The McDonald’s McBudget Program Belonged in The Onion

Sean Kernan

The doctrine of profit maximization faces its most difficult ethical tests at the edges of the business matrix.

You see it in investment banking where acquiring companies force draconian cost cuts to produce an unsustainable projection. Then they sell the company under an illusion (wait until the day the difficult horse behaves, then sell it).

On the opposite edge, you have McDonald's. The company is synonymous with cheap, unhealthy food and cheap, unhappy labor. Yet if you are an investor in McDonald’s, you’d be most pleased. years stock chart. (Source: pic via Yahoo Finance)

As a business entity, they’ve made admirable changes to buckle down efficiencies, integrating technology to improve their speed and costs. But one problem remains.

The seeds of unrest

Any dolt with half-a-wit knows you can’t sell huge meals for $5, and also pay your ground-level employees $50,000. But it invites the question, how do you deal with a massive, bottom-pay workforce?

Unsurprisingly, McDonald’s is often at the roiling center of the minimum wage debate, which manifests in very public labor disputes. They’ve tried myriad tactics to quell the image problem it creates. In fact, in the throes of such crises, I’ve even been approached to write positive articles about the McDonald’s employee experience by various PR intermediaries.

In 2013, fast-food protests were at a peak. In cities across the country, they were advocating for a raise on their $8.25/hour. Their CEO’s annual pay package, consistently north of $10 million, and the company’s annual profits above $5 billion, only inflamed their anger. via Chicago Tribune

As part of their plan to quell unrest, McDonald’s made a grand announcement that they’d partnered with Visa to provide a financial counseling system to their employees. Unfortunately, it was gloriously underwhelming. It included no professional advising. It was just a document, a booklet, and

The document only highlighted management’s condescension and total disconnect from the realities of the working class

This is a real-life document

They blasted out this sample budget, a McBudget. It was presented and reviewed by each franchise’s management with employees. The intention was good. But it made a lot of very generous assumptions: pic via AFL-CIO

Namely, the budget straight up tells employees they’ll need a second job to survive. The $20 healthcare figure would only work with a time machine and the aid of deflation (also, most employees aren’t provided healthcare). Notably, it doesn’t mention food. That just goes into the $27 catch-all line item. If you decide to have any fun, go on a date, go to the movies, kiss your budget goodbye. The $600 rent assumption is mostly non-applicable unless you live in rural Arkansas. Also, make sure you live in a warm climate because this budget has no room for heat.

It’s a troll document. If someone handed it to you, alongside a McDonald's paycheck, and told you the world was cheaper than it is, you’d be pissed too.

It was instantly hailed has “hilariously obtuse” by media outlets, drawing fire from various platforms.

In an attempt to draw down tensions, Steve Caldeira, President of the International Franchise Association (all McDonalds are franchises), argued, “The minimum wage was never meant to be a living wage. It was meant, from the start, for entry-level workers and for those with lower skills.”

While harboring some truth, this position ignores socioeconomic complexities, and that 50% of fast-food workers are over 30, with many being disadvantaged and minorities.

And the fact remains: people still work there. McDonald's has economized cheap labor to win a hardlined price war. They’ve created a huge industry that gobbles up labor markets. And when 52% of your workforce is getting government assistance, something seems wrong. Those costs are passed along to taxpayers, to the tune of $153 billion (alongside Wal-Mart).

The McBudget wasn’t the answer.

But what can you do?

As a business owner and former graduate student, who was indoctrinated in the merits of capitalism, I’m well aware of the need to manage costs, the risk of externalities, and the base desire to keep money in my own pocket. But this should always be counterbalanced by a sense of humanity, and a wanting to do right by people.

Maintaining a large scale low-wage operation is no small task. McDonald's deserves credit for such compelling success in this category.

I don’t know that we can ever expect massive pay raises for their workers. It would cause an uproar with struggling franchises. Conversely, switching to a high margin luxury burger business would be a total transformation that, as an operational idea, is equitable to science fiction.

Yet one can’t help but think they could do more. Just give them something. macrotrends pic

There are myriad ways to empower employees that don’t involve throwing money at them: building a team-oriented culture, providing great communication, a good work environment, acknowledging the individual, some sort of discount program.

No, these strategies won’t do away with recurring problems of a bottom-feeding pay-model. But they can make those problems get smaller.

The McBudget was a tell-tale lesson, an idea deserving of an article in The Onion. It was akin to punching someone in the eye and then emailing them a closeup photo of the bruise.

Put more bluntly: don’t offer an employee perk, in the middle of national wage protests, that only draws more attention to the biggest stigma of your workplace: that you’ll be dead-ass broke and everyone will know it.

Also, if you’re going to give employees a sample budget, at least put a bit more thought into the document. Your numbers shouldn’t be generated from a nonsensical excel formula(=randbetween(iwish,BS)).

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