McDonald's serves up shocking insight on low-wage jobs

McDonald's sign golden arches

McDonald's has stepped in a deep-fat-fryer's worth of trouble by offering its workers some unsolicited financial advice.

It's not the advice that's the problem.

It's the fact that McDonald's unwittingly proved that you can't really live on its low-wage jobs, no matter how smartly you manage your money.

The evidence is on a website called the Practical Money Skills Budget Journal that McDonald's created to help its workers "Learn to spend and save wisely" and "Discover where your money goes."

I cringed when I saw McDonald's had turned to Visa, of all places, for help. A credit card company is the last place I'd go for advice on money management.

But no one appreciates the value of budgeting more than we do at Interest.com.

"You need a plan that ensures your hard-earned dollars are being spent on what you value most and that you're saving at least a little toward future goals," is how we put it in our most recent story on how to create a budget.

"A budget empowers you to take control of your financial life," we wrote, "and creating one is easier and more enjoyable than you might think."

McDonald's evokes the same sentiment on its website, saying that it's "a great first step toward taking control of your money. … Knowing where your money goes and how to budget is the key to your financial freedom. Let's get started by talking about your goals."

The budgeting process McDonald's goes on to provide is perfectly fine. There isn't a financial adviser in the country who would object to it.

The problem comes when McDonald's tries to infer that someone can actually live on its minimum-wage jobs if they just manage their money well enough.

The "Sample Monthly Budget" it provides assumes that a typical McDonald's worker earns $1,105 a month "net," or after taxes. That's more or less the take-home pay of someone working 40 hours a week at $8 an hour.

But the budget then says this worker needs a "2nd job," paying an additional $995 per month, to cover his or her "Monthly Expenses" of $1,310, including $600 for a mortgage or rent, $20 for health insurance, $150 car payment and $25 a day in "spending money" for food, clothes and other costs.

In my mind, this raises two big questions:

How many hours a week does McDonald's expect its employees to work? Because I'm figuring it's counting on 70 to 75 low-wage hours a week in this example.

And where does this worker supposedly live? Everything is way more expensive than this in suburban Chicago, where I live. (Which, oddly enough, is where McDonald's has its corporate headquarters.)

So what does this tell me?

McDonald's employees aren't poor because they don't manage their money very well.

McDonald's employees are poor because they simply aren't paid a living wage.

I'm a big believer in budgeting. But you've got to have a reasonable amount of money to work with before money management can help save and begin to build financial security for you and your family.

Minimum-wage jobs simply don't pay enough to do that. McDonald's just laid the numbers out for us, and the conclusion is pretty obvious.

"Despite its good intentions, when comes down to it, McDonald’s, by positing two jobs for this fictional worker, has tacitly admitted that its employees can’t live off the wages it pays."

The predictable anticorporate pandering of a liberal magazine or columnist? Nope, that's what Forbes.com said in its story.

So how do minimum wage workers make ends meet?

We subsidize their employment through government programs such as Medicaid and food stamps and charitable donations to things such as food pantries and homeless shelters.

It's way past time for a serious national debate about employers who deliberately pay their workers too little to live on, knowing that taxpayers and philanthropists will make up the difference.

Thanks for the unexpected reminder, McDonald's.