UnHappyMeal: €1bn Tax Avoidance on the Menu at McDonald’s
We are a group of trade unions, European and global union federations which collectively represent over 30 million workers in 126 countries. We stand together to highlight two critical practices by transnational corporations (TNCs) which are damaging our societies: tax avoidance and social dumping. These phenomena are dragging our societies downwards in a context of politically motivated austerity. They are prevalent in the practices of the leading TNCs of the fast food sector. The global leader of this sector is the American giant McDonald’s, the second-largest private-sector employer in the world, employing 2 million people worldwide with a global turnover of €70 billion (2013)
Across the globe, tax avoidance - or “optimization of tax liability” as accountants call it - costs public budgets across the globe hundreds of billions of dollars each year and leads to severe cutbacks to public services. In Europe, TNCs such as McDonald’s aggressively manipulate their tax payments by funneling as much tax “liability” as possible to low-tax regimes such as Switzerland and Luxembourg. While public servants like nurses and social workers are being laid off, some 56,000 tax inspectors have been cut throughout the EU - at precisely the moment they are most needed to investigate companies like McDonald’s. Sometimes these tax avoidance schemes are legal, sometimes they are at the edge of legality, and at times possibly illegal. At all times they are unethical, putting shareholder concerns and corporate profits (as well as runaway CEO salaries) ahead of the interests of society as a whole.
McDonald’s goes to great lengths to portray itself as a vital provider of employment particularly to youth and other sectors of the workforce hit hardest by unemployment. Yet it receives massive subsidies from multiple layers of government to finance its workforce, effectively taking even more money from the very governments it deprives of as much tax revenue as possible. According to recently published research, McDonald’s tax stratagems have potentially cost EU governments over €1 billion in tax revenue between 2009 and 2013. Finally, the jobs McDonald’s touts as being the “foot in the door”, or providing “career ladders”, are all too often precarious, low-wage jobs with little prospect for steady employment or advancement. Out of 97,000 McDonald’s jobs in the UK, 93,000 are on “zero-hours contracts” – employment contracts that guarantee no hours to the employee, or stability of scheduling. Workers are reduced to relying on the manager’s whim for the chance to work. Even in countries where McDonald’s adopts the posture of a responsible employer, conditions often vary widely between corporate-managed stores (the minority of stores) and franchisees (the majority), where conditions might be far inferior. We stand together to call on governments, parliaments, the EU commission and civil society to shine a light on these practices and to hold corporate tax avoiders accountable. As a leader in its sector, McDonalds must take its responsibilities and lead the way towards positive change. It is time to begin a dialogue that results in deep reforms for TNCs to put an end to social dumping and pay their fair share of tax.