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The fast-food chain may have been sincere in its attempt to help its low-wage workers budget, by creating a financial planning guide that suggests monthly spending on a variety of expenses. But the company is blind to the realities.

Written by Anika Rahman for RH Reality Check. This diary is cross-posted; commenters wishing to engage directly with the author should do so at the original post.

McDonald’s has taken some heat for its Practical Money Skills Budget Journal, a financial planning guide for its low-wage workers that suggests monthly spending on a variety of expenses. That’s pretty ironic since heat was one of the things McDonald’s failed to anticipate in the guide's first iteration—it was later included in the sample budget in response to public pressure.

News coverage has noted the implausible monthly $600 rent (compared with the national average of $1,048). Many people have pointed out the impossibility of spending just $27 a day on gas and groceries, and the absence of a clothing budget. All of these criticisms are completely valid.

McDonald’s has defended the second income required to balance this budget, indicating that it could be representative of a two-person household, with both contributing. Let’s play along with this scenario.

Two-thirds of fast-food workers are women, according to the federal Bureau of Labor Statistics. The majority are older than 32—in their prime years for raising children. In fact, almost a third of minimum-wage earners are raising children. Thus, there’s a good chance that our theoretical couple has children. But let’s back up.

Assuming that the full-time McDonald’s worker qualifies for the company’s $14 a week health-care plan and that costs already have been deducted from the gross pay in this budgeting scenario, the plan caps coverage at $10,000 a year—a measly amount, particularly for a female employee (or insured female partner of an employee) who gives birth to a child.

The joy of that child would surely be dampened by the realization that no money is left to dedicate to child-care costs—the average of which exceed average rent costs in half of all states for just one child. Using the financial planning guide’s insanely low projection of $600 for rent, this family would likely need at least $600 for child care, leaving merely $200 to feed and clothe a family of three each month.

And that’s being generous. That child-care figure is slightly lower than the results of a recent Restaurant Opportunities Center United study funded by the Ms. Foundation for Women, entitled The Third Shift, which found that working mothers in the restaurant industry (with similarly low-paying occupations as in the fast-food industry) spend an average of 35 percent of their wages on child care. In the sample budget, 35 percent of the net income would be $721.

While the McDonald’s budgeting tool may use “generic examples,” as the company claims, there are real women and families struggling. The Third Shift relays the story of Teresa (whose last name was not published, by request), who balances two jobs in the restaurant industry while raising two children on her own in Los Angeles. When her children were young, she relied on her sister for child care. When her sister wasn’t available, her neighbor cared for her children, but the cost was significant on her meager earnings. Teresa’s children are older now, but economic stability continues to elude her.

“Having a job is a blessing,” Teresa said. “But having a higher wage, for me, as a single mom, would allow me to be able to spend more time with my children. And mothers with younger ones would be able to pay for quality care.”

McDonald’s may have been sincere in its attempt to help employees budget. But the company is blind to the realities. The federal minimum wage is $7.25 an hour. If this budget assumes only one earner working two jobs, that equates to 74 hours a week at minimum wage. If that worker is a single mother, like Teresa, she may need child care for those 74 hours, the cost of which would be astronomical.

While these aren’t issues unique to McDonald’s employees, McDonald’s has a unique opportunity as a worldwide leader of the fast-food industry to raise the standards by which companies treat low-wage employees. The budgeting tool is a transparent acknowledgement that its employees are struggling. Let’s ask McDonald’s to go one step further in tangibly improving the lives of its employees.

On its website, McDonald’s claims, “From the start, we've been committed to doing the right thing. And we've got the policies, programs and practices in place that allow us to use our size and scope to help make a difference. Because what's good for us is good for us all.”

The Ms. Foundation challenges the corporate giant to live up to its own rhetoric by using its size and scope to improve the lives of its hundreds of thousands of employees. That really would be good for us all!

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Comment Preferences

  •  Ah, but they don't RUN the franchises... (4+ / 0-)
    Recommended by:
    howabout, Tracker, qofdisks, Tonedevil

    That's up to the individual franchisees...

    Therefore any blame can be put at the feet of those who follow the corporate policy.


    I don't blame Christians. I blame Stupid. Which sadly is a much more popular religion these days.

    by detroitmechworks on Wed Jul 24, 2013 at 01:20:08 PM PDT

  •  And the assumption of full-time work (6+ / 0-)

    is off-base when many franchise holders require their workers to work 30 hours per week on a flexible schedule that does not permit them regular off hours in which to work a second job.  

    We do not forgive. We do not forget. The whole world is watching.

    by Tracker on Wed Jul 24, 2013 at 01:54:39 PM PDT

    •  My niece had a chance to work (4+ / 0-)
      Recommended by:
      RuralLiberal, qofdisks, Tonedevil, Tracker

      three early morning hours at a grocery store on her way to her fast-food job if only her boss would be a half-hour flexible. Nope, she has to be available to work any hours! Her schedule is never the same and subject to change anytime.

      •  a buddy of mine works retail (2+ / 0-)
        Recommended by:
        Catte Nappe, howabout

        for a parts store chain.

        He's considered "part time" even though, as the only certified delivery driver (CDL) in the state (he lives in the shadow of Fort Bragg's gates), he averages 48-58 hours weekly.

        Been with the company 3 years, and is told that there's no "permanent" opening, or "full-time" opening, available. As a "part time" employee on "temporary" status he's eligible for zero insurance, retirement, or similar benefit -- not even a 401K.

        He never knows for sure what his days off will be, as they can be changed and he can be notified by phone call. He drives a company vehicle on the job. His hours are carefully figured to keep them below 7 1/2 hours a day and spread over every day of the week.

        The overtime is going straight to student debt (he has an associate's and still owes nearly $15K on it). He's a vet, and has a service-connected disability (tore up his knee in basic) but the paperwork regs say he didn't spend enough time on active duty (they sent him home on a medical discharge on day 179, after leaving him in medical hold with a destroyed knee -- ACL, MCL ripped out, patella dislocated -- for 120 days).

        Oh, and this kid's white. Can't afford to date. Can't afford to have an apartment to himself (he makes $0.30 per hour over minimum wage) where he lives. If he gets sick or hurt he has to sack up and go to work anyhow, because illness or injury are "unauthorized absences not arranged in advance" and he could lose his job.

        LBJ, Van Cliburn, Ike, Wendy Davis, Lady Bird, Ann Richards, Barbara Jordan, Molly Ivins, Sully Sullenburger, Drew Brees: Texas is NO Bush League!

        by BlackSheep1 on Wed Jul 24, 2013 at 04:43:22 PM PDT

        [ Parent ]

  •  My niece works in one of these places. (4+ / 0-)

    She has a baby and she has to pay for more hours for childcare  than the typical six hour shift where she works.

    When she opens she is expected to be there half an hour early to make sure the place is clean and stocked and another unpaid half or entire hour after her shift for the same reasons. We live in a rural area and travel time is a half hour each way.

    So she gets paid for six hours, but she has to pay a sitter for eight or more.

    My sister pays her outrageous car insurance (close to two hundred a month) and I take care of the baby without pay two days a week to help her. She still is not even close to being able to live on her own.

    And there are no other jobs in our area except this type.

    Thanks for the post.

    The minimum wage must be increased!

    •  We also live in a rural area, (4+ / 0-)
      Recommended by:
      qofdisks, Tonedevil, BlackSheep1, howabout

      so I know what you're talking about.  Non-rural people don't understand the reality out here.  A 20-40 mile one-way drive to work is pretty typical, gas prices are higher than in metro areas, and there are NO public transportation options.

      Where we live there's a McDonald's two towns over, and they appear to employ mainly middle-aged and senior citizens.  I don't know how those employees do it!  In reality, they really don't have many choices.

      You're also right about the types of jobs in rural areas.  Unless you're a teacher, a medical professional, or a government employee, low wages and lack of benefits are the norm.  Even for the above-mentioned group, wages are lower than for comparable positions in metro areas.

      The minimum wage must be increased!

      Stand Up! Keep Fighting! Paul Wellstone

      by RuralLiberal on Wed Jul 24, 2013 at 03:06:56 PM PDT

      [ Parent ]

  •  it doesn't "suggest" any spending amount. (0+ / 0-)

    its just a budget form, ffs.

    •  ^^^^^trolling trolling trolling, keep ^^^^^ (0+ / 0-)

      your bullcrap trolling, along

      Johnny Wurster: do you believe people are entitled to be paid for their work?

      LBJ, Van Cliburn, Ike, Wendy Davis, Lady Bird, Ann Richards, Barbara Jordan, Molly Ivins, Sully Sullenburger, Drew Brees: Texas is NO Bush League!

      by BlackSheep1 on Wed Jul 24, 2013 at 04:46:42 PM PDT

      [ Parent ]

  •  Faulty assumptions (0+ / 0-)

    This McDonald's effort has been out there for several years. From what I can find it started with an assumption that the target audience was teens who will, in a few years, be moving into the "real world" economy. They missed the fact that a good many of their employees are not teens working a part time job to get some pocket money or help their college fund, but adults who are trying to support themselves and a family.

    “Texas is a so-called red state, but you’ve got 10 million Democrats here in Texas. And …, there are a whole lot of people here in Texas who need us, and who need us to fight for them.” President Obama

    by Catte Nappe on Wed Jul 24, 2013 at 06:06:28 PM PDT

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