America's Hamburger Helper

When the smoke cleared after mobs burned through South Central Los Angeles in April, hundreds of businesses, many of them black owned, had been destroyed. Yet not a single McDonald's restaurant had been torched. Within hours after the curfew was lifted, all South Central's Golden Arches were back up and running, feeding fire fighters, police and National Guard troops as well as burned-out citizens. The St. Thomas Aquinas Elementary School, with 300 hungry students and no utilities, called for lunches and got them free -- with delivery to boot.

For Edward H. Rensi, president and ceo of McDonald's U.S.A., the explanation of what happened, or didn't happen, in South Central L.A. was simple: "Our businesses there are owned by African-American entrepreneurs who hired African-American managers who hired African-American employees who served everybody in the community, whether they be Korean, African American or Caucasian."

The $19-billion-a-year company has often been the target of those who disparage everything from its entry-level wage structure to the aesthetic blight of its cookie-cutter proliferation. But the Los Angeles experience was vindication of enlightened social policies begun more than three decades ago. The late Ray Kroc, a crusty but imaginative salesman who forged the chain in 1955, insisted that both franchise buyers and company executives get involved in community affairs. "If you are going to take money out of a community, give something back," Kroc enjoined. "It's only good business."

As a result, McDonald's stands out not only as one of the more socially responsible companies in America but also as one of the nation's few truly effective social engineers. Both its franchise operators, who own 83% of all McDonald's restaurants, and company officials sit on boards of local and national minority service organizations, allowing the company to claim that its total involvement in everything from the Urban League and the n.a.a.c.p. to the U.S. Hispanic Chamber of Commerce may constitute the biggest volunteer program of any business in the nation.

Because their original prosperity came from hamburger stands in middle-class suburbs, McDonald's managers were at first reluctant to move into inner-city markets. But company executives say their first tentative steps in the '70s showed those fears to be unfounded. The policy practiced in the suburbs, which dictated that McDonald's stores reflect the communities in which they operate, was applied to the new urban markets. As a result, nearly 70% of McDonald's restaurant management and 25% of the company's executives are minorities and women, and so are about half its corporate department heads. This year McDonald's will nearly double its purchases from companies that are minority or female owned, from last year's $157 million to $300 million. Several of the biggest are owned and operated by former McDonald's managers or franchise holders.

The spawning ground for many of the new ideas and programs designed to integrate the franchises into neighborhoods in which they operate has been the company's moral and intellectual McCenter, Hamburger University, set in its own 80-acre nature preserve near Oak Brook, Ill. Since 1979 the company has held affirmative-action seminars for its executives and managers there, as well as in many of the company's 40 regional offices, on such topics as how to manage the changing work force and handle career development for women, blacks and Hispanics. Each year 3,000 employees complete affirmative-action training programs that last 1 1/2 to 3 days. Ideas originated at headquarters and by individual franchisees have led to programs such as McJobs, which takes on mentally and physically impaired employees, and McPride, which keeps students in school and rewards them for academic achievement while they work.

Through a program devised by its store owners, the company has helped establish 153 Ronald McDonald Houses, named for the chain's trademark clown, where families of seriously ill children can stay while the child is undergoing extensive medical treatment, such as chemotherapy or bone-marrow transplants. Each house serves an average of 15 families who pay from $5 to $15 a night, if they can afford it. The local projects are supported by local fund drives, and all the money collected goes directly to the houses; McDonald's pays all administrative costs of the program, which extends to Canada, France, Germany, Holland, Australia and New Zealand.

But McDonald's broadest impact has been through its basic job-training system. Its 8,800 U.S. restaurants (there are an additional 3,600 overseas from Beijing to Belgrade) train American youth of every ethnic hue. "Sending a kid to the Army used to be the standard way to teach kids values, discipline, respect for authority, to be a member of a team, get to work on time, brush your teeth, comb your hair, clean your fingernails," says Ed Rensi. "Now, somehow, McDonald's has become the new entry-level job-training institution in America. We find ourselves doing things in that role that we would never imagine we would do." Among them: paying kids to study, rewarding them for staying in school, hiring physically and mentally handicapped youngsters and adults and giving sensitivity training to co-workers. In a program called McMasters, older people, usually retirees, are hired to work alongside young crew members to give the workplace a sense of family and to set an example of caring, courtesy and responsibility.

In conjunction with the vocational-rehabilitation services of several states, nearly 7,000 disabled and handicapped people have been trained to function as full McDonald's employees by job coaches drawn from within the company. Before these less fortunate employees take their places, company trainers often put young able-bodied workers in blindfolds, gloves or dark glasses to demonstrate the kind of handicaps their new colleagues have to deal with in doing the same jobs.

At Pat Newbury's McDonald's restaurant in Renton, Wash., some young employees earn an hour's pay not for flipping burgers but for studying an hour before their work shift begins. In a Chicago-area restaurant, Hispanic teenagers are being tutored in English. In Tulsa, a McDonald's crew is studying algebra after work. At a Honolulu restaurant, student workers get an extra hour's pay to study for an hour after closing. In Colorado, Virginia and Massachusetts there are Stay in School programs offering bonus money for employees who receive good grades. Reading-improvement classes frequently take place at restaurants in Kansas and New Jersey.

Despite the initial skepticism of educators, McDonald's programs have managed to allay the fears of many that work and school could not mix. In February the National Association of Secondary School Principals passed a resolution commending the company for "exemplary and motivational efforts to support education, students and assistant principals."

- Bob Charles, the owner of a McDonald's in Boulder, has seen some of his employed at-risk students begin to get A's after joining his McPride program, which limits them to a 14-hour workweek and pays bonuses for improvement and school attendance. Many of them have a very low level of self-esteem, says Charles. But once they come to work as part of a team and gain a sense of confidence, "you'd almost never believe the change in these kids."

Mark Brownstein's company owns 13 restaurants in Orange County, Calif., and hires elderly and handicapped workers aggressively. "They are people who need work, and we need people to work. You wonder why everybody makes a big deal about it," shrugs Brownstein. "Besides, the seniors and the special-ed kids in our stores create a sense of humanity." Owner Jonah Kaufman has 26 handicapped people, mainly with Down syndrome, on the payroll in his 12 Long Island stores. One of them, Joe King, trains new employees. Kaufman says the key to his success with the disabled is "to try not to treat them differently." McDonald's has used Braille and its own kind of sign language as aids for impaired employees. At McDonald's Oak Brook headquarters, staff workers are sought from specialized schools, such as Gallaudet University and the Rochester Institute for Technology, which has an educational center for the deaf.

Senior vice president Robert H. Beavers Jr., who gave up plans to become an electrical engineer 19 years ago to stay with McDonald's, says the company's socially minded business practices have made the company stronger: "Our energy level and our understanding of the market today are much better because of the cultural diversity we have." He points out that in the inner city, where he grew up, they say, "If you talk the talk, you better walk the walk."

In Los Angeles, they talked and they walked -- and they didn't burn. So Rensi and his team intend to keep on keeping on. After all, it's only good business.