It’s hard to comprehend how perverse, broken, unfair and short-sighted, business practices at publicly traded corporations have become over the past few years. Evidence is everywhere we look. By extracting everything in the name of corporate profits, we are left with social, economic and environmental wreckage far and wide. In the timeless words of Dr Suess’s Lorax, unless we consumers and voters demand change, “Nothing is going to get better. It’s not.”
The struggling corporate giant behind The Olive Garden, Longhorn Steakhouse, and other national restaurant chains is forcing tens of thousands of workers to effectively pay rent on their own money.
Workers at Darden Restaurants chains are routinely told they must accept prepaid debit cards instead of paychecks, according to a new report from the worker organization Restaurant Opportunities Center (ROC) United. A quarter of workers surveyed said they asked to be paid some other way and were told the cards are their only option.
The practice helps the company, which came under intense pressure to cut costs from dissatisfied investors a couple years back. But it puts an expensive barrier between workers and their money.
The restaurant conglomerate has roughly 148,000 employees in the U.S. Half of those workers get payroll cards in lieu of standard paper checks. Each card shaves about $2.75 per pay period off of the company’s overhead, saving Darden as much as $5 million per year.
Darden’s bottom-line bliss means pain and chaos for those 70,000-plus workers. The cards come with a litany of fees: 99 cents for using it to pay utility bills, 50 cents if the card is declined at a cash register, $1.75 to withdraw money from an out-of-network ATM and 75 cents just to check the card’s balance. If a worker loses her card, she’ll pay $10 to have it replaced.
As Darden cuts its administrative costs, the banks that provide the cards rack up significant income on the back end. Federal Reserve Bank of Philadelphia researchers put median bank earnings at $1.75 per card per month back in 2012.