Matthew Sedacca – The Counter https://thecounter.org Fact and friction in American food. Tue, 26 Apr 2022 12:30:49 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.1 Happier employees, higher profits: Restaurant owners spend more, and it pays off https://thecounter.org/investments-restaurant-employees-benefits-wages-pandemic-profits/ Tue, 26 Apr 2022 12:30:42 +0000 https://thecounter.org/?p=73128 Like many restaurant operators over the past two years, Greg and Daisy Ryan, co-owners of the French-inspired bistro Bell’s in Los Alamos, California, sweated over how their business would survive a global pandemic. All around them owners were turning to takeout, to retail, or to closing their doors indefinitely.  The Ryans, meanwhile, decided to spend […]

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Cutbacks have defined the pandemic era restaurant—but when owners invest more in their employees, everybody wins.

Like many restaurant operators over the past two years, Greg and Daisy Ryan, co-owners of the French-inspired bistro Bell’s in Los Alamos, California, sweated over how their business would survive a global pandemic. All around them owners were turning to takeout, to retail, or to closing their doors indefinitely. 

The Ryans, meanwhile, decided to spend more money—actually, a lot more money—on their staff. They hiked wages to an average of $27 an hour. They added on a bevy of new perks, including fully paid health care coverage and 80 hours of paid time off. 

Increasing costs is risky business even in good times for restaurants, where profits margins are sometimes thinner than mandolined potatoes, and the industry was on life support even before government-mandated shutdowns were part of the conversation. But the Ryans made their drastic changes back in June 2020, after a two-month in-dining closure to regroup, deciding to spend big when most independent restaurants were scrambling to meet existing costs. 

Daisy Ryan, co-owner of Bell's in California wears blue denim apron. April 2022

Daisy Ryan is the Executive Chef and co-owner of the French-inspired bistro Bell’s in Los Alamos, California.

Bonjwing Lee

It worked. Bell’s revenues and staff have more than doubled since that pivotal summer day, and now the Ryans are talking about how to add a retirement program with four percent matching funds, a longstanding goal that will also bring them in line with state-mandated legislation.

“We said, ‘If we’re going to change, this is our time to change,’” Greg said. “If we are not trying to be a better business, and a better business for our staff and the people that work with us, we are going to be so upset with ourselves.”

Even before Covid upended the restaurant landscape, operators large and small were staring down the growing burdens of dwindling foot traffic and poor staff retention. The pandemic, however, turned those concerns into crises. 

They hiked wages to an average of $27 an hour.

Revenue shrunk, debt mounted, and employees, fed up with the industry standard of shoddy pay, grueling hours and nonexistent benefits—not to mention having to risk their health for poor compensation and rude customers—hung up their serving aprons and chef’s whites for good. With the food service industry still down 819,900 jobs as of this March compared to February 2020, according to the Bureau of Labor Statistics (BLS), and any future federal aid uncertain, restaurant owners like the Ryans were left to find their own alternatives to the old, dysfunctional model. 

Many operators have seen a chance to experiment and lay the foundation for a more sustainable industry, which means starting with the individuals who keep it afloat: A healthy staff—physically, mentally, financially—will be far more likely to contribute to long-term success than a team running forever on fumes.

The Ryans built a formula: They figured out how much they’d have to bring in from each seat, down to the penny, to break even, while they guaranteed all their employees more than a living wage along with benefits. 

The couple performed back-of-the-envelope math while plugging into a Google spreadsheet hard costs like real estate, and more flexible ones like food and labor. They consulted with an industry brain trust of former and current management from Union Square Hospitality Group and the Thomas Keller Restaurant Group, as well as the restaurant operations support group Oyster Sunday, about what the ideal model would be. And they arrived at a surprisingly simple solution that many restaurants have turned to throughout the pandemic: a pre-fixe dinner menu. 

Interior at Bell's with tables, and palms, high ceilings, and natural light. April 2022

The Ryans figured out how much they’d have to bring in from each seat to break even, while they guaranteed all their employees more than a living wage along with benefits. 

Carter Hiyama

At $65 for five courses, plus a 20 percent overall service fee in lieu of tips, the price and format felt like a deal that guests could swallow. And, Greg said, it meant that “I’m at least breaking even or I’m not losing a ton of money every second.” The pre-fixe operation not only has helped the team better manage their food costs, but the consistency means they can regularly plan to source salad greens or uni from local producers they’re confident in, versus buying commodity vegetables to accomodate a constantly rotating menu. The service fee, while carrying a significant drawback in that it is reported as income, meaning Bell’s has to pay taxes on it, was a major boon because it removes customers from having any power over their staff’s wages and ensures a guaranteed—and more transparent—revenue stream to help pay for employee costs. 

As of October 2021, the menu now runs $75 per person—the $10 increase due to inflation and growing food costs, with 65 to 75 covers a night. Greg says that the menu price is effectively their break even point, while add-ons like wine, caviar and bread all help to ensure profitability. The new model looks like a success: As the staff—and the total restaurant’s costs—have tripled, the number of customers per night has jumped from the ballpark of 40 in June of 2020. Revenue more than tripled as well: Before Covid, in 2019, the restaurant was clearing $1 million a year. In 2021, despite an on-going pandemic, that number surged to about $3 million. And employee retention has been above 95 percent. 

Greg regularly points out that privilege and good fortune have played a part as well. Early on, he and Daisy purchased the building housing Bell’s instead of buying a home, essentially locking in their real estate costs; their decision to live with Daisy’s parents in the meantime has also helped reduce their overhead costs. The publicity from Daisy being named a Food & Wine Best Chef and Bell’s earning a 2021 Michelin star has helped ensure a continued demand for their food while also allowing them to expand their revenue. And a $93,000 Paycheck Protection Program loan as well as a $150,000 Economic Injury Disaster Loan, along with private funding, helped provide the cash flow to implement these huge workplace overhauls. 

“A dinner restaurant sit-down table service is one of the highest labor versions of what we could be doing, and we want to, as we grow and expand, think of things that can keep labor tight.”

“If someone’s like ‘What’s the blueprint?’ I’m like, it’s a lot of luck, it’s a lot of hard work and it’s just being in the right place at the wrong time, but also the right time,” Greg said.

Still, it’s possible to innovate on more of a shoestring. Stella Dennig, co-owner of Daytrip, a restaurant and wine bar that opened in Oakland, California last October, listed several experiments the restaurant has incorporated to expand its revenue streams, including beverage clubs curating natural wines, beer and aperitifs and a pop-up nighttime wine bar with a menu of easily preparable snacks. She may start a coffee and pastry service as well, which won’t require a full back-of-house team to prepare the food. 

“A dinner restaurant sit-down table service is one of the highest labor versions of what we could be doing, and we want to, as we grow and expand, think of things that can keep labor tight,” Dennig said. “Every five hundred dollars, every thousand dollars all makes a huge difference, so the more revenue streams that we can pull in, that can do that for us every week, every month, it all adds up.”

Dennig estimated that Daytrip’s employee costs range from 40 to 48 percent of the restaurant’s total costs on a good week, greatly exceeding the conventional industry figure of 30 percent. The non-salaried staff starting base wage of $16 to $18 an hour, slightly higher than the $15.06 minimum wage in Oakland, is bolstered by a 20 percent service fee that is pooled and evenly divided among hourly staff. The restaurant also provides access to quarterly financial workshops and a scaling health care stipend, which totals $300 a month for an employee working 40-hour weeks. Retirement plans are a possibility down the line. 

Daytrip staff behind bar prepping dishes and wearing face masks. April 2022

At Daytrip, non-salaried staff have a starting base wage of $16 to $18 an hour, slightly higher than the $15.06 minimum wage in Oakland. This wage is bolstered by a 20 percent service fee that is pooled and evenly divided among hourly staff.

Jeremy Chiu

“There’s so much more that I would like to do and that I know that we will get to,” Dennig said. “All I’m doing right now is what feels like the bare minimum to me, and it’s revolutionary only because the bar is so low in this industry, and that’s not OK.” 

Investing in staff wages and benefits can result in a virtuous circle effect: People are more likely to stay at their jobs, which then decreases the costs that result from replacing them. Tim Taney, co-owner of the burger restaurant Slidin’ Dirty in Troy, New York, estimated that training new employees cost him at least $500 a month. A year after expanding his staff’s benefits package to include employee-covered health insurance and a membership to the YMCA, among other perks, staff retention has improved drastically, with only one employee leaving during that time.

“It’s a significant savings,” Taney said. “It certainly doesn’t pay for everybody’s health care for the year, it’s not like that alone covers that, but it’s a part of it.”

Jason Berry headshot in grey suit against white wall. April 2022

Connor Studios

Jason Berry is the co-founder of the Washington D.C.-based restaurant group Knead Hospitality + Design.

Jason Berry agrees. Earlier this year, the co-founder of the Washington D.C.-based restaurant group Knead Hospitality + Design, began a six-month experiment at its Mi Vida and Succotash National Harbor restaurants, allowing managers and chefs to work four-day, 12-hour shifts per week and finish up any lingering tasks like staff scheduling or menu planning outside of the restaurant, versus five 11- to 12-hour shifts per week, all on site. 

Berry estimated that the new program at Mi Vida will necessitate adding three new managers, each at an annual salary of about $80,000. Improving employee retention, however, would mean cutting down on training costs and recruiter commissions, which run 15 percent of each new hire’s salary. And keeping people around has other benefits, like preserving a chef’s institutional knowledge—dialing back the amount of seasoning in October, for example, when chiles are spicier. 

Channeling his inner Henry Ford, Berry suggested that investing in employees will ultimately lead to better service and, hopefully, better revenue. 

“They’re less exhausted, they’re more focused on their teammates, they’re training better,” Berry said of a staff with a better work-life balance. “Does that translate into more revenue? I think it does.” 

Indeed, workers at restaurants that recently have invested in their staff—from better wages to paid time off to retirement plans—say that these changes have not only improved their physical and mental health, but also their entire relationship to their job. 

“I’m proud more than anything that I have a job that respects me enough that pays for my health insurance.”

Micah Fendley, a server at Bell’s, has been in the industry for about 20 years, and thanks to the changes there has a health insurance card for the first time. That’s affected not just his physical well-being but his outlook on his job and employers, too. 

“I’m proud more than anything that I have a job that respects me enough that pays for my health insurance,” Fendley said. This past February, while the restaurant staff was on a paid winter break, Fendley traveled to Six Flags with his girlfriend, washed his car, had lunch with coworkers, even played disc golf. Returning to the restaurant post-break, he said, “I was able to have an out-of-body experience at work because I was so well rested.”   

Anne McBride, vice president of programs at the James Beard Foundation, noted that not all improvements for workers require employers taking on immense additional costs. Citing findings from a recent report by the organization, McBride said that a number of people left the industry in recent years because there were not clear career paths laid out for growth at restaurants. By simply instituting structures for employees to progress to higher hourly wages or positions, restaurants can turn jobs into careers and reduce turnover. 

By simply instituting structures for employees to progress to higher hourly wages or positions, restaurants can turn jobs into careers and reduce turnover. 

“It’s something that restaurants should pay much closer attention to because, not that it’s free, but it’s something that you can do without having to change anything to the financial structure of your restaurants,” McBride said.  

Greg Ryan is encouraged by how the restaurant’s transformation has bettered the lives of Bell’s staff, but he’s already thinking about what more he can do.

“We hope to get to dental and vision, we’re finally working on our 401(k) program,” Greg said. “It’s all these things that make people feel and hopefully see that there is a reinvestment going back into them as people and not some cog in the machine.” 

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]]> How war, weather, and Covid-19 are rekindling the food vs. fuel debate https://thecounter.org/ukraine-biden-oil-us-reserves-biofuel-rfs-ethanol-soybean/ Thu, 31 Mar 2022 16:39:05 +0000 https://thecounter.org/?p=72483 Brittany Melenchuk knows that griping about how much she’s paying for soybean cooking oil won’t help ease her costs. But with commodity prices sitting stubbornly at nosebleed-inducing highs, what else can she do?  “The price is staggering and it’s not showing any sign of coming down at all,” said Melenchuk, head chef and kitchen manager […]

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Cooking oil prices have nearly tripled since 2020, heating up the conversation around how we use our finite supply of soy and corn.

Brittany Melenchuk knows that griping about how much she’s paying for soybean cooking oil won’t help ease her costs. But with commodity prices sitting stubbornly at nosebleed-inducing highs, what else can she do? 

“The price is staggering and it’s not showing any sign of coming down at all,” said Melenchuk, head chef and kitchen manager of Steny’s Tavern and Grill in Milwaukee, Wisconsin. “Unfortunately, it’s something we need.” 

A quick look at the numbers and her frustration tracks: The price for her soybean cooking oil has more than doubled since pre-pandemic times, from roughly $17 for a 35-pound jug in early 2020 to $37.58 earlier this month. Melenchuk’s kitchen goes through more than 30 jugs a week to keep its six fryers hissing and bubbling while they brown bar menu staples like onion rings, chicken wings, and cheese curds. 

Restaurants across the board have felt the squeeze of wholesale food costs shooting up 15.1 percent from February 2021 to February 2022, according to the Bureau of Labor Statistics (BLS). And vegetable oils, used for everything from frying rice to emulsifying salad vinaigrettes to baking moist brownies, have been among the leaders, with the fats and oils category swelling 44.2 percent over the past 12 years, outpacing wheat flour (29.1 percent), processed poultry (26.5 percent) and beef (22.8 percent).

A basket of fried fish with a side of coleslaw from Steny's Tavern in Milwaukee. March 2022

Fried fish at Steny’s Tavern in Milwaukee, Wisconsin. Brittany Melenchuk, head chef and kitchen manager, is dealing with the rising costs of soybean cooking oil by purchasing a filter.

Prices for soybean oil—which, according to the Department of Agriculture (USDA), was the most widely consumed edible oil in the United States last year—have roughly tripled in the past two years. While commodity analysts, agricultural economists, and trade organizations all agree that the most recent spikes in edible oil costs are directly tied to Russia invading Ukraine, there may be a more enduring factor behind these record-high prices—specifically, the escalating use of commodities like soybean oil not for food purposes, but rather in the production of greener, renewable fuel.

“We can resolve weather problems, and we can resolve the Ukrainian situation,” said Bill Lapp, president of the commodity price consulting firm Advanced Economic Solutions, “and we still would be faced with a food-versus-fuel debate with regard to vegoil supplies, and trying to burn our food.”

Vegetable oil prices have dogged food processors and restaurants like Steny’s over the past two years, driven higher and higher by a perfect storm of conditions—Russia’s invasion of Ukraine cutting off major global exports of commodities like sunflower oil, the continued fallout from Covid-19 supply chain disruptions and labor shortages, and volatile weather conditions across the globe affecting soybean, canola, and palm oil production, among other factors. Yet underpinning these escalating costs are U.S. federal and state policies that, since the advent of the Renewable Fuel Standard (RFS) in 2005, have mandated and encouraged biofuel production like renewable diesel. The Biden administration has championed the RFS as it seeks to address climate change and develop fossil-fuel alternatives. And lately, that has meant it’s not just bakers and chefs like Melenchuk treating soybean oil like “liquid gold.” 

It’s true: The renewable fuel boom is boosting industrial demand for vegetable oils at the same time that prices for cooking oils are soaring.

These myriad government policies have been a boon to farmers, who appreciate commanding higher prices for the corn and soy they grow for biofuel production. Energy companies are also cashing in on RFS and other renewable fuel policy incentives like California’s low-carbon fuel standard (LCFS), as they start to manufacture—or ramp up production of—renewable diesel, a biofuel made with plant materials and animal byproducts that emits less carbon emissions than petroleum-based diesel. Animal tallow and used cooking oil can be used to produce renewable diesel, but the same soybean oil bottled and displayed on grocery store shelves is also used as source.

It’s true: The renewable fuel boom is boosting industrial demand for vegetable oils at the same time that prices for cooking oils are soaring. But is that boom turning up the heat on Melenchuk’s fryer oil prices? In interviews with The Counter, agricultural economists and analysts suggested that the renewable diesel industry’s ever-expanding appetite for various fats and oils is indeed ratcheting up competition for vegetable oil, particularly soy in the United States. That increased demand threatens food processors’ supplies while also raising their costs. And when suppliers face higher costs, those of us closer to the dinner table typically do, too. 

A 2021 report published by the U.S. Energy Information Administration (EIA) estimated that renewable diesel production capacity would more than quadruple by 2024. But some analysts predict that the expected supply of raw materials like animal tallow and used cooking oil won’t be enough to meet production demands, leaving soybean oil—and, likely in the near future, other vegetable oils—to do the heavy lifting of filling in the gap in available feedstocks, or the raw materials used to produce the biofuel. That’s fine in theory: vegetable oils are substitutable goods, meaning that if prices for soybean oil suddenly shoot up or if there is a shortage, it can easily be swapped with other vegetable oils like canola or sunflower. But shutting down or tightening a pipeline for one type of oil, as has been the case with Russia and Ukraine, which export 75 percent of the world’s sunflower oil, will not only crank up the pressure on whatever supply is still available, but will also shoot up demand for similarly substitutable goods. In other words, increased demand for various substitutable edible oils is simultaneously driving up prices for all of them. 

Food consumption for soybean oil over the past 10 years has risen only 5 percent, compared to a whopping 126 percent growth in industrial use.

That brings us back to soybean oil. “It’s the industrial demand that’s certainly the growing [use],” said Will Osnato, a senior research analyst at the agriculture data firm Gro-Intelligence, adding that food consumption for soybean oil over the past 10 years has risen only 5 percent, compared to a whopping 126 percent growth in industrial use. Commodity analysts say they are worried that domestic soybean oil demand may outpace supply in the near future, which could mean we’ll face an impossible choice between cheaper food costs and greener energy—and not just in years of great global unrest.  

This industrial demand surge in the United States can be traced back at least 17 years, to the creation of the RFS. First established by Congress as part of the Energy Policy Act of 2005 and expanded in 2007 through the Energy Independence and Security Act, the program sought to boost renewable fuel production while reducing both greenhouse gas emissions and the nation’s dependence on foreign oil. Following the expansion, RFS required that a minimum amount of renewable fuel be blended into the overall fuel supply, with the total level rising each year to reach a targeted goal of 36 billion gallons in 2022. (The nation is currently on track to produce far below that historic goal.) 

This industrial demand surge in the United States can be traced back at least 17 years, to the creation of the Renewable Fuel Standard.

Over the past 15 years, much of the fuel requirement has been fulfilled by corn ethanol, which currently makes up roughly 10 percent of the nation’s motor fuel supply. But RFS stipulated that as the mandated level of renewable fuel production increased, so too would the proportion of renewable fuels be composed of “advanced biofuels,” which are defined as any renewable fuel besides corn-based ethanol that provide comparably low fuel emission rates. But because advanced biofuels are expensive to produce compared to petroleum diesel, federal and state governments have enacted additional policies that provide subsidies and incentives to make their manufacturing commercially viable. 

These incentives have attracted droves of energy companies to the production of renewable diesel, looking to reap the benefits. In the past three years alone, Marathon Petroleum Corp., CVR Energy, HollyFrontier, and Phillips 66 have all announced plans to convert oil refineries for renewable diesel production with soybean oil as one of the feedstocks. This past July, EIA reported that if all renewable diesel projects that had been announced or were in development were to come online, domestic production capacity would increase to over 5 billion gallons in 2024, up from just short of 0.6 billion gallons in 2020.

But not all incentives were created equal, and one in particular has been seen by the agriculture and energy industries as chiefly responsible for the green diesel rush. “Why are all these renewable diesel plants being built?” asked Scott Irwin, an agricultural economist at the University of Illinois Urbana-Champaign. “A straightforward explanation is it’s California.”

In 2011, the state first implemented its low-carbon fuel standard, which requires a steady, yearly decrease of the carbon intensity (CI) of transportation fuels sold in the state. Irwin explained, however, that it’s not the LCFS alone that is driving so many large multinational energy companies to set up renewable diesel production sites. “They are betting that basically renewable diesel and sustainable aviation fuel, which is very closely related, will have a major role to play in any climate mitigation policies,” Irwin said. “In essence, they’re betting that the LCFS will spread state by state across the United States.”

You don’t have to look far to find confirmation of Irwin’s assessment. Oregon and Washington have both passed laws enacting their own low-carbon or clean fuel standards, while New York, Colorado, and Minnesota  are exploring enacting their own standards. Biofuel companies and their trade representatives are also pushing for a national low-carbon fuel standard

But the looming concern among agriculture and energy analysts remains: whether current and future feedstock supplies will be able to keep up with refineries’ demand. While the ideal raw materials for this outgrowth of renewable diesel facilities are used cooking oil, tallow, and corn oil byproducts, the available supply for these feedstocks is quite limited compared to expected production capacity. Energy companies are therefore expecting soybean oil—currently the only vegetable oil accepted under the RFS for transportation biofuel production—to fill the renewable diesel production gap in the meantime. According to Irwin, this has led to the spike in domestic demand for soybean oil while contributing significantly to the record-high prices we see today.

“We’re essentially paying taxpayer dollars to a product that is raising the prices of vegetable oil for consumers.”

“Before the renewable diesel boom hit, soybean oil prices were about 30 cents [per pound], and I’d say the renewable diesel boom has doubled them,” Irwin said, adding that other global issues like droughts and the ongoing conflict in Ukraine added an extra 20 cents per pound by mid-March.  

Some food industry groups pin higher prices to proposed updates to the RFS mandates for 2022, which will increase mandated biofuel use this year to a historic high of 20.77 billion gallons. Last year, in an odd moment of unity between the bread and oil industries, the American Bakers Association (ABA) vociferously opposed the Environmental Protection Agency’s (EPA) proposed updates. The ABA warned that its processors were already struggling with tight supplies, which could translate to product shortages and price hikes for consumers

Earlier this month, Reuters reported that the Biden administration has considered waiving biofuel blending quotas for refiners in an effort to free up soy and corn supplies for cooking and fend off consumer inflation. According to BLS, between February 2021 and February 2022, the fats and oils component of the Consumer Price Index for urban consumers, which includes butter and peanut butter in its makeup, increased 11.7 percent, compared to 7.9 percent for all foods. 

Joe Glauber, senior research fellow at the International Food Policy Research Institute, said that government incentives like the dollar-per-gallon federal tax credit enjoyed by biodiesel producers and importers means that consumers end up paying twice.

“We’re essentially paying taxpayer dollars to a product that is raising the prices of vegetable oil for consumers,” Glauber said. “From a policy standpoint, if the concern is about food inflation, I think the administration should think very, very much about suspending the Renewable Fuel Standard.”  

“This happens year after year after year, as long as we continue the kinds of policies that are incentivizing the use of vegetable oils in renewable diesel.”

Others, however, are skeptical about how much of an impact soaring vegetable oil prices are actually having on household expenditures. John Jansen, vice president of strategic partnerships at the United Soybean Board, which represents roughly half-a-million soybean farmers, said that food conglomerates like Kellogg Company and General Mills have already locked in manageable prices for their supply of vegetable oils through the futures market, which promises ownership at a later date. But, he added, many small- and mid-sized bakeries and companies that are relying on the spot market for their edible oils, which has seen drastic acceleration over the past two years, are going to feel the pain of these exorbitant costs.

Irwin noted that factors like transportation fuel and labor costs are more likely to have a noticeable impact on grocery store bills than even a 100-percent price increase in a commodity like soybean oil. But he did caution that vegetable oils are used in small amounts in just about everything—from bread to oat milk to corn chips. By incentivizing a new industrial use for these commodities, he said, it’s likely that there will be a “small and persistent impact on retail prices” in the long-run. 

“It’s not like a one-time shock like we’re going through now with the Ukrainian crisis—at some point, that will end and we will go back,” Irwin said. “This happens year after year after year, as long as we continue the kinds of policies that are incentivizing the use of vegetable oils in renewable diesel.” Jansen of the United Soybean Board, however, said that as new facilities that crush soybeans into oil and meal are being constructed alongside new renewable diesel refineries in the next two to three years, they expect domestic soybean oil production will be better equipped to meet increasing demand. This, according to Jansen, will help balance out the vegetable oils market. But he said that for food processors looking to avoid high prices for soybean oil, “until then, it’s going to be difficult.”

Soybean oil plant in Indiana, Pennsylvania. March 2022

A soybean oil plant in Indiana, Pennsylvania. Industrial use of soybean oil has grown 126 percent over the past 10 years.

Edwin Remsburg/VW Pics via Getty Images

Whether or not increased renewable diesel production affects overall consumer food costs, there is another worry underlying the renewable diesel surge: increased reliance on vegetable oil feedstocks for use in “green” energy initiatives could ultimately have net negative impacts on the environment. A February study published in the Proceedings of the National Academy of Sciences, which covered eight years following the expansion of the RFS in 2007, found that rather than mitigating carbon emissions that stem from transportation, ethanol mandates had in fact increased net carbon emissions

Much of the increase is due to a phenomenon known as land-use change. The RFS mandate drove up the price for corn, which then incentivized U.S. farmers to clear forests and grasslands that act as carbon sinks for agricultural use. Together with increased fertilizer use and water pollution, corn-based ethanol produced to meet the RFS has a carbon intensity that could be at least 24 percent higher than gasoline, the study’s authors estimated. 

“These tradeoffs must be weighed alongside the benefits of biofuels as decision-makers consider the future of renewable energy policies and the potential for fuels like corn ethanol to meet climate mitigation goals,” the study’s authors wrote. 

The RFS mandate drove up the price for corn, which then incentivized U.S. farmers to clear forests and grasslands that act as carbon sinks for agricultural use.

Jeremy Martin, director of fuels policy for the Union of Concerned Scientists, sees parallels between the environmental issues that plagued corn ethanol and what could unfold as demand for vegetable oil continues to grow.  

“It’s shaping up to be a sequel on the soybean side, but intensifying,” Martin said. 

Mac Marshall, vice president of market intelligence from the United Soybean Board and U.S. Soybean Export Council, said in a statement that there are physical constraints on the total land acreage that crops like corn and soybeans can be grown, and that the land most optimal for soybean cultivation is already being farmed. This means that any land that farmers would expand to for further crop production would be marginally productive at best, which combined with rising input costs like fertilizer and fuel is likely to disincentivize expansion. “Ultimately, farmers balance agronomic and economic factors when making planting decisions,” Marshall said. 

Returning then to the question we started with: Is there a connection between chef Melenchuk’s higher fryer oil prices and the renewable diesel boom? Well, yes, however indirect. But there’s a bigger, more existential question prompted by this surge in demand and prices, and it may mean that we do have to make an impossible choice between affordable food and greener fuel—and far sooner than we’d like.

“The issues causing tightness in the vegetable oil markets aren’t all caused by renewable diesel by any means, but this doesn’t seem like the time to demand tens of millions of pounds of more vegetable oil,” Martin said. “Looking at the comparisons with corn ethanol, this looks like a bad idea, bad timing, and ignoring those lessons is gonna do long term harm for the [industry’s] prospects.”

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]]> Arizona Starbucks store votes to unionize, as organizing drive gains momentum across the U.S. https://thecounter.org/starbucks-union-vote-count-arizona-seattle/ Fri, 25 Feb 2022 21:39:42 +0000 https://thecounter.org/?p=71640 Starbucks workers at a single location in Mesa, Arizona, voted to unionize, notching another win for a nationwide organizing drive that has quickly blazed across the coffee giant’s stores since two in the Buffalo, New York, area voted to organize this past December. The vote count, which had been postponed from last week, came just […]

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The Mesa Starbucks store is the third company-owned location to vote in favor of unionization since December.

Pictured above: Workers gather in protest outside of Starbucks’s Seattle headquarters on February 15, 2022.

Starbucks workers at a single location in Mesa, Arizona, voted to unionize, notching another win for a nationwide organizing drive that has quickly blazed across the coffee giant’s stores since two in the Buffalo, New York, area voted to organize this past December. The vote count, which had been postponed from last week, came just two days after the National Labor Relations Board (NLRB) ruled against Starbucks’s argument over the size of the eligible voting pool, writing in its order that a single-site union election was appropriate.  

The NLRB announced the results on Friday afternoon, with employees voting overwhelmingly 25 to 3 in favor of organizing with the Starbucks Workers United (SWU) union, a branch of the Service Employees International Union affiliate Workers United, with three challenged ballots.

“Starbucks tried every trick in the book to get us to vote “no” for the union. We were individually pulled off the floor where our manager cried and told us she would be personally heartbroken if we voted for the union. It made people feel guilty and scared–it was not okay,” Zechariah Schwartz, a barista at the Mesa store, said in a statement. 

Starbucks has consistently argued that a union is unnecessary to improving its employees’ working conditions. On a company-run website called We Are One Starbucks, which encourages workers to vote “no” in union elections, Starbucks touts the various benefits currently available for employees, including health care, college tuition, and a Spotify Premium membership. 

The latest union vote results will almost certainly fuel the Starbucks organizing drive that has spread across the country in recent months.

Reggie Borges, a spokesperson for Starbucks, directed a request for comment on the election results to a December letter by Rossann Williams, president of Starbucks North America, which said that the company does “not want a union between us as partners,” the company’s term for its employees, but that it will “respect the legal process” and “bargain in good faith with the union that represents partners.”

The latest union vote results will almost certainly fuel the Starbucks organizing drive that has spread across the country in recent months, with 109 stores in 26 states having filed petitions for union elections, according to the union. And in the process, it continued to reject Starbucks’s established legal strategy of attempting to block single-store union elections.

As it had in the case of the Buffalo union election last year—and in appeals to other NLRB decisions ordering union elections throughout the country—Starbucks argued that workers at the Mesa store should vote alongside other Mesa-area locations as a regional unit in a single election, versus as an individual store unit. Such an election would likely benefit the company by requiring more workers overall to vote in favor of unionizing. 

In their order on Wednesday, three labor board members again ruled that Starbucks had failed to meet the “heavy burden” to overcome the NLRB’s presumption that employees at a single store are sufficient for union vote. The ruling bodes well for workers at another trio of stores in the Buffalo area, who are awaiting a labor board ruling on a near-identical appeal by the company in order to proceed with their own ballot count, along with others who have filed petitions for their own single-store union elections.  

While the Mesa victory is certainly a high point in the quickly expanding Starbucks organizing drive, workers have a long road ahead. Even if all stores that have filed petitions for union elections follow suit, it would still be only a drop in the sea of corporate Starbucks stores. And even more crucial is whether unionized Starbucks stores will be able to secure contracts with the company. An analysis by Bloomberg Law reported that it takes new unions on average 409 days to ratify their first contract. 

Still, pro-union Starbucks workers are undaunted in their efforts to organize the coffee giant and, eventually, secure a contract for their store and others. 

“Every single store needs to be unionized,” Tyler Ralston, a shift supervisor at the Mesa store, told The Counter last week. “This isn’t a thing that, ‘Oh, this store can’t be because of X reason.’ It’s every single store and we’re fighting for a contract that will work for every store, and every partner as well.” 

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]]> Do you care if your meat came from the United States? USDA wants your feedback. https://thecounter.org/meat-united-states-usda-fsis-cool-survey/ Tue, 22 Feb 2022 19:23:00 +0000 https://thecounter.org/?p=71381 At your local supermarket, one might presume that shrink-wrapped ground beef adorned with a red, white and blue “Produced in the USA” label would have come from cattle born and raised on American soil. But despite the label’s implications, this meat could have just as easily—and legally—come from steers that lived and died as far […]

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A new survey will ask whether consumers know that meat labeled as “Product of U.S.A.” could—legally—come from cattle and hogs that were raised and slaughtered anywhere.

At your local supermarket, one might presume that shrink-wrapped ground beef adorned with a red, white and blue “Produced in the USA” label would have come from cattle born and raised on American soil. But despite the label’s implications, this meat could have just as easily—and legally—come from steers that lived and died as far away as Uruguay or Australia. Under current Department of Agriculture (USDA) policy, beef and pork products can voluntarily bear a “Product of the U.S.A” or “Made in the U.S.A” marker, so long as the goods in question have been at some point processed in America—even if that means simply repackaging the meat stateside. 

For years, American ranchers and their industry representatives have bellowed about domestic meat and pork packaging rules, decrying them as misleading to consumers and greatly harmful to cattle and pork producers’ business. In a possible attempt to clear up the confusion, USDA’s Food Safety and Inspection Service (FSIS), which manages label regulations, announced an upcoming survey to discern consumers’ awareness and understanding of the domestic labeling policy. The agency “intends to initiate rulemaking after conducting a comprehensive review of the current voluntary ‘Product of USA’ labeling claim,” an FSIS spokesperson said. 

Through an online questionnaire, FSIS hopes to get a sense of the value consumers place on products slapped with Product of U.S.A. labels, along with general comprehension of which products are allowed to wear this label (as well as other USDA markers). The news came on the heels of President Biden affirming his commitment to curbing consolidation and boosting competition in meat processing, where four companies control 85 percent of the market. 

“If there’s a label on … a pound of ground beef that says Product of the U.S.A., we want to make sure that consumers understand precisely what that means.”

“If there’s a label on … a pound of ground beef that says Product of the U.S.A., we want to make sure that consumers understand precisely what that means,” Agriculture Secretary Tom Vilsack told the House Agriculture Committee in January. “So we’re in the process of doing a fairly extensive survey to find out if consumers understand what that means and whether they place value on it.”

The FSIS outreach is the latest step in an ongoing fight over the rules governing less than a square inch of meat packaging, one that dates back at least to the partial repeal of Country of Origin Labeling (COOL) law in 2015. The legislation had mandated that processors disclose where their product was born, raised, and slaughtered. In the years since, Product of U.S.A. labels appeared to fill the void in helping consumers distinguish whether their steaks were homegrown, leading ranchers and groups like the Organization for Competitive Markets (OCM) and American Grassfed Association (AGA) to agitate for reform of the contentious regulations. 

In 2018, OCM and AGA filed a petition arguing that the current FSIS rules effectively allow for imported beef to be passed off as domestic, all to the benefit of the biggest multinational meat processors. Beyond deceiving consumers who are looking to buy local meat, the groups argued, large packers cause financial harm to American cattle and hog farmers in their ability to import and sell cheap meat to retailers as American products. These positions were echoed by a bipartisan group of senators last year, who introduced the American Beef Labeling Act, which would restrict such labeling on beef to cattle that was born, raised, and slaughtered in the United States. 

“If you were looking at a hamburger and it said ‘Product of the U.S.,’ I think the consumer would assume the entire production process happened in the United States.”

Carolyn Dimitri, an applied economist at New York University who has researched food labeling, sympathized with critics’ arguments that the label is misleading to consumers. She suggested that people shopping for groceries “don’t think too much” about labels; instead, they largely rely on the government to regulate these markers and ensure the information meant to enlighten consumers is sufficiently reflective of the goods they are buying.

“If you were looking at a hamburger and it said ‘Product of the U.S.,’ I think the consumer would assume the entire production process happened in the United States,” Dimitri said. 

More pressing to cattle and hog farmers is the financial harm the lax policies have wrought on their business. Ranchers who spoke to The Counter were quick to point to the repeal of COOL as a major driver behind the decline of American cattle prices—a good reason to reconsider domestic labeling rules and legislation. When COOL took effect in 2009, the prices producers received for their cattle indeed went up. But Congress partially repealed the legislation for beef and pork products in December 2015, following a drawn-out battle with the World Trade Organization (WTO). The international body found the mandatory labeling requirements were discriminatory against meat imports and authorized Mexico and Canada to level $1 billion in retaliatory tariffs against the United States. 

It wasn’t long after that cattle prices plummeted, said Curt Werner, a third-generation cattle farmer in Merino, Colorado, and president of the Colorado Independent Cattle Growers Association. 

In 2015, cattle farmers’ share of retail beef prices was 51.5 percent, according to USDA, dropping to 44.3 percent the following year. The downward trend has continued even as retail prices have skyrocketed during the pandemic, with farmers earning a 36.8 percent share in 2021, seeming to track with the ranchers’ complaints. “Once [COOL] was repealed in 2016 … it’s been a downward spiral ever since,” Werner said.

“Once [COOL] was repealed in 2016 … it’s been a downward spiral ever since.”

But plenty of other factors beyond the repeal of COOL could have played a significant role in declining cattle prices for ranchers. Glynn Tonsor, an agricultural economist at Kansas State University, said that when COOL was repealed, there was both a tight cattle supply and strong demand for beef. “If either of those conditions changed, then we would anticipate cattle prices to decline, even if MCOOL didn’t change,” he said, using an alternative acronym for the labeling policy. In the years that followed, Tonsor suggested that the tightening of packing capacity due to slaughterhouses and processing facilities closing could have played a notable role in declining cattle prices.

Still, Dimitri, the N.Y.U. economist, pointed out that the lax regulations currently in effect for Product of U.S.A. labeling are unlikely to be helping producers amid an increasingly concentrated meat market. Given that consumers likely can’t tell much of a difference between cheap, imported meat and meat derived from animals raised and slaughtered in the United States, “it’s eroding away at the domestic producers’ market,” she said.  

The FSIS survey could ultimately lead to changes clarifying what kinds of meats are allowed to bear Product of U.S.A. and other similar USDA labels. But many producers are unsure how quickly adjustments will be made that accommodate their concerns—if at all. George Wishon, a fifth-generation cattle producer in Eastern Washington state, called the survey a “time delay.” He suggested that Congress passing the American Beef Labeling Act would have a better shot at properly addressing consumer confusion and the softness of farmers’ cattle prices. 

“The study’s kind of a side deal,” Wishon said. “It can help but I don’t know how much.”

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]]> Starbucks union vote count in Arizona postponed, ballots impounded https://thecounter.org/starbucks-union-vote-count-arizona-postponed-seattle/ Wed, 16 Feb 2022 22:31:07 +0000 https://thecounter.org/?p=71217 Starbucks employees at a Mesa, Arizona, location were awaiting the tally of their votes on whether to unionize Wednesday—instead, the count was delayed and the ballots impounded by the National Labor Relations Board (NLRB), the result of an ongoing request for review from the Starbucks corporation. The votes will be held for an unspecified future […]

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A Starbucks request for review is holding up the company’s latest union vote. Workers, however, say they’re undeterred.

Starbucks employees at a Mesa, Arizona, location were awaiting the tally of their votes on whether to unionize Wednesday—instead, the count was delayed and the ballots impounded by the National Labor Relations Board (NLRB), the result of an ongoing request for review from the Starbucks corporation. The votes will be held for an unspecified future vote, an NLRB spokesman told The Counter via email.

Pictured above: Workers protest outside of Starbucks’s Seattle headquarters on February 15, 2022.

The news was a minor setback for workers at the store, who had started casting their ballots in January on whether to organize with Starbucks Workers United (SWU), a branch of the Service Employees International Union affiliate Workers United. The hold was the result of a procedural delay: In early January, a regional NLRB director in Phoenix, Arizona, ruled that Starbucks workers at the Mesa location could vote to unionize as a store, rather than being required to vote as part of a larger regional unit. Starbucks subsequently requested a review of this ruling. Because the NLRB hadn’t issued a decision on that request for review by Wednesday, the scheduled vote count was postponed.

Challenging a labor board official’s decision isn’t a new move for Starbucks. The company followed a similar process ahead of union elections at three stores in the Buffalo, New York, area late last year, arguing against the decision of a regional official in New York that the stores could vote individually. The labor board ultimately rejected the company’s arguments, leading to a historic victory for the workers: the first company-owned Starbucks store to be represented by a union since the 1980s. (A second store was later certified in January as having voted in favor of unionization; a third store voted against unionization.)

“It’s basically, functionally, the same argument the company has made in every case so far and lost on,” Ian Hayes, a lawyer for the union, said in a press conference following the delay announcement. Though there’s no guarantee the NLRB will rule the same in this case, Hayes added, “I just don’t have any doubt that we’re going to get the same result: The request will be denied.”

Despite the delay in Arizona, the past month has seen a flurry of unionization activity across the country. Starbucks workers at four locations across New York City and Long Island went public with their petitions to unionize just last week, covering an estimated 170 employees. And on Monday, workers at the chain’s flagship roastery in Seattle announced a unionization push, the fifth in the company’s hometown. According to SWU, as of Wednesday morning, 97 stores across 26 separate states have pending petitions for union elections. Last week, the Seattle City Council passed a resolution to support Starbucks workers in their push for unionization; a similar resolution was introduced in Chicago on Wednesday.

“We had people that were throwing up in the back-of-house, and our managers said, ‘Oh, just stay in the back, you’re fine.”

Workers this week also organized a first-of-its-kind protest outside of Starbucks’s Seattle headquarters, calling on the company to end what they described as a pattern of union-busting practices.

“What’s disgusting? Union-busting,” a crowd of around 70 workers and supporters chanted in front of the company’s head office. The rally included speeches from two former workers from a store in Memphis, Tennessee, whom Starbucks had recently fired after they had tried to form a union. The company told local news outlets that the layoffs were due to safety concerns, but workers suspected they were retaliatory. Beto Sanchez, one of the fired workers, described his former work environment as one that was unsafe for both staff and customers. (The Counter reached out to Starbucks for comment, and will update this post if the company responds.)

“We’ve had partners that were positive and exposed to Covid that were not sent home and were instead told to stay and work with us,” Sanchez told the crowd. “We had people that were throwing up in the back-of-house, and our managers said, ‘Oh, just stay in the back, you’re fine.”

Workers who had voted in the Mesa store election said at Wednesday’s press conference that they were not deterred, and that they expected to celebrate a victory once the votes are ultimately counted. 

“Initially, today, we had this set up and we were planning to go celebrate after, but now we are kind of free,” said Michelle Hejduk, a shift supervisor. “So I say we go out and start organizing some more stores in this time, right?”

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]]> Legislators push to support service workers who lost income due to Covid-19 https://thecounter.org/legislators-support-service-workers-sick-pay-covid-19-new-hampshire-california/ Mon, 14 Feb 2022 21:12:06 +0000 https://thecounter.org/?p=71052 Throughout the pandemic, sick restaurant workers have faced an impossible choice: stay at home but lose their paychecks and possibly their employment, or come into work sick and risk their health and that of their colleagues and diners. A New Hampshire state senator, however, recently began a push to dissolve this binary choice. Her constituents […]

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One New Hampshire senator is pushing for a worker relief fund, while California mandates service worker sick pay.

Throughout the pandemic, sick restaurant workers have faced an impossible choice: stay at home but lose their paychecks and possibly their employment, or come into work sick and risk their health and that of their colleagues and diners. A New Hampshire state senator, however, recently began a push to dissolve this binary choice. Her constituents described having lost days, if not weeks, of pay, as the coronavirus has decimated their industry and left them teetering on the brink of financial precarity. 

Writing to the governor’s office of emergency relief and recovery in late January, Democratic state senator Rebecca Perkins Kwowa pressed for the establishment of a relief fund that would provide financial support for restaurant and retail workers who lost shifts due to Covid-19 infection and quarantine. “As these workers are the ones who continued to show up and keep our society functioning during the darkest days of the pandemic, we should have some fund or programs in place to help them during their temporary period of inability to work,” Perkins Kwowa wrote.  

The United States is one of the few industrialized nations without a national paid sick leave policy, an absence that has acutely hit service workers as the pandemic raged over the past two years. The Families First Coronavirus Response Act (FFCRA), which required that private employers with less than 500 employees provide up to two weeks of paid sick and family leave for workers infected with Covid, among other provisions, expired at the end of December 2020. (Through the American Rescue Plan Act, employers could claim tax credits for voluntarily providing paid sick and family leave between April to September 2021.) This left state and municipal bodies as well as employers as the sole arbiters of workers’ ability to take paid time off or recoup funds for pandemic-related losses. 

“We all wish COVID was over. It is not,” Perkins Kwoka wrote in her letter. “None of these businesses or workers want to be in a position of asking for aid; let’s not make it any harder on them by failing to anticipate their needs.”

“They’ve been at our lunch counters, at their store counters and just keeping us functioning for this whole time, and I think we owe it to them to make sure that we’re fully aware of the fact that this is still an exposure situation for them; it’s still a risk to their health; [and] it’s still very difficult for their families and for their employers,” Perkins Kwoka told The Counter. 

The New Hampshire legislator isn’t the only lawmaker who has seen a pressing need for paid sick leave policies covering workers. Last week, California Governor Gavin Newsom signed a bill that requires businesses with 26 or more employees to provide supplemental paid time off to those recovering from or caring for ailing family members with Covid, retroactively covering through January 2022 and expiring September 30, 2022. A previous mandate covering paid Covid-related sick leave in the state expired this past September. 

“​​The governor and Legislature heard frontline workers loud and clear, and we appreciate them acting with urgency to get this done,” California Labor Federation Executive Secretary-Treasurer Art Pulaski said in a statement, adding, “Even with the spread of Omicron showing signs of slowing, COVID sick leave will remain in place until the fall of this year to provide a layer of protection against the next variant or surge.” 

California Gov. Gavin Newsom talks with restaurant staff during a bill signing ceremony to extend COVID-19 supplemental paid sick leave for workers. 020922

California Gov. Gavin Newsom talks with restaurant staff during a bill signing ceremony to extend COVID-19 supplemental paid sick leave for workers.

Justin Sullivan/Getty Images

Despite the tenuous nature of government mandates and relief for Covid-related illness, these policies have been a lifeline for those in the hospitality sector. Currently, only a little over a dozen states and Washington D.C. and at least 19 cities and counties have permanent paid sick leave mandates, according to the advocacy group A Better Balance. Yet according to the Bureau of Labor Statistics, only 50 percent of leisure and foodservice workers had access to paid sick leave in 2021, compared to 77 percent of all private sector employees. These jobs typically require that employees work in dense, indoor environments in-person, increasing the likelihood of contracting the coronavirus. And in several cases, fast-food franchises illegally denied workers time off despite being entitled to paid Covid sick leave, or stymied their ability to take time off with logistical requirements like showing a doctor’s note or getting someone to cover their shift. 

“There are always these inequalities in access,” said Daniel Schneider, a professor of public policy at Harvard Kennedy School and co-director of the Shift Project, a collaboration between Harvard and the University of California, San Francisco, that surveys working conditions for retail and service workers. “And what’s made it sort of egregious these days is that they are basically orthogonal to the risk—that those who have the access don’t have the risk, those who don’t [have access] have a lot of the risk.”

Business interests have pushed back on these paid sick leave policies, arguing that they place undue financial strain on already-struggling businesses, and that employees are likely to abuse the system. A 2020 National Bureau of Economic Research (NBER) study, however, found that sick pay is not very costly to employers—roughly 20 cents per hour that an employee works. And the investment of covering employees’ isolation and recovery doubles as insurance against more employees or customers catching the same illness, which could ultimately cost employers more in the long run.

“None of these businesses or workers want to be in a position of asking for aid; let’s not make it any harder on them by failing to anticipate their needs.”

“If [restaurant] owners do not offer that benefit, 50 percent of employees do not have that benefit,” said Nicolas Ziebarth, a health and labor economist at Cornell University and co-author of the NBER study. “If you think that’s a good solution, then you can defend it, of course, but it also means that you have more people going to work sick spreading diseases.”

Putting employers in charge of determining workers’ access to sick pay grants them the power to alter employees’ access to such security, particularly if it is tied to an emergency like the pandemic. This past December, when the Centers for Disease Control and Prevention reduced its recommended quarantine period from 10 to five days, corporations such as Amazon and Walmart cut paid Covid isolation time for employees accordingly. Vicki Shabo, a senior fellow at New America researching paid leave policies, said that these actions taken by employers reflect how putting the paid leave policies in the hands of business owners “necessarily tak[es] power and control away from workers who know what’s best for their own health and for their families.” 

Having paid sick leave recognized as a legal policy, be it permanent or as a temporary Covid measure, is a crucial first step in raising the floor for precarious workers such as those in hospitality, said Schneider. Recent survey data from the Shift Project from September to November last year showed that 85 percent of retail and service workers overall and 79 percent of restaurant workers in California reported having access to sick leave, a much narrower gap compared to 50 percent of workers overall and 33 percent of restaurant workers nationally. 

Even so, having a legal right to paid sick leave and taking steps to inform workers that they have such a right, doesn’t always translate to them using it. Schneider said that some workers have cited their managers pressuring them to come into work or fearing retaliation as reason not to take time off. In other cases, they were concerned that by taking sick leave they would be letting their colleagues down. 

“This particular urgent problem of paid sick leave, it is really bound up with the broader set of precarious labor practices around hours and schedules in the restaurant sector,” said Schneider. “There’s a lot to do even once these rights in theory are on the books.”

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]]> JBS agrees to pay beef wholesalers $52.5 million in latest price-fixing settlement https://thecounter.org/jbs-price-fixing-settlement-meatpackers-52-million-antitrust/ Fri, 04 Feb 2022 20:11:35 +0000 https://thecounter.org/?p=70797 Brazilian meatpacker JBS SA and its U.S. affiliates agreed this week to pay $52.5 million to settle litigation alleging that the company and other packing giants colluded to drive up the price of beef. Plaintiffs alleged that, from 2015 on, JBS worked with other meatpackers to methodically suppress slaughter volumes—an activity that created backlogs at […]

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Antitrust advocates say that doesn’t go far enough.

Brazilian meatpacker JBS SA and its U.S. affiliates agreed this week to pay $52.5 million to settle litigation alleging that the company and other packing giants colluded to drive up the price of beef. Plaintiffs alleged that, from 2015 on, JBS worked with other meatpackers to methodically suppress slaughter volumes—an activity that created backlogs at slaughter plants, made ranchers desperate to sell cattle even at dramatically lower prices, and brought in “sky-high margins” for the companies, according to court documents. JBS did not admit wrongdoing as part of the settlement. 

The deal, which still requires approval by a federal court in Minneapolis, is the first in an ongoing series of related antitrust lawsuits against the so-called “Big Four” meatpackers, which include JBS, Cargill, Tyson Foods, and National Beef.

But the settlement has also divided a broad swath of cattle producers and industry advocates. While some see the news as a promising sign that additional, related lawsuits may bear fruit, others feel that a patchwork of legal cases will do little to cure the ills of a deeply consolidated marketplace. These critics remain focused on obtaining more comprehensive and forceful reforms, renewing calls for the Department of Justice (DOJ) to release the findings of its longer-term investigation into anticompetitive activity.

“It’s not a deterrent. A penalty should be a deterrent for future actions.”

News of the settlement comes just a month after the Biden administration announced a $1 billion investment to bolster competition in the livestock industry. And on Thursday, DOJ and the Department of Agriculture (USDA) launched a new online portal that will allow farmers and ranchers to report their own experiences of anticompetitive behavior.

Despite this kitchen sink of federal-level efforts, however, some cattle producers and their representatives fear that the relatively small settlement will do little to slow corrupt activity in an industry that brings in an estimated $63 billion annually. Packers won’t actually feel squeezed, they say—instead, they’ll just figure such deals into the cost of doing business.

“They can profit from it, they can pay the fine, and they know they can do it again,” Joe Maxwell, president of Farm Action, said of this week’s deal, announced on Tuesday. “It’s not a deterrent. A penalty should be a deterrent for future actions.”

Lawyers for the plaintiffs noted that the proposed payout was more than double what the company had agreed to pay in 2020 in a settlement with pork wholesalers, which amounted to $24.5 million. JBS also agreed last year—in two additional pork price-fixing suits—to pay out nearly $13 million to retailers and restaurants, as well as another $20 million in consumer claims. Meanwhile, the company has seen its profits continue to soar, reporting an estimated $1.8 billion in Q3 for 2021 and 146 percent year-over-year growth.

“They represented their plaintiffs but they didn’t represent all of us consumers and farmers and ranchers, so JBS takes a walk.”

Meatpackers’ growing record of eight-figure settlements is seen by some industry groups as a mere rebate for their illegal anticompetitive activity and, worse, allows companies to avoid the admission of wrongdoing. Maxwell said that payouts over price-fixing allegations come nowhere close to reflecting the true cost of damages for industry collusion. 

“I can understand the attorneys’ zeal to settle for that kind of money but their case didn’t involve everyone that paid a price for [the market manipulation],” Maxwell said. “They represented their plaintiffs but they didn’t represent all of us consumers and farmers and ranchers, so JBS takes a walk.” 

For their part, lawyers described this latest settlement as a win—in part because it will require that JBS provide “extensive cooperation” in the plaintiffs’ pursuit of further antitrust claims against other non-settling meat packers. JBS did not respond to a request for comment. 

Cattle producers, led by the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA), which advocates for the success and rights of independent producers, brought a similar case in 2019 against meatpackers that include the Big Four, alleging that they artificially lowered the slaughter supply, resulting in depressed prices for farmers and ranchers as meat-packers raked in record profits. With that case currently in discovery, CEO Bill Bullard said the fact that beef wholesalers reached a settlement at all with JBS is slight cause for optimism. “It suggests that the case is meritorious,” he said. “And because of the similarity with our case, you could apply that there too.” 

There was more encouraging news for producers this week. Senator Chuck Grassley, the Republican from Iowa and member of the Senate Agriculture Committee, used news of the settlement to push for passage of the bipartisan Cattle Price Discovery and Transparency Act, which aims to improve fairness and transparency in the beef market. Grassley, one of the bill’s authors, said in a statement that “although the settlement is a spit in the ocean compared to JBS’ record profit throughout the pandemic, it validates what cattle producers have been telling me when they try to get a fair price in the marketplace. It’s time to put an end to these price fixing schemes once and for all.”

“It is clear from this settlement that cattle producers still don’t have all the information they have demanded and is deserved.”

The National Cattlemen’s Beef Association (NCBA) was the first national organization to request an investigation into beef markets in 2019. It said in a statement that the settlement was “deeply disturbing” because it precedes the release of potentially critical information from DOJ’s investigation, which it believes is essential to determining the scope of damages done. But more than a year and a half since the department first subpoenaed JBS, Cargill, Tyson Foods, and National Beef, producers say they have received no updates.  

“It is clear from this settlement that cattle producers still don’t have all the information they have demanded and is deserved,” said Colin Woodall, CEO of NCBA. “The DOJ has an obligation to finish their investigation. Cattle producers do not have years to wait for the government to determine whether there has been wrongdoing, we demand answers now.”

Producers aren’t the only ones who don’t want to wait. In December, attorneys general from 16 states signed a letter addressed to Agriculture Secretary Tom Vilsack, requesting that USDA grant funding through the American Rescue Plan to strengthen their own antitrust investigations and enforcement in the sector. 

“State attorneys general have the potential to have significant impact on agriculture market concentration, but lack of resources is a perennial limitation on what states can do,” the group said in its letter.

There is some hope that the new online portal launched by the DOJ and USDA this week could be another tool in the White House’s fight for a more fair industry. The portal, which allows farmers and ranchers to anonymously document any tactics that have a whiff of anticompetitive practices, could potentially lead to the departments opening formal investigations. Producers are likely to say they’ll use all the help they can get. 

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]]> California assembly passes “first of its kind” regulation bill, giving fast-food workers the ability to negotiate for better pay and working conditions https://thecounter.org/california-fast-food-regulation-bill-worker-negotiation-pay-ab-257/ Tue, 01 Feb 2022 18:35:42 +0000 https://thecounter.org/?p=70522 A union-backed fast-food regulation bill, which would guarantee the state’s more than half-a-million foodservice workers the ability to negotiate with franchise owners and corporate giants for better wages and workplace standards, squeezed through the California State Assembly on Monday. Legislators voted 41 to 21 in favor of Assembly Bill 257, also known as the Fast […]

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AB 257 would establish an independent council to discuss and set industry-wide minimum standards, a move labor advocates have wanted for years.    

A union-backed fast-food regulation bill, which would guarantee the state’s more than half-a-million foodservice workers the ability to negotiate with franchise owners and corporate giants for better wages and workplace standards, squeezed through the California State Assembly on Monday.

Legislators voted 41 to 21 in favor of Assembly Bill 257, also known as the Fast Food Accountability and Standards Recovery Act (FAST Recovery Act), which will now move to the state senate. This was the second time the Assembly voted on the bill, having fallen short by three votes this past June.

The FAST Recovery Act would establish the Fast Food Sector Council, comprising 11 individuals chosen by the governor and state legislators. The council would meet every three years to negotiate and recommend industry-wide minimum standards concerning pay and working conditions like safety and training. The legislature would then be able to amend or repeal the recommendations before their adoption. The appointed body would include five representatives for state agencies that handle labor, health, and workplace safety; two workers and two employee advocates; and one representative each for franchisees and corporations. 

The legislation, which would apply to any fast-food chain with 30 or more locations nationally, would also hold fast-food brands and local franchise operators jointly liable for any violation of the council’s recommended standards or existing labor laws. (Workers at franchise locations are technically employed by the franchisee, not the fast-food company like McDonald’s, which under current federal labor law heavily shields the company from responsibility for workplace violations at stores.)     

“California has a chance to lead the country and address long standing issues in the fast food industry by creating a statewide fast food sector council.”

Democratic Assemblymember Chris Holden, one of four assemblymembers who reintroduced AB 257 with amendments in late January, said Monday on the Assembly floor that the bill would help uplift workers and small business owners throughout the fast-food sector. 

“California has a chance to lead the country and address long-standing issues in the fast-food industry by creating a statewide fast-food sector council,” said Holden, a former Subway franchise owner, adding that the the bill “is about fairness, and it is about bringing all the responsible parties to the table to collaborate on solutions.”

Since its initial introduction in January 2021, AB 257 received an outpouring of support from the labor movement, with the Service Employees International Union (SEIU) and the affiliated Fight for $15 campaign agitating for its passage. Over the past year, workers at McDonald’s and Jack in the Box locations across the state have walked off the job to hold rallies, demanding that their legislators vote in favor of AB 257 while carrying signs reading “Which side are you on?” 

Imelda Rosales, a McDonald’s worker in the Los Angeles area and a member of the Fight for $15 campaign, told The Counter (in Spanish through a campaign translator) that the bill could help pave the way for a much-needed overhaul in the fast-food industry, particularly when it comes to pay and worker safety. 

During the global health crisis, almost two-thirds of workers said they experienced wage theft.

“It’s gonna be a lot easier to have a voice at the table and make changes, that way they’re not going to have to continue with the same strategy of having to do strikes,” Rosales said of her colleagues. She later added that when it comes to the bill holding fast-food brands accountable for issues like wage theft or sexual assault, “the corporations should’ve been responsible for what’s happening in the franchises to begin with.”

According to a 2021 report by the University of California, fast-food workers across the state—an estimated 557,000, the vast majority of whom are people of color and women—earn a median annual wage of just under $26,000, and two-thirds say their families rely on social safety net programs. On top of low wages, sexual harassment and regular violent encounters on the job have plagued fast-food workers, as has working in extreme heat. The Covid-19 pandemic has further exacerbated the fraught nature of fast-food workplaces, with a survey by the UCLA Labor Center of Los Angeles-area workers finding that nearly a quarter contracted the virus since mid-2020; fewer than half said they were given paid sick leave if they or a co-worker contracted the virus. During the global health crisis, almost two-thirds of workers said they experienced wage theft.

Although the fast-food sectoral council would be a first of its kind in both size and scope, there have been similar recent efforts across the United States. In 2015, New York State convened a wage board to determine whether to raise the minimum wage for fast-food workers to $15, which then voted to raise workers’ pay. In 2018, Seattle established a broader labor standards board for domestic workers, which would make suggestions to the city council and other legislators for improving laborers’ pay and working conditions. Detroit did the same in late 2021, with legislation covering multiple industries.  

Business groups strongly pushed back against AB 257, claiming that the legislation would severely harm franchise operators. Mark Turner, president and CEO of the Gilroy Chamber of Commerce, said in an email that new standards set by the council could create increased costs for franchisees without any increase in sales, potentially leading to a “reduction in staff, cutting hours back, and/or an investment by the franchisee in technology that replaces [workers] altogether.” 

AB 257 could ultimately relieve the competitive pressure that ultimately leads to a race to the bottom on pay and other conditions.

Jeff Hanscom, vice president of state and local government relations for the International Franchise Association, told The Counter in December that beyond ceding the development and enforcement of industry regulations to unelected officials, AB 257 would discourage entrepreneurs from buying into franchises by reducing their independence from fast-food corporations. 

“Franchising provides unparalleled opportunities for entrepreneurs in California, and better wages, hours, benefits for their workers, and this misguided proposal threatens thousands of California entrepreneurs and workers,” Hanscom said in a statement after the bill’s passage on Monday.

But Brian Callaci, chief economist at the Open Markets Institute who researches franchises, pushed back against this framing. He noted that with the modern franchising model, franchisees already are extremely limited in their ability to deviate from the strict provisions written into their franchising agreements. In addition to paying royalties and marketing fees to brands like McDonald’s and Taco Bell, franchisees are contractually obligated to abide by a host of specific requirements, including menu pricing, authorized ingredient suppliers, and many other operational considerations. Beyond minimizing franchisees’ ability to make decisions independently from corporations, these requirements often leave labor costs as the only means by which to eke out a profit, ultimately putting a downward pressure on workers’ pay and disincentivizing the franchisees from providing better benefits, potentially pushing them toward breaking employment laws. 

By having workers negotiate together with franchisees and franchisors on minimum standards that would apply to franchisees across the industry, Callaci said, AB 257 could ultimately relieve the competitive pressure that ultimately leads to a race to the bottom on pay and other conditions. For instance, franchisees would be able to tell fast-food brands that to pay a higher minimum wage while maintaining market competitiveness, they may have to loosen up on requirements like mandatory pricing for suppliers. Furthermore, AB 257 not only holds franchisees responsible alongside franchisors for violating the council’s standards or existing labor laws, it also enables them to sue fast-food corporations if a franchise agreement’s policies essentially coerce them into breaking these regulations. “The whole reason that [fast-food companies] do franchising, the motivation for developing the business structure, is to get that control that they like and avoid the responsibility,” Callaci said. “Making the franchisors own it helps them behave more responsibly.”

Should the bill ultimately become law, David Madland, senior fellow at the Center for American Progress, said it’s possible that other states would establish their own sectoral councils to tackle the issue of working conditions across the fast-food industry. 

“It would be the first of its kind for fast-food workers that really transforms an industry with the kinds of challenges that many other states and the whole country are trying to figure out how to deal with,” Madland said. “That really could spur others to act. That would be, I think, one of the most important things that could come out of this.”

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]]> What if you could invest in your favorite local restaurant and actually make money in the process? https://thecounter.org/investment-crowdfunding-local-restaurants-profits-community-honeycomb/ Thu, 20 Jan 2022 18:21:58 +0000 https://thecounter.org/?p=69973 In late 2020, Neil Blazin made the decision to update operations at his Pittsburgh pizzeria, Driftwood Oven. His timing, however, wasn’t great. The pandemic’s second wave was looming, with cases rising and Pennsyvlania seeing record-breaking daily deaths by mid-December; banks were drowning in paperwork for Small Business Administration guaranteed loans; large private investors had disappeared. […]

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“Investment crowdfunding” allows anyone to become a bargain-bin venture capitalist, helping restaurants finance their recoveries and growth.

In late 2020, Neil Blazin made the decision to update operations at his Pittsburgh pizzeria, Driftwood Oven. His timing, however, wasn’t great. The pandemic’s second wave was looming, with cases rising and Pennsyvlania seeing record-breaking daily deaths by mid-December; banks were drowning in paperwork for Small Business Administration guaranteed loans; large private investors had disappeared. The chef-owner decided to raise at least $60,000 from those who had a vested interest in his success: neighborhood customers. 

This wasn’t Blazin’s first time crowdfunding. In 2017, when he and his former business partner needed help financing the pizzeria’s brick-and-mortar opening, they launched a Kickstarter campaign, bringing in over $44,000 in exchange for t-shirts, pizza, and pie-making workshops. But this time Blazin went with a platform called Honeycomb Credit, one he described as offering a “grown-up” version of crowdfunding: He promised to pay back his investors over five years, and to provide a return on their investment, at 8.5 percent annual interest. In less than two weeks, 70 people put their money where their stomachs are, and chipped in the maximum investment total of $150,000. Several more clamored, albeit unsuccessfully, to get in afterward. 

“It really brings a lot of joy to know that people who are continuing to buy pizza are investing,” Blazin said. “It’s not just like buying stock in something nameless. You’ve actively made that choice to invest in the place that you live.”

It’s hard to go a week without scrolling past GoFundMe and Kickstarter campaigns to help finance a pop-up baker’s new dessert bar or to keep a dying institution afloat. But in the past five-plus years, dozens of restaurant owners like Blazin have explored a newer, less-common method of crowdfunding, known as regulation or investment crowdfunding, where customers can potentially rake in actual financial returns on their investments. 

Investment crowdfunding platforms like Honeycomb, which are registered with the Securities and Exchange Commission (SEC), enable customers to become investors in the notoriously risky hospitality industry. This fundraising model differs from familiar donation- or rewards-based crowdfunding sites, where benefactors give money gratis or in exchange for smaller gifts like merch or a free meal. And it’s different from traditional restaurant investing, where one often buys equity shares in a venture. The majority of restaurant offerings on investment crowdfunding platforms are for debt-securities, or a loan repayment plus interest scheduled over a number of years. Still, like their traditional counterparts, crowdfunding investors are linked to restaurants for years to come, their fortunes rising (and in some cases, falling) with an operation’s performance.

Restaurants are increasingly turning to this crowdfunding model to raise capital. In 2016, 14 restaurants raised $2.8 million through investment crowdfunding platforms, according to Sherwood Neiss, principal at Crowdfund Capital Advisors, a crowdfund investing advisory firm. That number has more than quintupled, to 72 in 2021, which raised $13 million, with the average raise of $181,000. 

Many small-time investors say they aren’t expecting wild returns from financing their local red-sauce joint; rather, beyond the promise of getting their money back and then some, there’s the emotional payoff of bankrolling the survival and growth of their neighborhood restaurants. 

“The Honeycomb model really allows the regular customers of a restaurant the ability to speak with financial backing to say, ‘You know what? This is a great spot. We want them to be stable. We want them to remain,’” said Paula Rehn, a retiree who invested $2,000 in the Driftwood campaign. “If they can’t get a loan from a bank or from other investors, but we eat here and they fill our bellies every week, we’re really willing to pony up some money and provide them with a loan.” 

“There’s been a general trend among restaurants to leverage the power of their customers to provide the financing for their growth.”

Online crowdfunding has swelled in popularity over the past two decades, helping artists and entrepreneurs raise modest sums to construct prototypes or fund their art projects. But in 2016, the implementation of Title III of the JOBS Act enabled anyone to become a bargain-bin venture capitalist, allowing non-accredited investors to buy equity and debt securities from startups and other small businesses financing their operations. There are limits, including a cap on how much individuals can invest and the total amount businesses can raise (currently $5 million per year), and a requirement that securities be purchased online through SEC-registered funding portals or broker-dealers. Companies must file information disclosures with the SEC as well as with the intermediary and investors. 

Neiss of Crowdfund Capital Advisors says that this kind of capitalization has caught on in the restaurant industry because of customer loyalty. “There’s been a general trend among restaurants to leverage the power of their customers to provide the financing for their growth,” Neiss said. “Layered on top of that is these customers that love these restaurants didn’t want to see them go under during the pandemic and so have been the financiers of their comeback.”

Lashauna Jones co-founded the hot dog company Sporty Dog Creations in Baltimore, Maryland, together with her daughter, Daejonne Bennett. For years, the pair operated out of stalls at farmers’ markets around the city, hawking sausages dressed with piles of arugula and feta or black-eyed pea chili and caramelized onions, the latter inspired by the city’s historic Negro League baseball team. Jones said that when the pandemic put an indefinite pause on sales, they began to look at the possibility of mounting their return with a permanent sit-down location. Like so many other small business owners, Jones and Bennett were concerned about the challenges—or even the likelihood—of qualifying for a bank loan. But with assistance from the local nonprofit Community Wealth Builders, the pair turned to their community for financial support. 

Having the backing of dozens of investors through crowdfunding, Jones said, provides a proof of concept that could help convince banks to loan her an estimated $120,000.

Some of the customers who stop by Fort Defiance to buy sundries and sandwiches are among the 107 people to whom he owes thousands of dollars.

“At that point, I think it holds or bears more weight,” Jones said, noting that Sporty Dog raised over $31,400 through a Mainvest campaign last year. “If the bank sees that you’ve raised $30,000, or $50,000, through crowdfunding, they’re like, ‘Okay, they have supporters.’ That could transcend over into something else.” 

St. John Frizell, owner of Fort Defiance in Brooklyn, decided to try crowdfunding in the hope that it would be quicker than applying for an SBA loan, which can take two to three months, with some predicting double that. That’s if a business owner even qualifies, which Frizell thought would be unlikely given his pandemic-laden debt. He launched his WeFunder campaign on a Friday last March, assuming it would take six to eight weeks. But by the following Monday, he’d raised over $100,000 from friends and neighbors.

“I threw out my calendar and I said, ‘Well, okay, I guess I can work on other things,’” Frizell said this past November.

Still, asking for neighbors’ and customers’ buy-in has added an additional layer of stress that would not have accompanied a traditional bank loan. Some of the customers who stop by Fort Defiance to buy sundries and sandwiches are among the 107 people to whom he owes thousands of dollars. And they were on Frizell’s mind in December, when he made the tough call that it would make more economic sense to hibernate Fort Defiance through at least February while waiting for a new liquor license, a move that had an impact beyond just himself and his staff. 

“I was looking for a way to invest in a business where I could see the results instead of writing a check and sending it to someone.”

“This was not an easy decision, and not easy to explain to our neighbors/investors,” Frizell wrote in an email, adding, “Knowing my investors were watching forced me to face facts and do what was right for the company, even if it was difficult.” 

But crowdfund investors can sometimes see a windfall as secondary to their desire to promote community building or salvage their local social hub, said Matthew Josefy, a professor of strategy and entrepreneurship at Indiana University who has researched crowdfunding. 

“You have a decent number of young professionals with some disposable income who desire to be generous, and this is a need that they can see themselves being excited about but also still potentially benefiting from, in perpetuating community and creating the kind of spaces that they’d like to be part of in,” Josefy said. “A restaurant kind of is at that boundary of need and desire.” 

Following the 2020 protests over race and policing in Baltimore, Patricia Adams, director of neighborhood development for a nonprofit developer, sought to support local Black-owned businesses with money she had made through real estate investments and refinancing her home. After learning that Jones was looking to expand Sporty Dog into a full-service restaurant near where Adams works, she handed over $5,000, with little interest in the advertised returns.  

“I just think it is really neat to use your own customer base and your own energy to fund what you want to do.”

“I was looking for a way to invest in a business where I could see the results instead of writing a check and sending it to someone,” Adams said. She later added, “If I actually get this money back, I’ll just find another business to invest in and just keep that rolling.”

But restaurants fail: The median lifespan of restaurants, according to a 2014 estimate, is 4.5 years, and closure rates, both temporary and permanent, have soared over the past two years. If a restaurant financed through investment crowdfunding defaults before it fulfills its loan obligations, creditors could work out a deal to give the restaurant more time on repayment, or could even forgive the collateralized loans, if they are feeling moved by the communal spirit. Should they feel less charitable, they could choose to hire a collections lawyer and carve up the business, likely for pennies on the dollar. 

For Adams, there’s little desire to go after Sporty Dog should the business fall behind on its repayments or, worst-case scenario, have to close.   

“When I give people money, I don’t have the expectation to get it back,” Adams said. “If I don’t, it’s for a good reason.” 

Blazin of Driftwood Oven said that thanks to last year’s crowdfunding campaign, the pizzeria has expanded its hours of operation to include lunchtime and weekend bakery service, and increased its prep space to take on larger catering contracts. 

“I just think it is really neat to use your own customer base and your own energy to fund what you want to do,” Blazin said. “If we had failed the Honeycomb campaign, that would have been like, ‘Wow, the customers don’t really want that. Let’s just stay where we’re at.’”

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]]> Study shows Starbucks, Whole Foods employee vaccination rates above 70 percent. Taco Bell, Subway under 50 percent https://thecounter.org/starbucks-whole-foods-employee-vaccination-rates/ Thu, 13 Jan 2022 13:00:00 +0000 https://thecounter.org/?p=69628 Update, January 13, 2022, 4:50 p.m., EST: On Thursday afternoon, the Supreme Court blocked the Biden administration’s vaccine-or-testing mandate for large private employers, but upheld a requirement that healthcare workers at facilities that receive federal funding be vaccinated. It wasn’t just the mid-December Covid outbreak at his Taco Bell location that frustrated Max Klein. The new […]

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Recent findings from Harvard and the University of California, San Francisco show fast-food companies faring worst at staff vaccination rates compared to retail and service firms.

Update, January 13, 2022, 4:50 p.m., EST: On Thursday afternoon, the Supreme Court blocked the Biden administration’s vaccine-or-testing mandate for large private employers, but upheld a requirement that healthcare workers at facilities that receive federal funding be vaccinated.

It wasn’t just the mid-December Covid outbreak at his Taco Bell location that frustrated Max Klein. The new Omicron variant had just begun to sweep the nation, and having worked more than a year in an industry with high customer traffic, exposure to the virus was inevitable. So Klein assumed that, like he had, most of his co-workers would get vaccinated. But at the Joliet, Illinois, store where Klein worked, he said his vaccine status made him something of an anomaly, not the norm. And this surprised Klein.

The policy at his franchise location was that any unvaccinated person exposed to Covid had to quarantine until they could produce a negative test for the virus, regardless of whether they had actually contracted it. But at some point during the early-stage Omicron chaos, Klein said, a little back-of-the-envelope arithmetic told him that roughly sixty percent of his co-workers had not been vaccinated. To keep the store open and serving lines of hungry customers, only six employees eligible to work were kept on as a skeleton crew, working odd hours with limited support for weeks until around 9 of his other co-workers returned. 

“It all just got thrown out of whack because people wouldn’t take that responsibility,” Klein said. “I don’t really know why they wouldn’t get vaccinated. It just seems like a no-brainer.”

Meanwhile, the government’s piecemeal, slow-rolling vaccine mandate battle rages on for private-sector employers. Last week, the Supreme Court heard challenges to the Biden administration’s mandate, issued in November, which requires that companies with 100 or more employees must ensure their staff is vaccinated by February 9 or have them undergo weekly tests. 

“My responsibility, and that of every leader, is to do whatever we can to help keep you safe and to create the safest work environment possible.”

At the municipal level, similarly sweeping policies have been implemented for the first time over the past month. New York City, for instance, now requires nearly all private businesses to verify that their in-person workers are vaccinated or face financial penalties, with exceptions for religious and medical reasons. Large, private corporations have also given employees the option of the jab or their job, including United Airlines and, just this past week, Starbucks. 

In a letter to employees announcing that they would have to show proof of vaccination or submit to weekly testing in accordance with the federal vaccine mandate, Starbucks chief operating officer John Culver wrote, “My responsibility, and that of every leader, is to do whatever we can to help keep you safe and to create the safest work environment possible.”

Culver may be in the mandate minority, but even without the new policy, his company has far outpaced many other national food-service brands in getting its employees vaccinated, according to a December study by the Shift Project, a collaboration between Harvard and the University of California, San Francisco (UCSF). 

“When you see some of these service sector employers getting up to the 80s and others down below half, then you have to scratch your head and wonder … why is fast-food so much lower?”

The Shift Project has been surveying employees since 2016 to understand working conditions across the service and retail sectors. In their latest snapshot, the study’s authors sought to capture not just different industries’ employee vaccination rates, but also those of individual large firms. 

“We’re able to identify employers by name, which is pretty unique,” said Kristen Harknett, one of the study’s authors and a professor of sociology at UCSF, “and then do the compare-and-contrast across employers, which can be really illuminating.” Although the study’s authors found large variations in vaccination rates among employers, only around half of food-service sector workers, which includes those at fast-food, fast-casual and casual sit-down chains, were vaccinated on average last fall. “Rates of vaccination remained stuck at the levels last seen in the general population in the Summer of 2021,” the study’s authors wrote about many large food brands. 

To determine vaccination rates, the researchers conducted online surveys with more than 4,300 workers employed across large companies in the retail, food-service, grocery, delivery, and other service sectors between late September and November of 2021. Among the 37 companies included in the study were fast-food giants like McDonald’s and Subway, as well as grocery and department store chains. Besides asking workers about their vaccination status, the researchers wanted to know what companies themselves were doing to incentivize their employees to get vaccinated and—perhaps more important—what might be dissuading them from getting the vaccine.  

Retail sectors, including grocery, reported vaccination rates between 60 and 86 percent, with Whole Foods and Safeway turning in some of the highest numbers. Walmart and Target showed comparable numbers, at 66 percent and 83 percent, respectively. 

The food-service sector, meanwhile, showed much lower vaccination rates. Waffle House employees, for instance, were at 50 percent, Chick-Fil-A’s were at 53, and 56 percent of the McDonald’s workforce was vaccinated. Subway and Taco Bell ranked lowest, with 43 percent and 46 percent of their workers vaccinated, respectively. ​​Starbucks stood out as the industry leader, at 79 percent.

“When you see some of these service sector employers getting up to the 80s and others down below half, then you have to scratch your head and wonder … why is fast-food so much lower?” said Harknett. 

“If we compare the things that employers do to encourage vaccination and split that out by fast-food, fast-food employers really do very little.”

Harknett noted that there were a number of factors contributing to the lower vaccination rates among restaurant and fast-food brands. Workers across the board were skeptical of the vaccine, with a little over half of all unvaccinated survey participants saying they didn’t trust the vaccine, and 49 percent citing concerns about side effects. But older age correlates to higher vaccination rates, Harknett said, and food-service workers were on average 10 years younger compared to the rest of the survey participants. Younger workers, she said, are more likely to be vaccine hesitant or disinclined to get their Covid shots because they tend not to be as concerned about getting infected with the virus. 

Another crucial factor in vaccine uptake—or lack thereof—is whether or not employers had implemented policies to entice or accomodate their workers with getting vaccinated. Additional survey data provided by Harknett showed that only 22 percent of food-service brands aided or incentivized workers to get the vaccine, compared to 56 percent of non-foodservice companies. The vast majority of workers who reported to the study’s authors that their companies had provided some incentive also said that they’d gotten the vaccine. 

“When employers grease the wheels, they make it easier by giving paid time off for the vaccine, offering the vaccine on site, giving a bonus if you get the vaccine. That makes a big difference,” Harknett said. Starbucks, for example, has provided two hours of paid time off for each vaccine dose, along with four hours for related side effects. “If we compare the things that employers do to encourage vaccination and split that out by fast-food, fast-food employers really do very little,” she added.

A complex web of factors—including race, geography, and gender—can influence whether a person will or will not get the shot. Those variables may have much less to do with who a person is employed by, and much more to do with the world they live in outside of work.

But Robert Fullilove, professor and associate dean at Columbia University’s Mailman School of Public Health, who is not involved in the Shift Project, said it’ll be difficult to draw too many conclusions from this study because it doesn’t tell us enough about the myriad reasons behind personal vaccine decisions. A complex web of factors—including race, geography, and gender—can influence whether a person will or will not get the shot. Those variables may have much less to do with who a person is employed by, and much more to do with the world they live in outside of work.

“If it is unique to where you work, I would want to see something in addition to that to have me feel that we’re not just looking at something that we already know: that there’s a lot of variation, depending on a variety of different factors, as to who’s vaccinated and who’s not,” Fullilove said. 

For now, Klein, the Taco Bell employee, is hoping that, whether or not the federal mandate holds, his store will soon start to require that all employees get the vaccine.

“I kind of wish that they enforced it more sooner because the people that get up in arms over stuff like vaccine mandates are like, a very loud minority,” Klein said. “I feel like your common layman would just shrug and get the vaccine if they had to.”

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]]> Inspired by success in Buffalo, Starbucks union drive expands rapidly https://thecounter.org/starbucks-union-success-buffalo-coffee-four-more-stores/ Tue, 11 Jan 2022 20:13:20 +0000 https://thecounter.org/?p=69538 Workers at four Starbucks stores across the country filed petitions for union elections with the National Labor Relations Board (NLRB) in the course of the last week, the latest in a swelling wave of labor activism that has swept the coffee giant since workers at one location in Buffalo, New York, voted to unionize a […]

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Four more stores have filed union papers in the last week alone, and one more store in Buffalo has now unionized.

Workers at four Starbucks stores across the country filed petitions for union elections with the National Labor Relations Board (NLRB) in the course of the last week, the latest in a swelling wave of labor activism that has swept the coffee giant since workers at one location in Buffalo, New York, voted to unionize a month ago

The federal agency also determined on Monday that Starbucks workers at a second location in the Buffalo area had won their union election, where the results were inconclusive in the December vote count due to challenged ballots.  

The latest stores to file for union elections, located in Cleveland, Chicago, Hopewell, New Jersey, and Eugene, Oregon, have joined the growing ranks of Starbucks and other coffee shops seeking union representation. This signals just how quickly organizing efforts have proliferated since Buffalo workers became the first out of roughly 9,000 company-owned stores to have union representation since the 1980s. These include locations in Seattle; the greater Boston area; Broomfield, Colorado; and Knoxville, Tennessee, in addition to three others in Buffalo and one in Mesa, Arizona, that filed petitions for an election prior to the December victory. Workers at these dozen-plus stores are looking to join Workers United, an affiliate of the Service Employees International Union, which also represents both of the unionized Buffalo locations. 

“There’s not really anything to lose and a whole to gain.”

Madison VanHook, a shift supervisor at the West 6th Street Starbucks in Cleveland, which filed its petition on Monday, said the organizing efforts at her store were inspired by the union campaign led by their colleagues in Buffalo. There wasn’t any one particular issue that pushed workers at her store, whom she estimates roughly 80 percent of have signed union cards, to begin organizing. Rather, many were attracted to the idea that a union could give them a say in company decisions that have a direct impact on their workplace. 

“There’s not really anything to lose and a whole to gain,” she said about unionizing, citing complaints such as low wages and understaffing that have plagued other stores around the country well before the pandemic. Many workers also complained about a five-day general training process that those on both ends say is rushed and leaves them feeling like they “are simply cogs in a machine.” VanHook said she was concerned with the company’s shifting Covid-19 safety protocols for workers, which currently do not allow workers to use their paid time off for isolation in some circumstances. “You have to either cut into your sick time or your personal time off if you want to take time off or just come into work and risk it,” she said. 

Rebecca Givan, an associate professor of labor studies at Rutgers University, said the rate at which Starbucks employees are organizing their stores is “unprecedented.” 

“They’re talking to their coworkers, and they’re quickly getting enough signatures to file a petition. And many of the locations are places where the workers have a good chance of success.”

“This is clear that workers are paying attention and they’re starting their own organizing drives,” Givan said. “They’re talking to their coworkers, and they’re quickly getting enough signatures to file a petition. And many of the locations are places where the workers have a good chance of success.”

Last year’s months-long organizing campaign in Buffalo also offers a roadmap for the possible corporate opposition that stores around the country could soon face. The company shuttled in executives and outside managers to lead meetings that workers said were aimed at dissuading them from voting to unionize. Management even temporarily shut down locations that had sought to organize workers. Starbucks has also repeatedly pushed against store-by-store union elections in favor of market-wide votes. The NLRB, however, has continued to reject the company’s arguments, most recently for the Mesa, Arizona, store, whose employees are scheduled to vote this month.

Employees in Mesa have said that the company is now using a similar playbook to undermine their campaign. Among the allegations are that Starbucks has flooded the store with new managerial staff and that the company has directed higher-ups to hold meetings with employees to convince them to vote “no” on their election ballots. 

Starbucks has previously said that it dispatched company executives and outside managers to Buffalo to help with staffing issues, not to undermine the organizing efforts. Reggie Borges, a spokesperson for Starbucks, said that the company is “not anti-union” and that it wants to ensure that every worker “is informed and that they make the right decision for themselves.” 

“No other partners should have to endure what we went through to have a voice on the job.”

On Monday, Starbucks organizers notched another significant gain, with the NLRB ruling that seven challenged ballots in the Genesee street election were ineligible, giving the union a 15-9 win. The union lost an election at a third Buffalo area store in December, 12-8. 

“Today we put an end to Starbucks’ delay attempts and formed our union,” Alexis Rizzo, a shift supervisor at the Genesee Street location, said in a statement following Monday’s ruling, adding, “We demand that Starbucks stop their union busting in Buffalo and across the nation immediately. No other partners should have to endure what we went through to have a voice on the job.”

Borges said on Monday that the company is currently evaluating its options for appealing the ruling, and that the company believes its employees’ voices deserve to be heard. 

The year has only just begun, but Givan, the Rutgers professor, predicts that at the current clip Starbucks coffee shops have been announcing their intent to unionize, it’s quite likely that many more will join them in the near future. 

“We have to assume that if a dozen are advanced enough in their organizing that they have enough signatures from the NLRB petition, and they’re going with more signatures than they need, that there have to be dozens more that are working towards filing,” Givan said. 

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