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Can McDonald’s Really Not Afford To Pay Above Poverty Wages?

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Can McDonald’s Really Not Afford To Pay Above Poverty Wages?
In past economic times, fast-food workers were high school kids and college students. They were paid minimum wage and felt fortunate to earn that much, since they were kids in school. In today’s economy, those demographics have disintegrated.

There are approximately four million fast-food workers in the US; most earn minimum wage or slightly above. The median average pay for a fast-food worker is $8.94 an hour. The average age of fast-food workers, according to Huffington Post, is between 20 and 64.

Many of the workers have college degrees but fast-food jobs are all they have found available. Three-fourths of all low-wage earners are women and out of that number 78% are fast-food workers.

Many of these women are single moms and often hold down more than one job in their struggle to meet their bills. Some fast-food employees work 24 hours a week since it’s a second job needed to make ends meet.




The Strange Correlation Made Between Fast-food Wages and Taxpayers

With that kind of low income, it isn’t surprising that the recent news of McDonald’s third quarter reporting of $1.5 billion in profits (a 5% increase from last year) set a wildfire frenzy of opinion articles.

Huffington Post reported that fast-food corporation CEOs earn 400% more than they did 10 years ago while the average fast-food worker’s wage decreased .03%. But the biggest argument being made by most news media is how these fast-food low-wage paying companies are costing taxpayers $1.2 billion.

You may be scratching your head wondering how fast-food companies could possibly cost taxpayers anything. Yet, a direct correlation is being made between the fast-food industry not paying its workers livable wages and how the workers must rely upon government programs, such as food stamps, Medicaid, housing, etc. to make up the difference.

While it can be true that households with small children with low-wage earnings are eligible for government subsidies, it isn’t always the case, especially for single people or couples. That’s because subsidy programs also penalize anyone whose income exceeds set limits. As impossible as it might seem, those low wages that some fast-food workers earn often means they are disqualified from subsidy programs.

For example, to qualify for food stamps a household with 1 person can have a gross monthly income of $1,245 (130% of poverty) with a net monthly income of $958 (100% poverty).

Any worker earning $8.94/hr x 40 hr week is earning $1,549.60 gross monthly income.

For a couple without dependents, the amount is $1,681 (gross) and a $1,293 (net). You can immediately see that these two examples of earning minimum wage means they may not be eligible for food stamps and chances are other government assistance.

mcdonald's french fries

Economic Literacy

The limitations set forth by such programs often mean that people fall in the cracks of not earning enough money to live on and yet earning too much to qualify for assistance.

Many must choose and juggle paying bills each month as described in a recent article in AlterNet. 42-year-old college graduate Melinda Tope is a single mom supporting four children with her minimum wage income and told AlterNet that she can barely feed and clothe her children.

So, how much of the taxpayers’ $1.2 billion is going to assistance programs that are directly related and blamed on fast-food companies? It isn’t clear, but the $1.2 billion amount being quoted is substantial and makes for great arguments and headlines.

In the meantime, low-wage earners continue to suffer, whether or not they qualify for subsidies. And, the issue is low-wages and shouldn’t be clouded by other arguments that are obviously debatable.

One thing that isn’t being discussed in these stories that place a direct correlation to low-wages and burdening taxpayers is: What would the tax burden be without these industries? It’s clear that a fast-food or any other job that pays minimum wage isn’t going to give the average person a livable income.

By the same token, a company is in business to make money. So, how much is too much in relationship to employee wages? Who sets that bar in a free enterprise system? Typically the company does. When a company makes extreme profits while its employees barely earn a living, the choosing of sides becomes fast and furious.

Is it then up to society to become the moral conscience of a corporation? By what means would society do this? Traditionally, society has voiced its disapproval via boycotts. Employees have voiced their grievance with strikes, which fast-food workers have done and are still organizing. This last method has proven successful in past decades.

It isn’t a new concept and it’s gaining momentum with fast-food workers. Those workers are organizing under a national campaign “Fight for 15”. Fast-food workers are demanding a $15 hour wage. Will fast-food giants buckle under strikes and other tactics or will they simply hire from the excess work pool available to them and replace disgruntled workers?

mcdonald's server

McDonald’s Company Benefits Also Under Fire

Most people expect a corporation as large as McDonald’s, regardless if it is franchise based, to offer its full-time employees benefits and at the least some kind of sick pay. After all, they are serving food to customers and it seems unhealthy for sick people to be doing this.

However, most workers, like single mom Melinda Tope must go to work when they are sick because they need the money. Besides being unhealthy for the worker, in a fast-food industry, this practice easily spreads disease to customers and other workers creating a chain reaction that can circle back around for a second cycle of infection.

In addition, many speculate that the wage increase is just the first of other demands, such as benefits, including sick pay. Time will tell where this movement goes and if unionizing fast-food workers happens. If the workers succeed in creating a union, they will then have the bargaining power they currently don’t possess to effect industry changes.

Whatever happens, the company will protect its financial status. Whenever a company has an increase in operating costs, it isn’t the company that absorbs the expense, but its customers. That means, if McDonald’s and other fast-food companies agree to pay employees $15/hr, the cost will be passed along the drive-thru line.

What do you think? Should companies like McDonald’s be encouraged to increase their wages?

Image Credits:
(1) loop_oh via Compfight cc
(2) arbyreed via Compfight cc
(3) MSN

Originally published on TopSecretWriters.com

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