In 2005, Florida tomato pickers gained their first significant pay raise since the late 1970s when Taco Bell ended a consumer boycott by agreeing to pay an extra penny per pound for its tomatoes, with the extra cent going directly to the farm workers. Last April, McDonald's agreed to a similar arrangement, increasing the wages of its tomato pickers to about 77 cents per bucket. But Burger King, whose headquarters are in Florida, has adamantly refused to pay the extra penny - and its refusal has encouraged tomato growers to cancel the deals already struck with Taco Bell and McDonald's.
When I read this some things popped out at me. Why fight this much for the extra penny, especially if all your major competitors would also pay that penny? And why would Burger King object to its competitors paying more for the same commodity they purchase? The one answer that I kept coming back to was that to pay that extra penny is to legitimize the consumer boycott that forced the buyers to pay that extra penny.
It is interesting to note that the workers didn’t strike. They didn’t sue. They didn’t form a union. They didn’t go begging for public money. They instead went to the market and used market forces to persuade the companies. And it worked. Perhaps too well.
To stretch the metaphor, the Burger King is not going to accept the terms of an economic Magna Carta from the Tomato Serfs without a fight.