AUGUST 31, 2012
Earlier this summer—several eons ago in campaign time—the political story of the day was that Mitt Romney couldn’t identify a doughnut. Media outlets like BuzzFeed and Daily Kos ran with the story; it was minor and goofy and perpetuated the narrative of Romney as awkward and out of touch. But as a New Englander myself, I knew it was highly unlikely. Dunkin’ Donuts is, without a doubt, the surging, caffeinated lifeblood of Massachusetts. No way the former governor couldn’t recognize a doughnut.
In fact, there was another reason for Romney to be familiar with Dunkin’ Donuts: It’s arguably one of Bain Capital’s success stories (by their reckoning, anyway). And while Romney was gone from Bain Capital by the time it purchased this New England staple in 2005, his campaign has become a target for slighted employees who want higher wages, benefits, and better working conditions.
And these Dunkin’ employees are not alone. Dozens of workers from other Bain-owned companies across the country like Burlington Coat Factory, Baskin Robbins, and Toys ‘R’ Us joined a handful of Dunkin’ employees this week in Tampa at a rally to decry the dehumanizing impact of Bain-style capitalism. At a Dunkin’ employee pancake breakfast in Dorchester, Massachusetts this past Saturday, I spoke with a handful of these current and former Dunkin’ Donut employees who are wicked friggin’ pissed at Mitt—and ready to go tell him all about it.
IT BEING A Saturday, and early, I stop at the store by the St. Mary’s T-stop for a coffee and an old-fashioned doughnut on the way to the breakfast (it was, for the record, undeniably better than the one I had a few days prior in D.C.). By the time I transferred from the green to the red line, seven of the eight coffee drinkers I’d seen had been caffeinating with Dunkin’. If that wasn’t enough to reinforce how integral Dunkin’ is to New England culture, there are eight within a two mile radius of the Great Hall in Codman Square, which hosted the breakfast. If you expand the range to five miles, there are more than 50.
Starting at about 9 a.m., 150 people gathered in the Boston suburb’s old public library to eat pancakes (not doughnuts), but, more importantly, to air their grievances against Bain and their former governor, and to send their protest representatives off to Tampa. Fair or not, Bain (and by extension, Romney) has come to epitomize a certain kind of capitalism, and has thus become a focus for the criticism of what some call “predatory capitalism”: the rituals of saddling companies with debt to pay back the firm’s investment, extracting profits at the expense of workers’ benefits, and taking savage advantage of tax loopholes (all of which have all received due diligence in the press and in pro-Obama ads smothering the airwaves).
Admittedly, the timing is problematic, as a P.R. rep for Bain was happy to inform me: The company has cut itself loose from Dunkin’, having just sold off the last of its shares a matter of weeks ago (it went public in July 2011), completing the private equity cycle of life. After growing the stock price, while hanging the company with $1.25 billion in debt, Bain sold its stake in the company on August 15, making a tidy $600 million. But one of the event organizers insisted to me that Bain’s sale of its stake does nothing to diminish their critique of Bain’s brand of management.
When I arrive, I’ve just missed the blessing of the food by Bishop Filipe Teixeira, now chatting by the long table weighted with pancakes and coffee—which, I’m told, is from the Marketplace Café down the road, not purchased from the attendees’ employer. Upon arrival, I’m quickly introduced to the three women headed down to Tampa, two of whom just quit the company in protest of their poor treatment at the recently Bain-owned company.
The women cite unreliable hours, unpaid breaks, deteriorating working conditions, a lack of paid sick days, and expanding responsibilities without raises. Some of their arguments are tendentious. Bain isn’t entirely, or even mostly to blame for the slew of problems facing low-wage workers in the United States right now, though it’s become a symbol of those unsavory realities. In fact, according to Jim Coen, the president of the Dunkin’ Donuts Independent Franchise Owners Association, franchises faired better in the Bain era than they did under previous ownership.
But workers are feeling squeezed, and some of the changes that happened at Dunkin’ in the Bain era seemingly have made it even harder to scrape by. The workers I talked with claimed that their hours were cut after they got raises—Katrina Fitzpatrick, in her mid-forties, the oldestof the three workers heading to Tampa, mentioned that because she was earning two dollars above minimum wage when Bain took over, she became responsible for opening the store only to be sent home once a lower-paid replacement could take over later in the morning. She’d get up before four to take a cab to work (the buses weren’t running yet), then work for just three hours. When the company stopped reimbursing her for the ride in, she actually started losing money working the shift. She’d been part-time for the past 15 years, supplementing her income with other jobs; she finally decided to quit as the few perks she had were slowly eliminated, including a 401K discontinued in 2007.
The conversation about Bain, though, isn’t just about the finer points of the company’s management strategy. Yes, it’s partially about Romney’s legacy there and what that says about his leadership abilities, but intentionally or not, it has also become a vehicle for a larger conversation about the state of the American worker. Of the 50 largest employers of low-wage workers, 92 percent were profitable last year, and 75 percent have higher revenues than they did before the recession. Half of all low-wage workers are employed in the food services industry. And despite higher revenues, almost 60 percent of these jobs pay less than $10 per hour at a time when the purchasing power of today’s minimum wage is 30 percent lower than it was in 1968. And, if we zero in on Massachusetts, Fitzpatrick and co.’s gripes seem even more justified: Massachusetts has the eighth highest minimum wage in the country at eight dollars an hour (the federal minimum is $7.25), but that still means that a full-time worker only makes $16,640.
Obviously such statistics can’t be attributed to a single company. But by touting his record on job creation, Romney has opened the door to a closer critique of the type of jobs he’s created—which, these Dunkin’ employees feel, should be a bigger concern to Democrats than the jobs Romney may have outsourced. In a sense, this is a revival of the themes of the devastating SCM and AmPad ads that Ted Kennedy ran in his 1994 campaign against Romney, where workers described being laid off, then reapplying for their jobs with slashed benefits.
Simara Martinez, who was homeless and barely 20 when she started working at Dunkin’ a year ago and quit just days before leaving for Tampa last Saturday, explained that she knows the issues they’re protesting are structural ones—by her understanding, the franchises were under pressure to keep costs low, so the royalties extracted by Dunkin’ Brands (the corporate hub that owns the brand name) would be higher. In her view, it was this emphasis that led to issues like unpaid hours and other cost-cutting measures that made her job harder. But according to Coen’s account, the takeover by Bain in 2005 shouldn’t have impacted employees, as Dunkin’ Brands doesn’t dictate wages and benefits for its franchises—unlike companies like Starbucks, where all locations are owned by a central corporate structure. The franchises had been squeezed, however, by deals meant to increase corporate revenues and inflate stock prices—like selling DD coffee in supermarkets—but which hurt profits at the local stores. But the thrust of the critique pushed by the workers remains: More attention should be paid to the types of jobs they think a Romney economy would create, not just the jobs lost in Bain takeovers. It’s hard to outsource a job making coffee, but it’s easy to make that job a lot worse.
Bain Capital isn’t at the heart of what’s wrong with every minimum wage service job. In fact, on the list of its relative sins, its stewardship of Dunkin’ probably wouldn’t make the first page. But Romney’s rise has placed it, and the vision of capitalism that drives it, at the nexus of a conversation about what has happened to the American worker over the last 30 years. And if the criticism attached to that conversation makes the captains of private equity lose sleep, feeling unfairly maligned, well, that still beats the hell out of dragging yourself out of bed to open a Dunkin’ Donuts at 4 a.m.