home Commentary, Economy, North America, Politics Can’t Survive on $7.25: The McDonald’s Budget

Can’t Survive on $7.25: The McDonald’s Budget

For low-income people in the US, life is often a paycheque-to-paycheque existence, focused on eking out as much as possible from each measly handout from an employer. With the federal minimum wage set artificially low when contrasted with inflation and the cost of living, low-wage workers have recently entered a state of revolt, as evidenced by the ‘can’t survive on $7.25’ cries issuing from the mouths of striking workers across the United States. The fast food industry in particular has been a labour target, given the traditionally low wages on offer paired with the grueling work—food service workers have historically occupied a low place in US society, and their low wages are a striking reinforcement of that.

Enter the McDonald’s budgeting tool, which was developed five years ago, but exploded in the media this July. The fast food giant commissioned a budgeting tool for employees from Wealth Watch International and Visa, who paired to develop an instrument theoretically designed to help workers manage their wages more effectively. With financial literacy an acknowledged issue in many low-income communities, such a tool might at first seem like a good thing, offering valuable instruction and assistance to people who want to learn how to save money.

However, there’s a small problem with the budget: taking the given costs of living and expenses and pairing with estimated salary, McDonald’s effectively states that workers need a second job to survive. Why? Because the company’s wages are so low that employees working 35-40 hour standard work weeks in the US can’t earn enough to actually meet the minimum amount needed to afford to live according to the budget, which actually falls woefully short of reality.

The estimator contains some very interesting assumptions about life for low-income people in the US, suggesting that people cut expenses like heating and health care, and limit spending on such petty costs as food and rent. Needless to say, any form of entertainment isn’t accounted for in the budgeting tool, a reminder that poor people in the United States are expected to live in misery and drudgery from day to day, not spend their funds on frivolous things like books, films, or travel. These things are for the middle and upper classes.

Take the estimate for the expense of keeping and maintaining a car: $150 USD per month. In a country with limited public transit coverage, having a car is effectively a necessity for many workers, in particular those with multiple jobs who may have tight schedules that could be thrown off by late buses and trains. As a resident of the US, I’m curious to know how McDonald’s arrived at that number, and I’m dying to talk to their insurance provider, given that my car insurance alone is $1,200 USD per year, and at that point I haven’t bought a single tank of petrol, paid for any standard maintenance, or made any payments on my lease (many low-income workers are forced to lease or buy on credit because they cannot afford a car outright, or they’re required to buy cars of poor quality that require constant repairs).

Health insurance (which, in the US, does not equate to health care)? $20 USD monthly—that’s more than many people spend on basic items like bandages, aspirin, and other first aid necessities to keep around the house. It wouldn’t even pay for a basic visit to a clinic to see a provider for a non-urgent issue (a fee for a basic exam at my local clinic is $55), and it certainly wouldn’t cover meaningful health insurance coverage, unless the carrier only offered coverage for a few days monthly (time your heart attacks for alternate Thursdays, McDonald’s employees).

And so on down the line. The tool clearly doesn’t reflect the actual cost of living in the United States, and it assumes a gross burden of its employees, suggesting that it’s perfectly reasonable to demand that people work two or more jobs to support themselves. Even if a household is dual-income, it’s unlikely the members could meet the budget, and that’s before meeting the expenses associated with having children and other potential obligations, as McDonald’s workers do not actually live in a vacuum.

The assembly-line style of the budget is, of course, a reflection of the company’s approach to food production and worker management, but more than that, it speaks to larger social attitudes about low-wage workers in the United States. Evidently the nation seems to have collectively convinced itself that it’s utterly reasonable to expect such workers to labour for extended hours and limited pay to support the rest of society, yet the country turns on such workers viciously when they rise up to demand justice or fair wages, let alone ask for social support.

When low-wage workers file for government assistance, for example, they’re heavily criticised for not working more. Yet, no one seems to ask why it is that such workers are forced to rely on this assistance in the first place, and why the US government is comfortable subsidising their employers by covering the expenses their salaries don’t cover. Someone working 40 hours a week shouldn’t need food or housing assistance, yet this is often the reality in the US—why should the government, instead of the employer, be meeting these expenses for workers? Especially since many of these firms are also notorious for their tax evasion, and thus aren’t even paying into the system that keeps their workers from the brink of disaster?

The contempt for low-income people in the US is an indelible part of the fabric of society in this nation, with ‘tools’ like the McDonald’s budget only reinforcing it. The uproar over the tool in progressive circles is testimony to the hard work of labour activists who have been fighting for better conditions for low-wage workers in the US, but whether the movement has legs remains to be seen. Even as progressives seem eager to embrace the cause, they might not be willing to put their money where their mouths are, and they’re facing a significant obstacle in the form of the companies they’re going up against.

What’s needed here is not just pressure on fast food giants to stop treating their line workers like disposable automatons, but an insistence that the government raise the minimum wage to a living wage, and pair it with a crackdown on tax evasion that will force companies to actually pay into the systems they currently exploit. And this, of course, requires that US legislators and policymakers be extracted from the talons of lobbyists, the well-paid, sleekly-fed messengers of those who stand to lose the most if workers are finally given equality in this country.

McDonald’s may have Egg McMuffin on its face after this budgeting debacle, but the company may rest confident in the knowledge that its business practices will return to going unremarked after the requisite period of progressive outrage.

Photo by rob_rob2001, licensed under the Creative Commons Attribution-ShareAlike 2.0 Generic license.

2 thoughts on “Can’t Survive on $7.25: The McDonald’s Budget

  1. I worked at McDonald’s years ago in Southern California. It was viable for students living at home, not for anyone who relied on that income as a lifeline. Working conditions are extremely hot and greasy and management was very condescending to staff. I lasted a few months and then got a BETTER job at a Pizza Hut. These guys should Unionize and kick some Micky D ass!

  2. My wife & I receive combined gross Social Security income of $2,200 a month. I we each worked 40 hours weekly, that would work out to $6.88 an hour…

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