.

In the 1990s, it served up enough campaign contributions to persuade Congress to set the minimum wage for tipped workers at just $2.13 an hour. This archaic provision means that big restaurant chains have managed to shift responsibility for paying their workers onto us, the consumers.

That's not the only avenue through which the NRA's political spending leads to a public dunning. Thanks to an abysmally low minimum wage for tipped workers at restaurants like Olive Garden and non-tipped workers at McDonald's and Wendy's, nearly 60 percent of the $600 billion restaurant industry's employees are low-wage workers -- meaning they are twice as likely to be on public assistance as the rest of the population. The National Employment Law Project estimates that the public assistance provided to fast-food workers costs taxpayers at least $3.8 billion a year. Taxpayers fund McDonald’s employees to the tune of $1.2 billion a year in public assistance. The majority of restaurant workers are adult women, many with kids to support.

While moms and kids are struggling, restaurant CEOs are enjoying eye-popping salaries subsidized by the taxpayers. According to a report from the Institute for Policy Studies, big restaurants have exploited a tax loophole to write off more than $200 million in executive “performance pay” over just the past two years. In other words, we as consumers are not only stuck with paying restaurant workers' wages, but we as taxpayers are stuck subsidizing the industry's profits with public assistance programs for their underpaid employees and corporate welfare for their overpaid CEOs.

A Side of Revolving-Door Lobbying and a Dash of Front Groups

The NRA's political giving is served with a side of influence-peddling. Between 2008 and 2013, the NRA more than doubled its count of registered lobbyists, from 15 to 37. At least 27 of the NRA's lobbyists have come through the "revolving door," meaning they jumped from Congressional jobs to lobbying gigs, and then play off their contacts inside the government to advance the restaurant industry's interests. What's more, the NRA's top member companies -- Darden, YUM! Brands (parent of Taco Bell, KFC, and Pizza Hut), Walt Disney, McDonald’s, Marriott, Sodexo, Aramark, Starbucks, and Coca-Cola -- added another 127 registered lobbyists last year. That’s a lot of lobbying power.

In addition to its own paid lobbyists, the industry employs a crew of surrogates to do its dirty work in the public sphere. Salon just reported that the NRA is meticulously tracking the activities of fast food worker advocates and worker advocacy organizations. Salon reports that the Other NRA approved an “additional” $600K to attack ROCUnited. The Other NRA also appears to back groups like (a front group linked to notorious astroturf flak Richard Berman), as well as prominent economists like Douglas Holtz-Eakin who push anti-minimum wage rhetoric.

Another example of restaurant industry astroturf is the Employment Policies Institute, which poses as a "think tank" and commissions reports and runs ads and op-eds opposing minimum wage hikes. But EPI is run out of the offices of Berman & Co., Berman’s PR firm, which represents the restaurant industry  -- although over 80 percent of journalists fail to disclose those ties. Other Berman projects also advance the restaurant industry's agenda: front groups like the "Center for Consumer Freedom" have fought for years against indoor smoking bans and nutrition labeling requirements, which the industry has long opposed.

NRA "Made a Huge Difference" In Blocking State Minimum Wage Increases

And that's just on the federal level. The NRA and its state chapters have given millions more to state and local candidates, and spent countless millions more on state-level lobbying. And in recent years, the NRA has been at the forefront of the push back against state and municipal efforts to enact their own minimum wage increases and paid sick day requirements.

Last June, the NRA boasted that its state chapters "made a huge difference" and "played an active role" in blocking higher wage laws in over a dozen states. And, it has been the biggest opponent of paid sick day laws in states across the country -- it has even pushed a bill at ALEC to prohibit local governments from requiring employers provide paid sick days to their workers, which has since spread across the country.

Most recently, the Oklahoma NRA affiliate helped push SB 1023 to crush local efforts to guarantee a fair wage and paid sick days in that state; it was signed into law in April by Governor Mary Fallin, an ALEC alumni who gave the keynote at ALEC’s spring meeting last year.

Despite broad popular support for an increase in the minimum wage among both Democrats and Republicans, the Other NRA has managed to stick a fork in the measure in the U.S. Senate for now. Stay tuned, however. Advocates are planning more street heat this summer and during the fall election cycle to convince Congress that America needs a raise.


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Mary Bottari

Mary Bottari is a reporter for the Center for Media and Democracy (CMD). She helped launch CMD's award-winning ALEC Exposed investigation and is a two-time recipient of the Sidney Prize for public interest journalism from the Sidney Hillman Foundation.