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D&T.com: McDonalds’ suggested budget for employees shows just how impossible it is to get by on minimum wage


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McDonalds’ suggested budget for employees shows just how impossible it is to get by on minimum wage
By Robyn Pennacchia 19 hours ago

McDonald’s has partnered with Visa to make a website dedicated to showing its employees how to properly budget their meager peasant salaries. However, what it actually does is illustrate the fact that it is nearly impossible to get by on minimum wage, as shown in this “example” budget chart:

Screen-shot-2013-07-15-at-9.29.08-AM.png

Yeah– now, when I first saw that, I assumed that the top line was for a part-time McDonald’s employee. Then I got out my calculator– that is actually what you would make if you were working full-time at McDonald’s. 1,105 dollars a month.
Now let’s say that the “second” job that they budget in here (feels like cheating, but OK) is also minimum wage. That would mean you were working about 62 hours a week, on average. Oh, wait. That’s if they live in Illinois where the minimum wage is $8.25. The national minimum wage is $7.25. That translates to 74 hours a week. That’s almost a whole other full time job.
And what do you get for working 74 hours a week? Well, you don’t get heat, clearly. There’s a big ol’ zero next to the heat in that chart. In my building– we have separate checks for gas and electric– that would mean that not only do you not get to heat and cool your home, but also that you do not get to heat your water, or cook on your stove, if you have a gas stove (I do).
Also noticeably absent in this budget? Food. And gas. There’s a line for a car payment, but not for gas. Which is suspect, because if you’re working two jobs it’s possible you will pay more for your gas than you’d be paying for your car.
Also… health insurance for $20 a month? There is really no such thing as health insurance for $20 a month if you’re buying your health insurance on your own. I think the least amount is going to be about $215 a month– and that only covers hospital emergencies.
The minimum wage in this country is reprehensible. If the minimum wage had kept up with inflation it would be over $10 an hour. If it had kept up with productivity? It would be $21.72.

min-wage1-fig2-2012-03.jpg

Right now, we have people in our government saying that we shouldn’t even have a minimum wage. That employers should be free to pay people whatever they can get someone to agree to work for. If they can get someone to work for $3 an hour, then it should be allowed.
There are people who comfort themselves by telling themselves that poor people are only poor because poor people are lazy. Pretty sure someone who works 74 hours a week isn’t lazy.
You may think that most of these minimum wage earners are teenagers. Well, 87.9% of minimum wage earners are over the age of 20. 28% of those people are parents trying to raise a kid on this budget. That is not a good thing for our future and it is not a good thing for our economy. In order for the economy to thrive, people have to be able to buy things. All the money going to people at the top does not help us.
I don’t want to live in any kind of dog-eat-dog Ayn Rand erotic fantasy. Human beings are worth more than that. Anyone who works 40 hours a week (nevermind 74 hours) ought be able to take care of all the basic necessities in life.Corporations shouldn’t be able to pay their workers nothing, keep all of the profits to themselves, and expect taxpayers to make up the difference with social programs. It’s not fair to the workers, and it’s not fair to any of us.

McDonalds’ suggested budget for employees shows just how impossible it is to get by on minimum wage | Death and Taxes
http://www.deathandtaxesmag.com/2021...-minimum-wage/

I couldnt agree with the part in bold enough. That is exactly what is happening.

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What would be appropriate in your opinion?

 

Do the corporations have a responsibility to there shareholders as well as their employees?

 

They have a responsibility to both, not more to one at the sacrifice of the other. Shareholders are getting value with increasing profit, but does that mean the profit gain has to be so high that it sacrifices the well-being of the workers? No, it doesn't. Costco does very well with profits and pays its employees a healthy living wage. You want to sit there and tell me McDonald's, a billion dollar industry, can't come up with a modified business model that pays employees a decent salary? It's one thing if the company is barely skating by so it lays off employees or only has part-time employees, or doesn't have the highest wages in town. It's another when it is the world's largest food chain. 

 

Just because a job is menial or low responsibility doesn't mean the employee shouldn't be making enough to reasonably live on. The article is dead on that these companies that refuse to cut into massive profits to improve the well-being of their employees are essentially passing the buck on to the government and its social programs.

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News flash: It is really tough to support yourself working at McDonald's.

 

Yes, but someone has to work there. McDonald's needs employees. It should start acting like it.

 

I wonder how many people who view McDonald's as menial, not challenging, and thus not deserving of better salaries for its employees, are sitting in their cubicles doing menial work themselves that isn't challenging, that anybody can do, taking for granted they don't have to do a bunch of manual labor or put up with customer BS all day long and their disrespect, making a good living wage, while their company posts quarterly profits that McDonald's would crap itself it posted something so low.

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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

I like your point. But is there a limit? Let's say he starts doing very well for himself—could you see a point where the wage disparity is perverse? Like buying himself a third boat or giving every employee a 50 cent raise per hour. It's certainly up to the individual. But, a God-fearing enterprise like Chik-Fil-A should probably concern itself with the welfare of it's employees.  

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I had that exact budget just 6 years ago for roughly 4 years.

I have no shame! So here's the breakdown:

 

Monthly Net Income:

1st Job:  $1,800

2nd Job:  $0

Monthly Net Income Total: $1,800

 

Expenses:

Savings: $0

Mortgage:  $650

Vehicle Payment: $405

Vehicle Insurance: $60

Heat/AC (attached to Electric Bill): $90

Health Insurance (provided by employer. $350/month value):  $0 

Cable/Internet/Phone: $110

Cell Phone: $65

ADT: $45

 

Monthly Expenses Total: $1,425

 

Monthly Spending Money: $375

(for gas, food, leisure, etc)

 

I somehow made it work. lol!  And I got a lot back in tax returns b/c I owned my townhouse.

I did not work 40 hours a week.  Maybe 30-35.

I lived in a high crime area. but it was a block from work so I had no gasoline bill (bought gas once a month, maybe, and usually no more than a 1/4-1/2 a tank out of fear that someone would syphon the gas).  The ghetto area I lived in was so close to beautiful downtown Annapolis, MD I didn't care about the crime.

 

I've since changes things.  Marriage, working more and for more money, new responsibilities...

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Agree with Kilmer that having one business decide, out of the goodness of it's heart, to hand out raises. (And what raise would be "enough"? He'd have to double wages, just to allow the person in the budget to stop his second job.)

I think a completely different question would be "would it be better for society, as a whole, if the minimum wage, for everybody, went up?"

I think that the answer is rather clearly "yes". And I think I've got some reasoning to support that opinion. But I freely agree that it's just an opinion, and no doubt other people will have different ones.

(It's even possible that some of them won't be idiots.)

But, that's not the question being discussed.
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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

I like your point. But is there a limit? Let's say he starts doing very well for himself—could you see a point where the wage disparity is perverse? Like buying himself a third boat or giving every employee a 50 cent raise per hour. It's certainly up to the individual. But, a God-fearing enterprise like Chik-Fil-A should probably concern itself with the welfare of it's employees.  

I think the bigger issue is the idea of a "living wage" is a variable number, and probably one that can never be met.  So even if he gave everyone a 1.00 an hour raise, or 5 an hour raise, there will always be cries that he could do more. 

 

But as long as there are people willing to work for less, why should he?

 

Why should he pay more than what the market will be

What benefit is it for him?

Stronger country/society to live in? Probably a lower crime rate. those two are just off the to of my head though.

Are there statistics to back that point?  I dont see how raising the wages of the lowest rung of workers a few bucks makes them less likely to commit the crimes they are committing.  I dont think these are people stealing loaves of bread to feed their starving families. 

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Agree with Kilmer that having one business decide, out of the goodness of it's heart, to hand out raises. (And what raise would be "enough"? He'd have to double wages, just to allow the person in the budget to stop his second job.)

I think a completely different question would be "would it be better for society, as a whole, if the minimum wage, for everybody, went up?"

I think that the answer is rather clearly "yes". And I think I've got some reasoning to support that opinion. But I freely agree that it's just an opinion, and no doubt other people will have different ones.

(It's even possible that some of them won't be idiots.)

But, that's not the question being discussed.

I think it would be great if the minimum wage could be 30 bucks an hour (I'd have a problem with the Govt dictating it, but that's a different argument).  However, people wont like how much their big mac and aeropastal shirts will cost.

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Are there statistics to back that point?  I dont see how raising the wages of the lowest rung of workers a few bucks makes them less likely to commit the crimes they are committing.  I dont think these are people stealing loaves of bread to feed their starving families.

Well, there's certainly a correlation between income level and crime.

"Correlation does not equal causation", but, still, it's at least a hint.

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Are there statistics to back that point?  I dont see how raising the wages of the lowest rung of workers a few bucks makes them less likely to commit the crimes they are committing.  I dont think these are people stealing loaves of bread to feed their starving families.

Well, there's certainly a correlation between income level and crime.

"Correlation does not equal causation", but, still, it's at least a hint.

Right.  I think those more likely to commit a crime are the ones working the low end jobs,  I dont believe the jobs are the cause of them committing the crimes.

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I think it would be great if the minimum wage could be 30 bucks an hour (I'd have a problem with the Govt dictating it, but that's a different argument).  However, people wont like how much their big mac and aeropastal shirts will cost.

 

Oh, I certainly think that it's a given that increasing the minimum wage will result in inflation.

I also think it's a given that said inflation won't be the huge amounts that people often claim (without any support whatsoever), every time the subject comes up. (Like the folks claiming that, if minimum wage goes up 100%, then the price of a Big Mac will go up 300%.)

In short, I think I can pretty much prove that if Min Wage were to go up, say, 100%, then there'd be inflation, but it would be less than 100%. The purchasing power of the Min Wage worker would go up. (It won;t double. Not even close. But it will go up at least a little.)

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When I see things like this I can't help but feel like the number of people playing the game is growing but the amount of money available for them to play with has not, or has shrank.  If the min wage is raised to a level that makes sense for any full time employee the costs increases and subsequent job losses will have a massive impact on the economy and the lives of everyone in the middle and lower class.  Let's remember that it's already virtually impossible to have kids and have one parent stay at home.  The number of people that can afford to do this is small and IIRC it continues to shrink.  Americans already take less vacations and time off than any advanced nation.  The effect on families cause by the last two is likely something historians will debate with one side arguing it was bad and the other arguing it was worse.  

 

So at what point does this game reach its tipping point?  Is it when the kids are forced to work so that the lights stay on for nearly half the population?  Maybe it's when we redefine the work day as 12 hours a day and are taught to think that a 2 day weekend is something for lazy europeans.  

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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

That's impressive - something you see very rarely within Chick-Fil-A - owning more than 1.  I can't think of any that I have seen or dealt with that own more than 2 and even that's rare. 

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Are there statistics to back that point?  I dont see how raising the wages of the lowest rung of workers a few bucks makes them less likely to commit the crimes they are committing.  I dont think these are people stealing loaves of bread to feed their starving families.

Well, there's certainly a correlation between income level and crime.

"Correlation does not equal causation", but, still, it's at least a hint.

Agree - you can also add education level to that list.  Wouldn't say those specific things equal causation but the paint a better picture of the individuals roots/bringing up.

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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

That's impressive - something you see very rarely within Chick-Fil-A - owning more than 1.  I can't think of any that I have seen or dealt with that own more than 2 and even that's rare. 

Really?  I would figure that's as normal as other FF places.  In fact, I cant imagine trying to make it in that business without owning multiple locations.

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McDonalds are mostly franchises.  So their wages are set by local ownerships, not by a Corporate dept.

 

They pay a franchise fee to McDonalds that doesnt fluctuate based on what they are paying in hourly wages.  So any extra money paid to the workers, is money out of the owners pockets.

 

I have a friend who is about to open his 3rd Chick Fil A here in FLA, he bought the 1st about 10 years ago,   He's making a very good living.   But not absurd living.  Why should he pay more than what the market will bear for employees?  What benefit is it for him?   Should he raise the price of a chicken sandwhich to pay the extra wages?  Or take the loss off of his own income?

That's impressive - something you see very rarely within Chick-Fil-A - owning more than 1.  I can't think of any that I have seen or dealt with that own more than 2 and even that's rare. 

Really?  I would figure that's as normal as other FF places.  In fact, I cant imagine trying to make it in that business without owning multiple locations.

Yeah, it's pretty unusual with how they setup and operate.  The development is all done by corporate but they transition to individual operators/owners.  I think corporate has a say in the number and that is also probably why the quality of service seems to be higher (at least in my experience) as the owner/operator doesn't have to deal with a string of franchises and can focus on minimal locations which will maximize the operations.

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The funny part of that is that McD's doesn't offer health insurance for $20 a month. The cheapest they offer it for the average worker (the who is making that small hourly wage) is for $12.58 a week. And that's if and only if they have been working there for more than a year, otherwise its $14 a week.

 

http://finance.yahoo.com/news/mcdonalds-cant-figure-workers-survive-153900349.html

 

So I'm still trying to figure out what the point of that exercise was if they were taking such liberties with the budget costs.

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