McDonald's to be testified against at Senate hearing

The McDonald's fast-food chain does not just sell fast-food. It also exports a business model that, on the one hand, yields billion-scale profits, but, on the other hand, is widely seen as a poor example in labor relations and as a source of damage to public coffers. The issue will be raised today (Aug. 20) by Scott Courtney, Organizing Director of the Service Employees International Union (SEIU), during a public hearing at the Senate.

During an exclusive interview to Agência Brasil held yesterday (19), Courtney said that, due to the significance of Brazil's role in the global scenario, the upcoming hearing will serve as a starting point for raising awareness about the issues in the chain not only in Brazil but worldwide. Brazil is a key player not only because of its economic importance, but because it has a more advanced legal framework to support workers than the one observed in other countries. With Brazil's prominent position, he believes, the Latin American country will certainly help expand the scope of campaigns aimed at casting light on the underlying the labor issues at McDonald's, thus encouraging authorities to confront the company.

Courtney is in Brasília for the of the 1st International Conference of Fast-Food-Chain Workers. Organizers estimate the event will bring 80 foreign visitors including workers, union leaders, and Congress members from 20 countries. By sharing experiences in this and previous events, Courtney came to the conclusion that, as an industry leader, not only is McDonald's a bad role model for the food industry, the fast-food giant also contributes to relaxing labor relations and regulations of other countries.

Red flag

Courtney said he will raise a red flag during today's Senate hearing in a bid to make lawmakers aware of the potential risks of service outsourcing in Brazil. Brazil's outsourcing attempts are a step toward practices perpetrated by companies like McDonald's, the activist says, adding that changes in labor lies can only be made gradually. Courtney is sure the influence McDonald's model exerts on making these changes happen is tremendous, in that it loosens labor laws in a way that is detrimental to the rights of workers.

According to the US activist, by paying low wages, the company also brings losses to public coffers. He mentions a US study which found that low wages paid by McDonald's cause the US government to pay out $1.7 billion in social subsidies and benefits to employees every year. In addition to the low wages, he claims, the company takes advantage of tax havens to dodge taxes. In Europe, he adds, tax evasion committed between 2009 and 2013, in Luxembourg, for instance, have amounted to 1.2 billion euros.

Contacted by Agência Brasil, a spokesperson for McDonald's said the company respects its employees and that they are “absolutely certain” the company complies with all legal requirements. In a statement, McDonald's said the company is “proud to be the gateway for thousands of young people into the labor market” and that their labor practices “are awarded and recognized by the market.”

McDonald's went on to say that it has even been awarded a “first job” award by the Ministry of Labor and has recently been ranked as the 13th Best Company to Work For by Great Place to Work. “Our employees receive ongoing training, both for operational tasks and such skills as teamwork, communication, leadership, and hospitality. Over the course of three decades in Brazil, the company has offered training to more than 1.5 million people."

Translated by Mayra Borges / Fabrício Ferreira