Work isn't working

Families and firms are at war. It will only be won when parents - fathers as well as mothers - can c

The Sex War is over. Girls outperform boys at school and are streaming through higher edu cation. Young women are now taking home the same size wage packets as young men. But the celebrations have to wait. A new, tougher battle has to be fought. It is not a duel between men and women, but between families and firms. This family war will be won only when parents - fathers as well as mothers - can care for their children without dumbing down their careers.

Women now compete with men on a virtually equal footing in both business and politics - but only until the precise moment they become mothers. It is not a question of old-fashioned notions about their capabilities. "Women don't lose out because of outdated views about them as women," says Mary Gregory, an economics lecturer at Oxford University and expert on gender and work. "They lose out because they make different choices about work when they have children." It is not possession of a womb that now holds women back, but its use.

This is fertile political ground, and the Conservatives are beginning to move on to it. David Cameron has proposed that maternity leave should be made transferable, allowing mums and dads to tag-team the childcare, or even take time off together. It is a modest proposal, not least because fathers will only be paid £112 a week (the current statutory maternity pay rate). Labour's John Hutton retorted that few families would be able to afford to make use of such a right. This is true: but why deny those people the possibility?

It is lack of choice that is now the issue. Legislation aimed at tackling direct discrimination, most importantly the Equal Pay Act, has helped to bring about a sea change in employer attitudes and pay scales. Barbara Castle, author and advocate of the Equal Pay Act, must sit beside Keir Hardie, Clement Attlee and Nye Bevan in the Labour pantheon. The latest research from the TUC shows that the gap between the full-time earnings of men and women in their twenties is only 3 per cent. Even this small gap is explained entirely by the very large salaries of a handful of men at the top of the income distribution, which pull up the male average, and the unwillingness of women to pitch for more money. As Gregory suggests, "Women don't ask."

But the good news comes to an end at 30, the age at which the typical married woman has her first child. Children strike women's careers like a meteorite, while glancing almost imperceptibly off fathers' working lives. The pay gap for thirtysomethings is 11 per cent; women in their forties earn 23 per cent less. The picture gets even worse when part-timers are brought into the picture. Female part-timers in their thirties and forties earn only two-thirds as much an hour as male full-timers of the same age. It is motherhood, rather than misogyny, that explains the pay gap. As Gillian Paull from the Institute for Fiscal Studies writes in the latest issue of the Economic Journal: "The 'family gap' in employment and wages - that is, the differences in work behaviour between women without children and mothers - may be more important than the gender gap alone." Meanwhile, men's working hours go up slightly when they become fathers: and dads do better in terms of wages than childless men.

Direct discrimination is no longer the prin cipal enemy. Three structural problems explain the pay gap. First, women and men work in different occupations, with women clustered in less well-paid sectors such as teaching, retail and health care. This occupational segregation has hardly diminished over the past few decades. Second, the significant increase in general wage inequality has had the unfortunate side effect of making the gap between men and women bigger. Third, the penalty paid by women for working part-time after having children has become much more severe, as a high proportion slide down the occupational ladder in what the erstwhile Equal Opportunities Commission termed a "hidden brain drain".

Campaigners for gender equality hope that the Single Equality Act, scheduled for inclusion in this year's Queen's Speech, will force companies to conduct equal-pay audits. It is in fact a forlorn hope, but they should not be too disappointed. As Barbara Petrongolo, a labour specialist at the LSE, says: "Equal treatment policies like equality audits will not have much bite. The problem is not that employers are paying women less for doing the same jobs as men - it is that women are doing different jobs after having children."

Occupational downgrading

A slew of recent studies has dissected the complex data on motherhood and part-time employment. The conclusions highlight the real problems facing British families, and the failure of the labour market to deliver real choice. Most mothers work part-time for some years in order to balance raising their children with staying in the labour market: only a third of mothers with pre-school-age children are in full-time work. A substantial minority - around a quarter - of these end up in a lower-status job: managers become clerical workers. Some professions, such as nursing and teaching, offer most women the chance to go part-time without loss of status or hourly pay. And those women who stay with their current employer are less likely to suffer "occupational downgrading". As Gregory and her co-author Sara Connolly lament: "This loss of career status with part-time work is a stark failure among otherwise encouraging trends for women's advancement."

It is important to be clear what the problem is. Is it bad news that women want to spend time with their children? Surely not, given the evidence for the importance of parental engagement in the early years of a child's life. Are these women "forced" into part-time work, and now just grinning and bearing it? No - the overwhelming majority say they positively chose part-time work, and their job satisfaction is higher than that of mothers working full-time. Most men and women, according to the British Social Attitudes Survey, think that a conventional division of labour is the right one, with mothers taking on the bulk of responsibility for childcare.

We may wish to change these attitudes, but equally we must respect them. The TUC, for example, struggles to take women's choices at face value, declaring: "Women take on a disproportionate share of caring responsibilities due to unequal pay and limited opportunities within the workplace." This presupposes a level of responsiveness to economic incentives that would make Milton Friedman proud. Like it or not, women are doing most of the caring because they see it as part of their role in life. Groundbreaking work by the American economists Rachel Kranton and George Akerlof suggests that being a mother is part of women's identity, and that this explains their otherwise irrational labour-market decisions.

Perhaps the problem is an economic one - the loss of productivity as a result of the underuse of women's skills? This is the argument adopted by many who are urging more government action, but it is a fragile one. The latest TUC report, Closing the Gender Pay Gap, estimates that £11bn a year is being lost. The Women and Work Commission puts the figure at between £15bn and £23bn. A strange, unholy alliance has in fact developed between old-fashioned feminists, who insist women ought to work full-time to gain economic parity with men, and Treasury economists, who worry about the apparently "irrational" squandering of "human capital" by educated women. The principal difference between these allies is that the feminists want to spend billions of pounds of public money on childcare to allow more women to work full-time - the "Swedish option", at which the mandarins generally baulk.

There are, however, grave dangers in relying on economic arguments. For a start, such estimates are notoriously difficult to generate and are open to subjective manipulation (another recent study even found that £5bn is lost each year as a result of bosses' failure to say "thank you" to their staff, which suggests there are easier ways to boost productivity). And even if there really is an economic cost, there may well be a counterbalancing social gain in better-quality family life and happier children.

"Cost" of legislation

Overall, welfare might be greater even if our GDP - the size of which is a source of constant anxiety to male politicians - is somewhat smaller. Employers and their representative bodies are also just as adept at producing studies showing the apparent "cost" of any legislation to help working families - whether it is to introduce a minimum wage, equal pay, better maternity leave or better rights for temporary staff. Equality then becomes a battle of numbers, each side wielding its own semi-fictional cost-benefit analysis. Once we start putting a price tag on equality, we have lost sight of its value.

The problem is not a dent in economic output. The problem is not that mothers reject a life as what the sociologist Heather Hopfl has called that of a "quasi-man". The problem is lack of choice, for women and men alike. Millions of women do not have the option of reducing their hours as well as maintaining their status. And very few men have the option of sharing the childcare responsibilities with their partner. Liberal societies should aim to offer individuals the maximum range of options from which to construct their version of a good life.

"The heart of the choice issue is limited opportunities for women to work part-time in high-quality jobs," says Petrongolo. Gregory agrees: "The crunch question is this - can part-time women continue at the same level?" The one area of dissatisfaction expressed by women working part-time is with their wages. That is not surprising.

Employers are reluctant to retain or hire senior part-timers. While 60 per cent of employers say they would allow a woman returning from maternity leave to switch to part-time status, of these only two-thirds would allow her to remain at the same level of seniority. So, less than half would permit a reduction in hours without loss of status. This may not just be the result of Jurassic attitudes, as Gregory admits: "We can't assume that employers are simply stupid." Assuming it costs as much to hire and train part-timers as full-timers, they will offer a lower return on investment. There may also be co-ordination costs, especially associated with part-time or job-sharing managers. But it is hard to know the true height of these barriers.

Since 2003, employees have had a "right to request" flexible working while firms have had a corresponding duty to take such requests seriously. Some one-off surveys suggest that since the law came into force, one in seven women have made a request, and that most have been accepted. But the Labour Force Survey - the main data source on workplace trends - shows no increase in levels of part-time work over the same period. This puzzles economists. The most likely explanation is that a similar number of requests was being made and granted even before the legislation, and that the law has made little difference. It also looks as if women are asking for part-time work in the sectors where they are most likely to be granted, such as nursing, rather than in the senior and professional jobs where the real problem lies.

Part-timer fathers

It is clear that British families do not want to outsource the raising of their children to others, and prefer to combine paid work and care. At the moment, this means mums, but in the future it could mean dads, too. The model we should be emulating is Holland, where workers have the right to convert a full-time job to a part-time one unless the employer can produce convincing evidence for damage to the firm. "We need to shift the burden of proof from the employee to the employer," insists Gregory. We need to go Dutch, and remove the words "to request" from the right to request flexible working.

It is possible that without the risk of occupational downsliding, more men may also choose to work part-time; but it is also necessary to give men the same freedom as women to take time off for childcare as women. Cameron's idea of transferability is a step in the right direction: it is high time the government stopped deciding for us which parent should raise our children.

Markets are usually good at offering choice, but at present the labour market is failing the family. Companies are not generally acting on the basis of a rigorous business case against senior part-timers. They are exhibiting what psychologists call "path dependency": doing what they do because that's what they've always done. A decisive legislative strike on the Dutch model could jolt them on to a fairer path. Rather than aiming at creating economy-friendly families, it is time to shape a family-friendly economy.

This is the kind of package Labour MPs used to advocate. Indeed, the Commission on Social Justice - under the influence of its deputy chair Patricia Hewitt - proposed just such a move back in 1994. But, in a battle between families and firms, Labour now leans towards the latter. Gordon Brown loves to praise "hard-working families". What families need now is for him to work harder for them.

Working parenthood: by numbers

1/3 of mothers, and one-fifth of fathers, use some form of flexible working pattern

£7,000 average cost of taking a full 12 months off work after the birth of a child

83% proportion of women who want to return to work after having children

1 in 3 proportion of female corporate managers who lose status after having children

94% of all new fathers take some time off after the birth to care for their children

90% of mothers take at least six months' leave

39 number of weeks women are entitled to statutory maternity pay at 90% or less of weekly earnings

2 number of weeks men are entitled to paternity leave (pay negotiable)

Research: Simon Rudd

This article first appeared in the 24 March 2008 issue of the New Statesman, The truth about Tibet

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The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.