Good: McDonald’s created an online budget tool for its low-income workers to help manage their finances.
Bad: McDonald’s had to include a second job which brings in 46% of the employee’s total income to make this picture something less than ugly. Yes, McDonald’s imagines that its employees are nearly doubling their monthly income with some outside work. Let’s take a look at their math:
1st job: $1,105.
The average low-wage McDonald’s worker makes $8.25/hr, according to Think Progress. This employee brings home $340 in a 40 hour week. That’s $1,360 over four weeks. Perhaps McDonald’s typically has their workers do under 40 hours a week, or perhaps they are skewing this toward their lowest-income workers. Using a 32 hour week gets us almost exactly to McDonald’s estimate, so perhaps that’s it. Either way, nothing crazy so far.
2nd job: $955.
This is not just easy-to-imagine spare money that might bring in through random side work. That would cap out at around $250 for someone with a low-wage job. No, McDonald’s is presuming that their employees are working about four days a week, and then finding time for a second job that brings in almost as much money every month. If we assume that this second job pays $10/hour, our sample employee is working there about 24 hours a week. So, for McDonald’s math to work, they need to assume that their employees work their non-McDonald’s days at a slightly better job.
From there, the McDonald’s budget is mostly reasonable. Mostly. It includes savings ($100), car payment ($150), phone/cable ($100) among others. There are, however, two lines that are simply inaccurate. First:
Health Insurance: $20.
Some McDonald’s employees have an insurance plan through McDonald’s. It costs more than $20 a month. Some McDonald’s employees are either uninsured, meaning a serious accident or health issue could bankrupt them, and whoever’s left is paying for their own insurance, which would put McDonald’s estimate at about one tenth of what it should be.
McDonald’s offers some tips to save money, like taking public transportation, shopping with a list and paying off debt as quickly as possible. All good things. Their sample budget has the additional recommendation of not heating your house. Just put on a coat. Perhaps you could put in more hours at your second job?
It’s good of McDonald’s to try to help out their employees and teach them responsible spending habits. Their budget reveals a stark reality: it’s really hard to live on a McDonald’s salary. Just to make the numbers look friendly, they have to nearly double your hypothetical income and remove heating and insurance costs. It’s sad, but really, don’t blame McDonald’s. Raise the minimum wage.