A Monthly Budget on a McDonald's Salary

mcdonaldssamplemonthlybudgetLots of sources are pointing to a sample budget that McDonald’s and VISA put together for a person making about the same amount per year as a burger flipper at McDonald’s, $7.72 per hour. Well, it is a sample budget that is missing a line item for food. Odd for a company that sells food.

But the most annoying thing is that you can’t keep to this budget, unless you work two full-time minimum wage jobs or have a partner that does the same thing, while not accruing any expenses. Forget about kids.

Tar and pitchforks, my friend. Tar and pitchforks.

UPDATE: This story is still going. Some links. Wonkblog thinks this budget is realistic. Surprisingly, Mother Jones agrees. CJR also points out that government subsidizes your Happy Meal by providing EITC and food stamps to low wage workers.

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27 thoughts on “A Monthly Budget on a McDonald's Salary

  1. I brought this budget up to the kids. It’s clearly non-sustainable. I wonder if they zeroed out the heat after realizing the numbers would add up to less than zero. It also works out to 12 1/2 hour workdays every weekday at minimum wage.

    When we discussed, the kids asked who had these jobs, since it was clearly impossible to sustain yourself on them. Does anyone know the characteristics of the actual budgets of McDonald’s workers? I’m guessing that they all involve some for of aid, debt, and assistance (either from others, like parents, or from the government).

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  2. wouldn’t a McDonalds budget be about the same as a Walmart budget? And 20 for healthcare, I don’t understand that at all. 20 bucks for tylenol?

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  3. The new people at McDonald’s who are paid that little get split and varied shifts that would make having a second job very hard. I assume the health care budget is a copay for someone on a government plan.

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  4. My guess is that the numbers were actually made up out of thin air, kind of like when 4th graders are given the HW of making a budget in order to learn spreadsheets (as my kiddos informed me they’d done when I told them about the McDonald’s budget).

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  5. I’m assuming that most of the actual McDonald’s workers live in some form of extended family/multiple family household (including things like renting a room in someone else’s house) — and that the ‘second job’ might be something off the books like watching someone’s kids and getting paid in cash. I think the difficulty in making a ‘budget’ is that this country is becoming more and more like the former SOviet Union — everyone has a second job, usually off the books. There are lots of unofficial economic arrangements — like all the middle class families where grandma and grandpa pay a fair amount of the expenses and pay for the family vacation and private school.

    I am currently at an academic conference and the talk turned to ‘consulting’ and everyone had at least two other sidelines (and these are people with tenure!) – I actually saw a couple of guys doing the Soviet business card shuffle, where they had a bunch of business cards for their various consultig gigs and they were trying to decide which ones to hand out.

    I think that the academic econ and anthropology literature about people living on the edge confirms this — people lend each other money to make it until the end of the month, they take a payday loan, they have their cards reposessed. You’re right — at that point, any kind of standard budget is ludicrous. Someone’s ‘income’ might include a court settlement, disabilities payments, money you get for fostering your grandkids, the food you got from the food pantry. I know earlier in your blog, you had talked about how having the luxury to plan and to know that you would have a steady income, that you would recover if you had a setback like losing a job, that a trip to the doctor wouldn’t wipe you out financially is really what sets the social classes apart. This attempt by McDonald’s to give people a budget ignores that economic reality. IT would be like lecturing these guys because they didn’t have three months living expenses stashed away for an emergency! Let’s get serious. THis is just untenable.

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  6. Well, some of the numbers bear a relationship to reality, like the number for rent (I doubt that too many minimum wage workers are homeowners with mortgages), but I have no idea what the health insurance number means or how a person lives with no food.

    I mean, I’m sure it’s possible to live on minimum wage without starving or sleeping in the street, it’s just that you won’t have a budget line for “saving” or one for “health insurance.”

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  7. The first link was supposed to go to the Atlantic. Fixed. In the Atlantic, Jordan Weissmann pointed out that the only way this budget is workable is if the worker is getting lots of supplements from the government, like food stamps. He says that the government enables businesses to pay their workers unrealistic wages. Which is true.

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  8. but maybe that’s the only model for unskilled workers — I know the data on increasing minimum wage is mixed, but if increasing wages does decrease the liklihood that these workers will be hired, maybe the only way to keep them employed is to keep minimums low, but subsidize them.

    I do believe there is value in structured work in integrating people into society and its demands — a reason why paid work for teens is a good thing, too. even if it’s a dying activity.

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  9. When faced with budgets like this, I’m surprised more people don’t turn towards crime or drug dealing. Living the high life with a high chance of early death or prison doesn’t seem like such a bad trade off with 50+ years of drudgery followed by, if you’re lucky, an impoverished old age.

    That large companies can pay their workers so poorly that food and healthcare must be provided by the government is an absolute outrage and yet another hidden example of corporate welfare. I hope more states follow California’s lead and sue Walmart.

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    1. Drug dealing doesn’t actually pay very well at all, at least according to Freakanomics. I’d guess that most of the types of crimes available to somebody whose alternative is working at Taco Bell don’t pay very well either.

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      1. At the lower levels, you’re probably right. At least sampling the wares is a bigger perk dealing crack vs. dealing hamburgers. Though, even if petty crime on the whole pays about as well as Taco Bell, it gives one larger chunks of money at a time, which is better for purchasing substances for instant gratification. For certain personalities, it’s probably more gratifying work as well.

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  10. ” ….He says that the government enables businesses to pay their workers unrealistic wages. Which is true.”

    Best thing the government does is EITC in this line, second best is food stamps. It’s better for people to work than not to work. We feel better, our lives go better, if we have to get our butts out of bed and go do something. Some of us are not going to add $50000 to anybody’s profit by working, but we can add SOMETHING. Plus, the Devil finds work for idle hands.

    next, kids. “..or have a partner that does the same thing, while not accruing any expenses. Forget about kids…” A kind of grim story on that side is two girls who were being bullied at my kids’ elementary school, one was the daughter of parents who were each working two minimum wage jobs, they just didn’t have the bandwidth to advocate for her and they told her she had to suck it up. Second was the daughter of a friend, who stormed into the principal’s office, got the bully suspended, and rescued the other girl while doing so – but it was pure bycatch, if my friend’s daughter hadn’t also been victimized, no one would have saved this girl. dave.s.

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    1. This anonymous was me, sorry. And here is an instapundit post from today: Posted at 5:32 pm by Ed Driscoll
      GET WOKE, GO BROKE: Starbucks also plans to close about 150 company-operated American stores over its next fiscal year. And note this:

      The closing stores are often in “major metro areas where increases in wage and occupancy and other regulatory requirements” are making them unprofitable, Johnson said. “Now, in a lot of ways, it’s middle America and the South that presents an opportunity.”

      Huh – all the best people told me that #fightfor15 would have no deleterious effect on the food and beverage industry.

      97 Posted at 5:14 pm by Ed Driscoll

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  11. Meh. Mother Jones’ point was, if you ignore health insurance and childcare, the budget might be doable, when you consider government aid as well. Very cheap childcare is often more than $1,000/month, particularly for multiple children. Health insurance on the private market is at the very cheapest $100s a month, and that’s if you’re young and healthy. Insuring an entire family on the private market is also going to be much more. One can go without insurance, but even one medical crisis is going to cost far more than $240 a year. If we’re also assuming significant government aid (which doesn’t seem to be assumed, since ‘other income’ is listed at $0), then we need to ask the question of why we think it’s acceptable for corporations to pay full-time employees such low wages that they have to be subsidized by the govt, and how is that not corporate welfare?

    I guess mainly my problem with the budget is it’s for a demographic not reflected in actual McDonald’s workers, i.e., young, healthy DINKs. My guess is most dual income McD’s employees have children. If one is childless, then one is probably single and self-supporting or someone else’s dependent. Living on $13,200 a year, even as a healthy young person, is far more challenging than supporting a family of 2 working adults on $25,000/year, but that’s not the story McDonald’s wanted to paint. Raising a family as a single parent on $13,200/year is even more impossible, but again, McDonald’s didn’t want to create a budget which shows significant reliance on govt aid or pay day loan companies. If there are DINK families, then we’re probably talking mother/daughter sorts of arrangements, in which case health insurance and health care are going to have to take up a much larger part the budget, since the effects of an unhealthy lifestyle such as the stress of being poor and of eating unhealthy food usually show up by early middle age.

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  12. Today Instapundit linked to an article about automation of the barista function: http://qz.com/134661/briggo-coffee-army-of-robot-baristas-could-mean-the-end-of-starbucks-as-we-know-it/ and I recently saw an article about an automatic burger maker. So, why should McD’s even bother with these actual people, who are grouchy about their wage packets. The Automat will be back before we know it…

    What can be done? One of the most important things now is EITC, which does not appear in the McD budget but is a big top-up for families trying to survive on minimum wage. I think it would be smart to make EITC more generous, and to adjust it to fit the realities of low income life more – maybe a payout every two weeks during every quarter after you qualified the last quarter. Or we could bring back Ned Ludd and break the looms – nowadays that would be sledgehammering the ATMs.

    It does seem clear that raising the minimum to $15 would just accelerate the move to barista and burger machines, which does not take us places to which I think we want to go.

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  13. How many burgers do the burger machines purchase? How many cups of coffee do the auto-baristas buy?

    Getting rid of service industry jobs means getting rid of most of the customer base. Food stamps don’t cover already-cooked food.

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  14. The Davosians speak!

    The Hidden Automation Agenda of the Davos Elite
    This year’s World Economic Forum in Davos, Switzerland, where business leaders’ public positions on automation’s impact on workers did not match the views they shared privately.
    By Kevin Roose, Jan. 25, 2019
    DAVOS, Switzerland — They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible.
    I know this because, for the past week, I’ve been mingling with corporate executives at the World Economic Forum’s annual meeting in Davos. And I’ve noticed that their answers to questions about automation depend very much on who is listening.
    In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. …
    But in private settings, including meetings with the leaders of the many consulting and technology firms whose pop-up storefronts line the Davos Promenade, these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.
    … They crave the fat profit margins automation can deliver, and they see A.I. as a golden ticket to savings, perhaps by letting them whittle departments with thousands of workers down to just a few dozen.
    … Now they’re saying, ‘Why can’t we do it with 1 percent of the people we have?’”
    … Kai-Fu Lee, the author of “AI Superpowers” and a longtime technology executive, predicts that artificial intelligence will eliminate 40 percent of the world’s jobs within 15 years. …
    But at a time of political unrest and anti-elite movements on the progressive left and the nationalist right, it’s probably not surprising that all of this automation is happening quietly, out of public view….
    One common argument made by executives is that workers whose jobs are eliminated by automation can be “reskilled” to perform other jobs in an organization

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