http://www.businessweek.com/articles/2013-08-09/the-employer-friendly-case-for-pricier-big-macs

Fast Food

The Employer-Friendly Case for Pricier Big Macs


Protesters for a living wage, in Washington, D.C., on July 11, 2013

Photograph by Andre Chung/MCT via Getty Images

Protesters for a living wage, in Washington, D.C., on July 11, 2013

In all the debate about whether to raise fast-food wages—from Fox News (FOXA) anchor Neil Cavuto’s fond memories of frying fish for $2 an hour at Arthur Treacher’s to the specter of paying 25 percent more for a Big Mac—it’s easy to forget the other costs associated with fast food.

Americans are expected to spend more than $188 billion at the country’s 160,000 fast-food outlets this year, according to the National Restaurant Association. With 14,100 locations, McDonald’s (MCD) accounts for less than one-tenth of that spending. The nation will spend even more—about $190 billion a year—paying for the health consequences of obesity. For employers struggling to rein in health-care costs, that’s a good reason to support the push to raise fast-food wages. Even if higher pay doesn’t prompt those workers to spend more in other areas, higher menu prices could encourage them to make better food choices.

Of all the reasons why a third of U.S. adults are obese, the lure of cheap, unhealthy food ranks near the top. At least once a week, a new Gallup poll shows, half of Americans are likely to get just that when they eat at fast-food chains. Sure, customers could buy a salad or two, but the bulk of fast-food sales still comes from food that’s high in sodium, sugar, and fat. Americans know that: More than three-quarters of those polled by Gallup think the food isn’t good for them. The draw is that it’s convenient, cheap, and tastes good. With numerous studies linking obesity rates to the proximity, price, and growth of fast-food restaurants, giving people a pocketbook-based reason to eat somewhere else isn’t a bad thing.

Employers know firsthand the high cost of expanding waistlines, from heart disease and diabetes to reduced mobility and a greater risk of injury. It’s why so many companies now offer weight-loss programs and discounts on gym memberships. It explains why heavier people often have a harder time getting hired. Remember that Wal-Mart Stores (WMT) memo that looked at ways to attract a “healthier, more productive workforce” (PDF) to curb health costs?

As U.S. chains move beyond their saturated home market, they’re also making other people fat. Our greatest export, says Gallup’s Tom Rath, “is fast becoming diabesity,” or diabetes caused by obesity. That should worry everyone. In his new book, Eat Move Sleep, Rath points out that what people eat every day doesn’t just affect their weight but also has an immediate impact on productivity, mood, and judgment. Moreover, what their colleagues eat has a direct impact on their insurance premiums, taxes, health-care costs, and ability to make money. That’s why Rath argues that “improving health is the biggest business challenge for employers today.”

Higher prices on unhealthy food is just part of the puzzle. Creating a workplace that encourages people to make healthy choices for their families is another, as are efforts to boost health in local communities. The Centers for Disease Control and Prevention credits trends from higher breast-feeding rates to a greater variety of fresh produce in low-income neighborhoods for a drop in obesity rates among preschoolers.

Fast-food chains have raised their game with healthier menu offerings and support for programs that encourage physical activity, but they continue to thrive by selling high-calorie food. McDonald’s salads, introduced in 1987, make up just 2 percent to 3 percent of U.S. sales. Its heavily promoted Dollar Menu, dominated by tasty treats such as double burgers and cookies, takes in about five times that amount. The industry creates so many jobs because Americans eat too much of those tempting foods. When a bag of fries costs less than a piece of fruit, it’s hard to blame the consumer for buying it. And when a 40-hour week of flipping those fries still puts you below the federal poverty line, it’s hard to blame the worker for wanting more, too.

With Americans still loading up on cheap tacos, burgers, and fried chicken, others are paying the price. A few years ago public outrage was directed at the products. Remember Super Size Me, the documentary about eating only McDonald’s for a month? The threats of lawsuits? The eye-popping calorie counts suddenly showing up on menus? Several years later, we now have salads that are tough to sell, workers who can’t support their families, and stories that say junk food can end obesity. Even those outside the industry can see that doesn’t add up.

Brady_190
Brady is a senior editor for Bloomberg Businessweek in New York.

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