McDonald’s decision to drop its resistance to an increase in the federal minimum wage isn’t the first time the industry’s Goliath has broken ranks with the rest of the restaurant industry on the nationwide pay rate. Last time, the wage wasn’t increased, and the industry found itself with a new hero.
In the mid-1980s, when the chain was led by Ray Kroc associate Fred Turner, executives were asked by the media about a proposal then under consideration in Congress to raise the pay floor from the prevailing level of $3.35 an hour. The suggested increases ranged from a dime to 75 cents.
One McDonald’s official made the offhand remark that an increase in the wage would not be a wallop because the chain was paying more than the mandated rate in most markets. The sound bite attributed to the chain in the next day’s paper was “No big deal.”
Enter the then-unknown president of Godfather’s Pizza, who was asked at the last minute to fill in at a major industry conference for Kyle Craig, a much more prominent industry figure at the time who also worked for Pillsbury Corp. (Godfather’s, Burger King, Steak and Ale and Bennigan’s, among others, were all owned by the food processor at the time). Herman Cain had graciously agreed to pinch hit for Craig, days after McDonald’s had aired its position, in a session whose focus has been lost to history.
It proved to be academic. Cain took the podium and explained to the audience that he felt compelled to address what McDonald’s officials had said about a wage hike. “I wouldn’t say it’s ‘no big deal,’” he said, using the forceful oratorical delivery that would lead him to be nicknamed The Herminator. “I’d say it’s a huge f------ deal.”
The audience was shocked into silence for a moment, but then erupted into applause. Cain’s notoriety and reputation as a firebrand would grow from there, leading to his appointment as CEO of the National Restaurant Association and a run for the Republican Party’s presidential nomination in 2012.
At the time, the House of Representatives was controlled by Democrats, the Senate was led by Republicans and a Republican was in the White House—an exact parallel to the current day. The federal minimum wage would remain at $3.35 until 1991, when it rose to $3.80 an hour.