McDonald’s is under a lot of scrutiny lately for a financial planning site it created with Visa to teach employees how to manage money.
The company’s so-called Practical Money Skills Budget Journal came to the public’s attention at about the same time that fast-food workers across the industry started to pressure employers to raise hourly rates to $15 and allow them to unionize.
Famously lampooned last month on the Colbert Report, a so-called sample budget on the site allots only $20 a month for health insurance, even though McDonald’s least expensive health plan is $12.58 a week for employees who have been with the company more than a year. Initially, the budget made no allowance for heat, although the website was later revised to include $50 a month for this.
Of course, all employers should pay a living wage, especially a company like McDonald’s that, according to Bloomberg, achieved 135-percent profit growth from 2007 to 2011 and paid CEO Donald Thompson a truly obscene $8.75 million last year alone.
But here’s the problem: Even if McDonald’s increased wages to $15 per hour — and let’s be clear, the company has given no indication that it’s even considering this — it wouldn’t be enough. At that higher rate, a worker would make $31,200 a year before taxes (which is a very big “before”) and about $23,400 after.
This is far better than minimum wage, of course, and workable for households of one. But for families of two or more people, unless they are incredibly frugal or both have full-time jobs, $15 per hour is not a living wage.
Maybe it was sufficient 20 years ago, and it still sounds like a princely sum, but the reality is that $15 per hour sounds like a ticket to Easy Street only to people making less.
Those who make less, and a lot of Americans do, basically have three options: Learn to live within very modest means; find a second — and possibly third — source of income; or take steps to ensure their minimum-wage reliance is only temporary.
McDonald’s worksheet proves that the first option is hardly workable (unless your idea of wealth is pocketing $2 a day after paying all bills).
The second option, finding additional sources of income, drew audible gasps from the Colbert audience, though I’m not sure why. Working a second job is an honorable way to make ends meet, although admittedly difficult for single parents, workers with physically exhausting jobs, and employees whose shifts change from week to week — like many McDonald’s workers.
The best option is probably Door No. 3, doing everything possible to get into a better-paying position, through additional education and/or advancement within a company. Again, easier said than done, especially in this economy.
The sad truth is that wealth in this country is unfairly concentrated in the hands of a few movers and shakers, the much-ballyhooed 1 percent, who take home 24 percent of the nation’s income. Compare that to 1976, when the top 1 percent made only 9 percent of the country’s income, and it’s apparent that this seesawing of available money is depleting the middle class, with more of us falling into poverty each year.
How can a man like Donald Thompson feel no guilt for making $8.75 million annually while so many of his employees rely on subsidies financed by U.S. taxpayers to make ends meet? Because he looked after his employees with a facile budgetary guide that advises them to carpool and use public transportation instead of driving solo?
I don’t mean to pick on McDonald’s here. Its situation is hardly unique. Across America, a small cadre of the super rich hold the rest of us hostage. And whenever somebody even suggests the redistribution of wealth, the GOP starts waving copies of “Atlas Shrugged” and screaming “socialism,” before trotting out some chart-wielding PR maven who will explain that, exorbitant as CEO salaries may appear, lowering them won’t really fix the problem, and anyway, who would want all an exec’s responsibility for a piddling $350,000 a year? Don’tcha know these guys are busy creating jobs?
How nice it would be if the mega-rich would limit themselves to salaries that were merely, oh, 20-30 times greater than that of their average employee’s salary, instead of the ridiculous 380-times-bigger paychecks that many take home. But that’s as laughable as believing that the NSA isn’t really spying on Americans.
So I cheer on fast-food workers in their quixotic quest to increase wages. Even though they’re barking up the wrong tree, I can’t really think of a better one. The people in all the gated tree houses, after all, are too high up to even hear them.
Chris Schillig is an Alliance area educator and journalist.
Originally published Aug. 8, 2013, in The Alliance Review.