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

[steve09ru]

A lot of franchises are scaling back hours of full-time and replacing them with a lot of part-time:

 

http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html?KEYWORDS=Restaurant+Shift%3A+Sorry+Just+Part-Time

White Castle slowed their expansion plans:

 

http://online.wsj.com/article/SB10001424127887323687604578467131472052160.html?mod=WSJ_SmallBusiness_LEFTTopStories

This is a good story though regarding healthcare offerings and turnover

http://www.timesfreepress.com/news/2012/dec/25/benefits-cut-turnover-chattanooga-steak-n-shake/

 

[Kilmer17]

20 years ago I took my first job out of college and it paid 19k a year appx. 

 

And it was a 55-60 hour a week job.

 

 

And I was able to make it work. 

 

I didnt own a house, I had roommates, ate ramen, drank cheap beer.  And had a blast.  And worked toward a better life, job, promotion etc.

[The Evil Genius]

20 years ago it cost you less than $20 to fill up the car too. 

 

The above salary translates to 16k a year, if anyone is interested. Of course, that also doesn't take into effect the majority of higher costs for just about everything else vs. what they cost 20 years ago.

 

[War Paint]

I think it's a sign of the times and a crummy economy.  I worked at McDonalds when I was a 16 year old high school student.  All of my co-workers were in high school.  The only adult workers there were management.   Many years later, when I walk into the same McDonalds I worked at, most of the workers are adults.  There is a 40 year old man making burgers instead of a 16 year old kid. 

 

Min. wage jobs weren't meant to be jobs to support families and such.  They were meant to introduce kids to the work force and provide students with some spending cash.  Now, with such a bad economy, many adults have to fall back on jobs like this in desperate times.  With all the outsourcing, it's inevitable that this will happen. 

[Bang]

Hey, leave the shareholders alone. they just have to provide the jobs. they don't say anything about the jobs actually being worth anything. So long as they get theirs, then America is ..   

strong?

 

 

A shareholder and the corporate board that hides behind their skirts to excuse their greed, does hold a responsibility to more than just grabbing everything they can. Part of the investment is in much more, and if you invest in the people we all prosper, and the shareholders STILL reap the rewards. 

I don't think unskilled labor and menial jobs should pay well. 
However staying above the poverty line only helps us all, even if it's just a little bit. People will still be spurred to want more and to better themselves. Some think that the hungrier people are, the harder they'll work to succeed, but it is practically impossible to live while you try to do that.

and then what does it cost? 

 

~Bang

[endzone_dave]

20 years ago I took my first job out of college and it paid 19k a year appx. 

 

And it was a 55-60 hour a week job.

 

 

And I was able to make it work. 

 

I didnt own a house, I had roommates, ate ramen, drank cheap beer.  And had a blast.  And worked toward a better life, job, promotion etc.

 

You can survive on a minimum wage job if you're willing to live cheap.  Having a car, house, cable tv, cell phone... is not going to happen.

 

I don't think minimum wage jobs were ever meant to allow someone to live the American Dream.  It would be great if running a cash register allowed me to buy a house, a car, nice vactions, and college money for my kids.  I'd be the first in line. 

[techboy]

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.

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.)

Here's what A Survey of the Effects of the Minimum Wage on Prices, which is a literature review done by Sara Lemos of the University of Leicester in 2006, found:

 

Despite the different methodologies, data periods and data sources, most studies reviewed above

found that a 10% US minimum wage increase raises food prices by no more than 4% and overall

prices by no more than 0.4%. This is in line with Brown’s (1999, p. 2150) remark, in his recent

minimum wage survey, that “the limited price data suggest that, if anything, prices rise after a

minimum wage increase”.

[mistertim]

[Springfield]

20 years ago I took my first job out of college and it paid 19k a year appx.

And it was a 55-60 hour a week job.

And I was able to make it work.

I didnt own a house, I had roommates, ate ramen, drank cheap beer. And had a blast. And worked toward a better life, job, promotion etc.

Like some else brought up, $19k went a lot further 20 years ago. Housing prices in my area are at least double, if not triple from 20 years ago.

The price of gas is at least triple than what it was 20 years ago.

Two major factors. People will move further away from their jobs to get a better housing cost. The further you live away from your job, the more money you spend on gas.

All the while, in those 20 years, the cost of everything that you need to live (or enjoy yourself) has close to doubled or tripled.

Minimum wage? It's $2 an hour higher.

[Destino]

20 years ago I took my first job out of college and it paid 19k a year appx.

And it was a 55-60 hour a week job.

And I was able to make it work.

I didnt own a house, I had roommates, ate ramen, drank cheap beer. And had a blast. And worked toward a better life, job, promotion etc.

You can survive on a minimum wage job if you're willing to live cheap. Having a car, house, cable tv, cell phone... is not going to happen.

I don't think minimum wage jobs were ever meant to allow someone to live the American Dream. It would be great if running a cash register allowed me to buy a house, a car, nice vactions, and college money for my kids. I'd be the first in line.

Without a car and a phone steady employment is difficult. Employers expect you to have a number where you can be reached. It's no longer the 90s when a cell is a nice little gadget. Luckily they are cheap these days. Without a car public transportation is needed to get to interviews and to work and that limits options.

That's the beauty of the game. The less you have the harder it is to get anything. Look at the recent crisis where companies that lost money because of the reckless behavior of executives laid off workers... and then went ahead and held unemployment against applicants.

Don't hate the player.

[elkabong82]

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?

 

How about the parent company reduces the profit margin they claim from each of his franchises? Or how about before spending money opening a 3rd store you make sure the first 2 have employees who make enough to where they have a budget that allows them to heat and cool their living space?

[endzone_dave]

 

20 years ago I took my first job out of college and it paid 19k a year appx.

And it was a 55-60 hour a week job.

And I was able to make it work.

I didnt own a house, I had roommates, ate ramen, drank cheap beer. And had a blast. And worked toward a better life, job, promotion etc.

You can survive on a minimum wage job if you're willing to live cheap. Having a car, house, cable tv, cell phone... is not going to happen.

I don't think minimum wage jobs were ever meant to allow someone to live the American Dream. It would be great if running a cash register allowed me to buy a house, a car, nice vactions, and college money for my kids. I'd be the first in line.

Without a car and a phone steady employment is difficult. Employers expect you to have a number where you can be reached. It's no longer the 90s when a cell is a nice little gadget. Luckily they are cheap these days. Without a car public transportation is needed to get to interviews and to work and that limits options.

That's the beauty of the game. The less you have the harder it is to get anything. Look at the recent crisis where companies that lost money because of the reckless behavior of executives laid off workers... and then went ahead and held unemployment against applicants.

Don't hate the player.

I definitely don't hate the player.  Life can put you in a tough spot and you'll take anything you can to put food on your family's plate.  But if you find yourself there, you have to do everything you can to get out of it.

[Kindred]

 

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.

 

 

This is a common misunderstanding so I'm going to use an extreme example to explain it.

Lets take a luxury good like perfume. Lets say it costs a company $5 in labor to make a bottle which they sell for $100. Marketing, distribution, etc takes a chunk out of it, but net profit is still $60 on every bottle. How do they determine price? A combination of factors - demand, prestige, and price points. If labor increases from $5 to $6 do they increase the price on the bottle?? No, they are already charging the maximum that the market will bear and any price increase negatively impacts their sales. So what happens? Their net profit goes from $60 to $59 on each bottle. Is this a back breaker? no (as opposed to increasing the price which results in selling 1000 less bottles at a significantly greater total loss). 

Is this example true for all companies/industries? No. Many have slimmer margins, in which case they will raise prices (or find a way to improve efficiencies). But thats ok because with more people making more money, they will now be able to afford these higher prices. This is a natural and healthy way for economies to grow. It's why both our prices and our salaries are higher than 3rd world countries.

I wish people would stop worrying about prices rising. Prices of products will always be controlled by competition and demand. Focus on increasing people's wealth and that wealth will drive the economy.

[skinsmarydu]

Y'all know I could go on for hours on this topic, so I won't.  But someone has to do these jobs, preferably a person with good manual dexterity (no one thinks about these things).  Remember the day when your boss would take you into the office and say, "You've been getting better & faster, so I'm gonna give you a raise."?  Those days are gone.  What incentive does that give the employee to get better or faster?  To learn more about the food they're making, be able to make suggestions to management about how to be a better store?

What this "minimum wage" system has done is made sure that you won't pay more for crappy food, and the person making it or serving it won't give a hoot if you die from it.  They've got no incentive to make you happy and want to come back.

[pointyfootball]

You can't raise a family on single income from lowest paid jobs in the country.  Unless they raise MW to $15+/hour.  As previously stated, those jobs were not intended, nor should they be, to raise a family on.

 

And...$100 for cable?  I don't even pay that. IMO if you're really scrimping for $, you don't have cable and your phone is the cheapest cell you can buy.

[rictus58]

You can't raise a family on single income from lowest paid jobs in the country.  Unless they raise MW to $15+/hour.  As previously stated, those jobs were not intended, nor should they be, to raise a family on.

 

And...$100 for cable?  I don't even pay that. IMO if you're really scrimping for $, you don't have cable and your phone is the cheapest cell you can buy.

 

Intended or not, for many, that IS reality.

And making MW, it's nearly impossible to better yourself through higher education.

[Chew]

Good lord I wish it was that cheap to live in the DC area.

 

dude....i didn't realize how ridiculous the cost of living in DC was until I thought about moving back

 

I get it...all the fed jobs and one of the best job markets in the country.  but JESUS H. CHRIST does DC suck when it comes to cost of living.

 

Here in Denver, I pay less on my mortgage for a custom built, brand new house than my friends in silver spring pay for rent on a 2-bedroom near silver spring metro station LOL.  i keep telling everybody i know back home to get out of dc as fast as they can. 

[pointyfootball]

You can't raise a family on single income from lowest paid jobs in the country.  Unless they raise MW to $15+/hour.  As previously stated, those jobs were not intended, nor should they be, to raise a family on.

 

And...$100 for cable?  I don't even pay that. IMO if you're really scrimping for $, you don't have cable and your phone is the cheapest cell you can buy.

 

Intended or not, for many, that IS reality.

And making MW, it's nearly impossible to better yourself through higher education.

I did it by making ~$10-12k a year.   And student loans.    No help from parents, had to share tiny apartment with 3 other people in Philly and it took 8 years of college-budget-living after I graduated to pay off loans.  Understand it isn't easy, and I really do feel for those who HAVE to work that type of job if they already have a family.

[endzone_dave]

You can't raise a family on single income from lowest paid jobs in the country.  Unless they raise MW to $15+/hour.  As previously stated, those jobs were not intended, nor should they be, to raise a family on.

 

And...$100 for cable?  I don't even pay that. IMO if you're really scrimping for $, you don't have cable and your phone is the cheapest cell you can buy.

 

Intended or not, for many, that IS reality.

And making MW, it's nearly impossible to better yourself through higher education.

If you're a guy working at Taco Bell assembling tacos and burritos you can either stay there making minimum wage or try to upgrade to a job that pays better, like painting, waiting tables, driving a bus, working in a warehouse... 

[TD_washingtonredskins]

Couldn't the second income be referring to another employed family member, not assuming that the McDonald's employee is working a second job? Anyone who is attempting to support an entire household on a McDonald's salary is going to struggle.

Good lord I wish it was that cheap to live in the DC area.
 

dude....i didn't realize how ridiculous the cost of living in DC was until I thought about moving back

 

I get it...all the fed jobs and one of the best job markets in the country.  but JESUS H. CHRIST does DC suck when it comes to cost of living.

 

Here in Denver, I pay less on my mortgage for a custom built, brand new house than my friends in silver spring pay for rent on a 2-bedroom near silver spring metro station LOL.  i keep telling everybody i know back home to get out of dc as fast as they can. 

 

My wife and I are considering a move south at some point. We have two kids and our families (their grandparents) are all very close to us here in DC.

 

But the horrible traffic, crazy rat-race, etc. has worn us down. I love my roots, but a slightly slower lifestyle and better quality of life might be worth the lower salaries and being further away from family and friends.

[Botched]

My wife and I are considering a move south at some point. We have two kids and our families (their grandparents) are all very close to us here in DC.

 

But the horrible traffic, crazy rat-race, etc. has worn us down. I love my roots, but a slightly slower lifestyle and better quality of life might be worth the lower salaries and being further away from family and friends.

 

It's worth it IMO. Northern VA can be nice, especially parts of Loudoun and Fairfax counties. Buuut, all you need to do is go an hour or two South, and the cost of living and the traffic are sooo much more normal. I like not having to factor in traffic every time I want to leave the house. You still get all the DC news and sports broadcasts too, which should be the top priority in relocating anyway.

[TD_washingtonredskins]

My wife and I are considering a move south at some point. We have two kids and our families (their grandparents) are all very close to us here in DC.

 

But the horrible traffic, crazy rat-race, etc. has worn us down. I love my roots, but a slightly slower lifestyle and better quality of life might be worth the lower salaries and being further away from family and friends.

 

It's worth it IMO. Northern VA can be nice, especially parts of Loudoun and Fairfax counties. Buuut, all you need to do is go an hour or two South, and the cost of living and the traffic are sooo much more normal. I like not having to factor in traffic every time I want to leave the house. You still get all the DC news and sports broadcasts too, which should be the top priority in relocating anyway.

I feel like I'm derailing this thread...but we are considering going further south (South Carolina). So, I would need to make sure I get NFL Sunday Ticket, etc.

 

It's early in our talks right now...it might not ever happen. But the thought of starting somewhere new and having life be just a bit less hectic, a little simpler, etc. is nice.

[ncr2h]

If anything, the outrage over this budget underscores how entitled many people in the US are.

 

Overall, the message from them is clear - every single job in this country should support a single wage-earner, living in his/her own apartment or house, with dependents.  There can be absolutely no making of common-sense financial decisions such as (a) living with your parents until (or even after) you are married, ( getting rides with a coworker, friend, or parent, or © splitting bills with a spouse or significant other.  These are unacceptable in America - the minimum wage must cover the absolute worst-case scenario of the dude who knows absolutely nobody, has no parents or completely alienated his parents and relatives, has no friends, and has kids that depend on him.  If we expect people to do these things it's actually our fault for even thinking that someone could live such a sheltered and priveleged life.

 

The other message is that there are certain budget items that are universally necessary and it would be barbaric to live without them.  Things like medical insurance, cable TV, cell phones, cars, etc. are all luxury items that are self-evidently not necessary.  Cars could fit into this category as well.  We can't have people in this country slogging around without a cell phone and car, because that would be such a 3rd world existence.

[WakkaWakka]

You're right. We shouldn't expect more than mud huts and a steady diet of rice and beans in the wealthiest country on Earth. Anything more is luxury, like health insurance as you stated.

 

 Nevermind the growing income disparity. Pay no attention to the man behind the curtain.

[TD_washingtonredskins]

ncr2h, that's a good point. Even if you wanted to watch TV and have a cell phone, you could do both for far less per month than is illustrated above.

 

I wonder when we got to the point when having your own car, a smartphone, premium television, and high-speed Internet needed to be built in as "givens" in a household budget.

 

Gas, electric, water, and groceries is the starting point for someone who's living off of minimum wage. If he or she can afford to tack other things on, then great. People that came before us didn't just assume that they'd own/lease a car or have cable TV if they didn't have the money for it.

You're right. We shouldn't expect more than mud huts and a steady diet of rice and beans in the wealthiest country on Earth. Anything more is luxury, like health insurance as you stated.

 

 Nevermind the growing income disparity. Pay no attention to the man behind the curtain.

 

There's a big difference between needing an iPhone and living in a mud hut. Do you really not notice that your viewpoint is pretty entitled? You can have a cell phone for calls and texts without it costing more than $30 per month. You can have basic cable and keep yourself entertained.

 

To me it just seems like the list of "needs" has doubled since the 1970s or 1980s. I know that times have changed, but people still do need to distinguish between "want" and "need" if money is tight. I realize I say that as my family owns multiple smartphones, tablets, etc. but we have two people making money and can afford it without going into debt, etc. Not everyone is as lucky as we are.