Perhaps it wasn’t such a surprise to most people when news broke of that McDonald’s employee who sold heroin in Happy Meal Boxes. Maybe, just maybe, the question we should be asking is why we hadn’t heard of it before.
It was just another day at work for employee Shania Dennis when two men came up to her at the Pittsburgh store she worked in. One of the men said that they would “like to order a toy.” Nothing unusual in that except this phrase, apparently, is code to indicate that you would like to buy heroin.
The undercover police then paid $82 for the Happy Meal that would normally cost $2 and walked away with 10 bags of heroin in the boxed meal.
Some minutes later and Dennis was arrested. 50 more bags of the drug were found on her person.
This is not to say that Dennis was perfectly justified for dealing drugs. Rather, it’s an example of what people are driven to in the throes of desperation.
Dennis was earning around the average hourly wage of a McDonald’s employee: $7.25. This puts her squarely into minimum wage territory, which isn’t something that’s likely to help you out of poverty, or get you started on saving money, not in a million years. Not even in a million hours, literally.
Not in a Million Hours
According to Bloomberg, McDonald’s then-Chief Executive Officer Jim Skinner earned $8.75 million in 2012. This means that a McDonald’s employee earning $7.25 an hour would have to work more than a million hours to make what Skinner did.
Just this month, an employee celebrated his 100th birthday at the Massachusetts store he was working in. Morris Miller had been there 25 years. For his 100th birthday, he was given a measly $500 for a bonus.
Miller has vowed to keep working as long as he could. It would have been an inspirational story of sorts for the typical workingman, until you look at the bigger picture.
Here’s another example to demonstrate how unfair this system is: the CEO is able to afford a luxurious lifestyle while a McDonald’s employee can’t even afford to eat at the restaurant she works at. Never mind that this isn’t even a posh establishment. It is a fast food restaurant.
Late last year, McDonald’s employee Shawndraka Mack told Bloomberg Businessweek that she couldn’t afford to eat at the fast food giant. The 40-year-old, who had been working there for 18 years, is raising two teenagers in a mobile home community with her fiancé.
Mack works 40 hours a week and makes $7.60 an hour. Her fiancé receives $600 a month in disability, which goes to car insurance, phone bills, and spending money for their children. They also get $345 every month in food stamps. For her, financial management would only mean making ends meet.
According to data from the UC Berkeley Labor Center, University of Illinois, fast food workers across the United States of America rely on about $7 billion worth of government assistance annually. What this means: public taxes are actually subsidising these food chains.
The McDonald’s Worker Budget
Not to despair, though, because McDonald’s has the answer to your budget management needs. Introducing: the official McDonald’s Worker Budget, lampooned time and time again ever since its inception. Not surprising though because its attempts at teaching financial management is just utter absurdity that adds insult to injury.
According to the monthly guide for managing budget, a typical employee earning $1,105 should allow $600 for rent or mortgage. $150 goes to car payments, $100 to car and home insurance, $100 to cable and phone. Finally, $90 goes to electric and $20 to health insurance. So goes the advice for managing wages.
Here’s where it gets ridiculous: according to Helaine Olen, in her article for Forbes entitled “The McDonald’s Worker Budget And The Tyranny of Personal Finance,” $600 for rent is just unrealistic, to say the least. It’s even worse if you live in cities: REIS reported late last year that the average rent in New York City is $3,017 a month. Olen further says that $20 a month for health insurance wasn’t even applicable 20 years ago.
Furthermore, the McDonald’s Worker Budget doesn’t even account for food or clothing, which are both basic necessities. At the blank where you would pencil in a budget for heat is a big zero. So, you know, freeze in winter so you can make your budget work. That’s one for their money saving tips. Here’s the best part: it acknowledges that a typical employee will need another job to survive.
This is just another impossibility on top of everything: McDonald’s is notorious for being unable to commit to shift schedules in advance. This means employees would be restrained to full-time commitments for part-time wages. This, she says, is the financial literacy that the budget planners need to learn.
Olen calls this “a genre of personal finance” where “rich people tell poor people how to live.” She cites “The Latter Factor” author David Bach, who insists that it’s the small luxuries that keep us from saving money.
Olen further declares that it’s not a lack of personal finance education that these fast food workers suffer financially: it’s simply that their salaries are almost a surefire way to keep them trapped in poverty for life. That’s financial literacy for you.
“The CEOs make Billions and Millions a Year.”
To further rub salt in the wound, personal finance “gurus” keep harping on the fact that while the budget was ridiculous, it was well intentioned. Besides, they seem to imply, it can only be your own fault that the only job you’re good for is flipping burgers and serving up fries.
Here’s another example of how wide that gap in agenda is: late last year, a woman was arrested, apparently for telling McDonald’s USA’s president that she can’t afford shoes for her kids.
Jeff Stratton was apparently giving a speech at the Union League Club of Chicago when Nancy Salgado, 26, decided to speak up.
Salgado had been working for McDonald’s for 10 years and felt that the $8.25 she earned per hour wasn’t fair. She took issue with the fact that CEOs make millions every year and yet are unable to help their employees. The hardest part, she said, was looking at her children’s faces and not being able to buy them shoes or even feed them.
This is the “typical” employee for whom McDonald’s put up the guide to managing wages. Never mind that they’re not earning enough money to even start managing anything.
Wide Salary Gap
The numbers show that it’s not just a question of managing wages, and that Salgado may be on to something here. According to a Bloomberg report, the gap in pay between McDonald’s CEOs and their workers has doubled in the last 10 years. During this time, the company has also financed lobbying against increases in minimum wage.
According to data for the U.S. Census Bureau’s Current Population Survey, older workers are being made to handle grills and fryers more often. Bloomberg reports that “in 2010, 16- to 19-year-olds made up 17 percent of food preparation and serving workers, down from almost a quarter in 2000, as older, underemployed Americans took those jobs.”
It’s not just the CEOs versus their employees. According to Bloomberg, the 1.2 million U.S. households that make up the top 1 percent in income ranking had their earnings increase 5.5 percent last year. In contrast, “earnings fell 1.7 percent for the 97 million households in the bottom 80 percent—those who made less than $101,583.” One can imagine that managing a budget would mean very different things for these two groups.
Nowhere is this more apparent than in the retail and restaurant business. Bloomberg further reports that the total number of people in the U.S. employed at Wal-Mart Stores Inc. and McDonald’s and Yum Brands restaurants (which includes Kentucky Fried Chicken, Taco Bell, and Pizza Hut) exceeds 2.7 million—the entire population of the city of Chicago. Here’s the whopper: net income at those three companies is up by “at least 22 percent from four years ago.”
Workers have been protesting this, of course, in an effort to show that they need more than budget management or money saving tips. In 2012, the largest unionization drive to ever hit the industry in the U.S. saw thousands of fast food employees walk out of the restaurants that they work in to form picket lines. The sad truth, however, is that most of them will be thankful that they haven’t lost their minimum-wage jobs at the end of the rally.