Fast-food jobs that people actually want

A number of independent chains already exceed the minimum wage and Obamacare demands. Why do they flourish as their big corporate competition frets?

By Jason Notte Aug 2, 2013 3:24PM
Photo montage of Moo Cluck Moo restaurant in Dearborn Heights, Mich. (© Moo Cluck Moo via Facebook)In the Detroit suburbs, The Daily Beast's Daniel Gross finds fast-food joint Moo Cluck Moo paying a starting wage of $12 an hour. In Washington state and Oregon, The Portland Business Journal says the Burgerville chain offers health care to employees working as little as 25 hours a week.


The world hasn't stopped turning and those businesses haven't been ground into dust. As bigger chains including McDonald's (MCD), Wendy's (WEN), Domino's (DPZ), Papa John's (PZZA), White Castle and others cry greasy crocodile tears over the minimum wage and the Affordable Care Act, independent chains are doing just fine by exceeding both the minimum wage and the Affordable Care Act's requirements.


So what's the key difference? Well, burgers at Moo Cluck Moo start at $3 and chicken sandwiches at $5, while a combo meal at Burgerville goes for around $10. Conversely, each chain uses fresher -- and, in some cases, organic -- ingredients than their larger counterparts. However, they also lack that pesky little ticker symbol that follows the chains listed above, which means they can make a profit without having their margins consistently pushed and prodded for more.


"We don’t have a corporate overhead, and our CEO isn’t making $50 million a year," Moo Cluck Moo co-owner and co-founder Harry Moorhouse told The Daily Beast. "We're much more efficient. Where we have four people on a shift, a McDonald's might have seven or eight."


Moorhouse says the living-wage movement that is seeking as much as $15 an hour for fast-food workers never affected his payroll decisions. He says he was guided by the ideal that fast food would be better with natural beef, no hormones, sunflower oil for frying and that it would be prepared better by staff who are paid better. The high starting wage has also been great advertising in a union area like the one surrounding Detroit, where The Detroit News pounced on the eatery's story earlier this year.


Burgerville, meanwhile, actually raised the bar on its health care requirement from 20 hours because some on the plan "didn't have to work very hard to be there." It also doesn't see the reduced turnover -- a third less than the overall fast-food industry -- as a negative, handing employees a "nice watch" when they hit the 15-year mark.


While naysayers shudder to think what a Big Mac would cost if worker wages increased, the fast-food chains mentioned above and others including In-N-Out Burger ($10.50 an hour starting wage) and Seattle-based Dick's Drive-In ($10 an hour to start and full benefits for those working 24 hours a week or more) suggest big-chain customers already pay too much for too little. Meanwhile, Businessweek suggests that $10.50 an hour may be the most reasonable place to start the minimum wage discussion.


The fast-food industry won't collapse if both wages and prices rise. If anything, it may just make customers and shareholder wallets a bit slimmer.


More on moneyNOW

61Comments
Aug 2, 2013 4:37PM
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Just more evidence that the wave of the future is companies staying private.  Who wants all the headaches and restrictions and regulations that come with going public?  Offer whatever compensation packages you want to, give your employees an opportunity to own a real part of the business through a profit sharing program, and tell Wall Street and the SEC to go to hell.
Aug 2, 2013 6:28PM
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In-N-Out is a good establishment: they have a very simple menu, cook to order, use only fresh ingredients, employ friendly, intelligent and energetic people who don't get discombobulated if you tweak your order slightly.  It doesn't surprise me that their starting salary is $10.50; they work hard, keep things moving efficiently, don't look miserable and are well worth it.  There's always a long line which shows you don't have to spend billions in advertising or stupid marketing experiments with the latest fads to reach your customer base.

Aug 2, 2013 4:43PM
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With higher wages come happier more productive employees. These employees can in turn provide better customer satisfaction which keeps customers coming back. Having high quality food prepared by workers who feel like valuable members of a business instead of expendable commodities is no new thing. I do think $15 is too high but $10-12 is not too much to ask for the kind of work these people do.
Aug 2, 2013 6:23PM
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Hooray for the independence. Slam the corporations.
Aug 2, 2013 7:04PM
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Eating at local independent restaurants is the best way to get good food.  The nearby national chain eateries have issues with consistency, due to the turnover in both grunts and management.  Just by staying in business for several years in such a cut throat industry proves that they're doing something right.  
Aug 2, 2013 9:26PM
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In 2005 I did a study comparing wages and rents for 1BDR apartments.  Turned out that the average homeless person needed to find a job that paid $11 per hour, to earn enough to live in an efficiency apartment in Seattle. 

 

Back in 1976, my partner and I paid our employees 50 cents more than minimum wage, and we paid for half of the employee's health insurance.  Both were unheard of at that time.

 

Employees who are fairly compensated, and who have some health and dental insurance benefits, do tend to be happier and more customer friendly.  They also care more about the "CQC" of the Food business.  That is Cleanliness, Quality and Consistency.  That is something the big corps need to learn.

 

 

Aug 2, 2013 9:32PM
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The lie that raising minimum wage to $9  as they're working on would raise the price of a Big Mac $1 each is easily disproved. Many states have state mandated wages near that including Washington state at $9.19 an hour and a Big Mac only costs a few cents more than Virginia that follows federal requirements.

 

It's kind of like the lie that Wal Mart can't pay much over minimum wage or provide benefits and compete while Costco pays an average $18 an hour, has good benefits and is very profitable.

Aug 2, 2013 4:28PM
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Starbucks pays benefits unlike the big fast restaurants that have huge profits and

are cheap with employees

Aug 2, 2013 9:54PM
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Agree that the wave of the future is staying private - take a small, local chain like Five Guys - fairly simple menu - all they serve are burgers and hand-cut fries.  Takes maybe 4 to 5 on a shift to run things  - burgers are fresh, cooked and dressed to order, nice dining area - no tacos, no frozen chicken or frozen fish , no microwave.  Drinks are self-serve. No shakes, no ice cream

Aug 2, 2013 9:38PM
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Fast food employment is not supposed to be a career path onto itself. Use it as a way to make money to go to college while you're still living at home.
Aug 2, 2013 10:19PM
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Eat at home, better food and less chance of getting sick from food poisoning. Learn how to make healthy foods at home and common sense goes a long way, Do we need to be eating out as much as we do/ NO !
Aug 2, 2013 11:28PM
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Did anyone notice that this restaurant has half the staff? It seems like that would be the net effect.

Pay could go up, but number of staff would be reduced to compensate. Could rates go up a little? Sure. But the sad thing is that so many people are under the impression that working in fast food is supposed to provide a living wage. It can if you work up to management. Then pay at most places start at $40k/yr. But if you have been an order taker for several years and haven't made any attempt to work your way up, you almost give up the right to gripe. If this job doesn't work for you, there is still the option of getting a different job.

Aug 2, 2013 9:42PM
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This is a FREE MARKET.  Fast food companies should be able to pay whatever they want and their workers should be able to work wherever they want.  If McDonalds isn't paying you enough, FIND A BETTER PAYING JOB!!! It is as simple as that. When McDonalds can't attract any workers at their current pay rate, they will raise it.
Aug 2, 2013 11:35PM
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The bottom line is simple.  If you cut out the boards of directors and the CEOs, the corporate jets, and the million dollar parties, you don't need to bleed the workers dry in order to give the top dogs the multi-million dollar paychecks.  You can operate your business without exploiting the poor or leaving your employees to ask for foodstamps and medicaid.  You make a very good living and they make a decent living and everyone is happy.  What's more, the taxpayers don't have to subsidize the fat cats' paychecks.
Aug 2, 2013 9:20PM
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'Way to go! This is the most positive news I have heard since January 2009. Adding healthcare to supplement an excellent entrance salary would be the extra incentive to cause an ambitious person to polish up the resume and take steps to secure an interview. (as Ed would say): "Let's Get To Work!"

Aug 2, 2013 9:49PM
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Back in the good old days-?- Parents used cloth diapers which were washed and re used.  Cost a lot less money, but caused work to be done.  There were no agencies to give you paper diapers then. A lot of trees were saved probably kept the greens happy though. If you had the money there were diaper services to do that work for you.
Aug 2, 2013 11:38PM
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Auto companies are starting workers at the $15 / hour wage. To say the person flipping burgers is worth the same wage is crazy. I don't see the larger companies flocking to raise entry level wages to keep their employees above minimum wage. The only benefit I would see to paying fast food workers a higher wage would be the resulting expectation of a stronger work ethic. When I worked for Mc D's in the 70's we would have about  1/2 the staff of a current shift, no one would ever think of standing around, and customers we expected to ha received their order 2 minutes after entering the restaurant. So raise the wage, fire those who don't perform to higher expectations, and remember if you are not working and not collecting unemployment you are not part of the unemployment count
Aug 2, 2013 11:39PM
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Well if Fast Food Workers get $15.00 per hour  Want Police Officer and Armed Security Get
Aug 2, 2013 10:43PM
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I live in both Oregon and Washington, and have never heard of Moo Cluck Moo; defiantly a new franchise. And as far as our kids (grandkids); they no longer can get those jobs because they are taken by the adult legal immigrant workers. It's really nice they are offering those benefits for their employees.
Aug 2, 2013 11:26PM
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wages are low because of a labor surplus caused by illegal immigration and outsourcing. jobs keep going out of the country while workers keep coming in. this is why nobody in d.c. cares to stop illegal immigration, their corporate masters need more workers than available jobs. it is simple supply vs. demand. if there is too much of something, labor in this case, it's value will fall.
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