Reporter's Notebook

Deficit of good options

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Is McDonald’s “Practical Money Skills Budget Journal” well-meaning, or is it patronizing? Out of touch, or realistic? Providing a bare minimum of personal-finance education, or justifying low wages?

The answer, I would argue, is irrelevant; it’s an argument nobody can win.

I suspect McDonald’s did not mean for the “Practical Money Skills Budget Journal,” which has been derided via social media and press outlets like “The Today Show” since people got wind of it earlier this week, to be controversial when it developed the document with Visa and Wealth Watchers International. The Oak Brook, Ill.-based company is sincerely proud of its record of career advancement in which crew members can ascend to managers and owner-operators to corporate executives, and it works very hard on its employment brand to fight back against the “McJob” perception.

Yet the sample budget is now part of our short-term zeitgeist — this “McBudgeting” video from Low Pay is Not OK has nearly 100,000 views and is embedded in posts on many of my favorite blogs, like Gawker — and it has opened up a new front in the argument over the minimum wage. That’s unfortunate for McDonald’s and unhelpful to policymakers, because this will just perpetuate a shouting match with little discernable chance for progress.

Yes, there are some flashpoints in that sample budget that rile up my liberal populism that I often have to keep in check as a business journalist. As Wonkblog’s Timothy B. Lee pointed out, the budget’s assumption of $24,720 per year for the hypothetical McDonald’s employee requires 75 hours worked per week at the $7.25 minimum wage or 55 hours per week at $10 per hour. Hence the assumption that the crew member must work a second job. He also noted that $20 for health insurance on the sample budget was hard to defend, as was the original $0 line item for heat, which the company has amended to now run about $50 per month.

Personally, I blanched at the absence of money for child care, which rendered the budget unrealistic for many hourly workers in my view. Lee’s defense of the budget as “realistic” is technically true, provided that we also concede that, while getting by on minimum wage is possible, it nonetheless is extremely difficult and involves trade-offs we all work to avoid.

But no, progressive as I consider myself to be, it does not win me over to the argument that quick-service restaurants like McDonald’s fail to pay a “living wage.” Having covered the industry for eight years now, I more readily recognize that low-margin businesses like restaurants can’t dramatically raise their wage rates overnight, lest the possibility of an $8 Big Mac crater traffic and sales at my local McDonald’s and thus bring about the closure of that restaurant and the elimination of its jobs.

Can we declare a winner in this ongoing argument between Low Pay is Not OK and its allies advocating for a $15-per-hour minimum wage versus giant corporations like McDonald’s? Not definitively. Neither side can be dismissed out-of-hand as completely wrong, because it should give us pause if one job’s wages often don’t cover many basic expenses, just as it should if large across-the-board raises to those wages might result in unworkable price points.

My unsolicited advice for McDonald’s would be to increase the focus on the parts of its employment brand that have undeniably helped it over the decades, such as the path to advancement from crew member up the corporate ladder, educational opportunities like Hamburger University, and profiles of successful former unit-level staff like Carl Lewis and Jim Skinner.

Trying to walk back the sample budget doesn’t make sense if, as I believe, it was a well-meaning attempt to give workers some kind of helpful resource. (What sense would it make for a company to knowingly shame its lowest-paid staff?) Plus, that genie can’t be put back into the bottle anyway, and I don’t think there’s a sizeable number of supporters that will mobilize into an “appreciation day” in response to this controversy.

The minimum-wage debate is an unwinnable one for McDonald’s alone — and trade associations exist to fight those battles on behalf of restaurant companies anyway — so the brand can either retrench and wait for this issue to blow over, or do more to tout the positives of its employment brand.

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