On Thursday, August 29, fast food workers in over 50 cities walked off the job, demanding a living wage (around $15/hr) as well as the right to unionize. While not the only workers to strike, those from McDonalds have attracted particular attention because of an incendiary budget released by McDonalds in early July. In this budget the company demonstrated how their workers could support themselves—and even afford health insurance—on their $7.50/hr salary. So what’s the problem?
The issues lie in McDonalds’ methodology, which are completely unrealistic. McDonalds predicates their rosy conclusion on a worker having two full-time jobs. For health insurance, the company presumes that premiums are $20 per month, when the national average is closer to $215. Groceries? Not included. Childcare? Nah. Gas for a worker’s commute? You get the picture. An early version of McDonald’s assessment said that heating is affordable for workers—so long as heating costs were zero dollars per month.
The vast majority of people working these McJobs aren’t teenagers living with their parents for the summer, but “are in their 20s and older, and many of them are raising families.” McDonalds’ tone-deaf budget and basement wages are emblematic of an economic crisis in the United States, the most visible symptom of which is in an ever-growing gap between the rich and the poor.
According to a study by the Economic Policy Institute, worker compensation has grown by 5.7% between 1987 and 2011 while CEO compensation has gone up 725% in the same time period. A McDonald’s employee would have to work 550 years to earn what McDonald’s CEO James Skinner made in 2012. Think about that the next time you hear someone say that everyone can pull themselves up by their bootstraps, if they only try hard enough. Or that people are paid what they “deserve”.
The arguments against the living wage are about economics rather than humanity. That raising the minimum wage to $15/hr would cost McDonald’s 8 billion dollars in the first year (a figure equivalent to McDonald’s 2012 pre-tax income) and that “McDonald’s investors would see a devastating impact” are neither convincing nor necessarily true. Setting aside that $15/hr is partly a bargaining tactic, the wallets of investors do not matter more than the lives of workers. A company should not be profitable if it can only attain that profit by disenfranchising a group, especially if that group is already marginalized.
Low wages go hand-in-hand with other fast food related problems. In low-income areas, fast food can be the only meal choice available. In these “food deserts,” fresh produce is a rarity and high-fat, high-sugar food dominates the dinner table. It must be convenient for a company to pay wages that keep its employees in poverty when groups living in poverty-stricken areas make up a large chunk of its consumer base. How much of a McDonalds employee’s paycheck is spent on fast food? That is, if they can even afford food at all. Wages are so low that McDonalds employees are often forced to “choose between food and rent,” as one said. While raising wages would mean raising prices, with the cost of a Big Mac jumping an addition $1.28 to $5.27, the cycle of poverty and obesity has to break and providing a solid income for workers could be the beginning.
The case of the living wage seems to be one of acute market failure. If the market cannot support a $1.28 price increase in order to allow employees to have a decent quality of life, the market if failing. If there are no other affordable, healthy food choices available, the market is failing. When McDonald’s and its franchises spend “$960,000 to fight minimum-wage increases in six states” while those most affected will never see much that money in their lifetime, the market is failing. People may argue that this market “works” and that any change would only have a negative outcome—but that’s not true. The market is functional, but it is a failure.
While individual franchises are responsible for setting their own wages, a message bigger than McDonald’s must be sent. Show your solidarity with the workers, and don’t support franchises that disenfranchise their employees. At the McDonald’s on Penn’s campus, I’ve seen drunken fraternity members treat employees with a disrespect that is indicative of a lack of empathy, a lack that allows many to ignore the horrible conditions McDonald’s wages force upon their employees.
Avoid this culture of blind entitlement. Be old-fashioned, and put pressure on your local congressman. President Obama has already come out in support of raising the minimum wage. Around 70% of the population supports such a raise. Change is attainable. Low wages are another thing that makes eating at McDonald’s unhealthy, for you and for the one cooking your meal. Skip the Big Mac.