Fast-food giant McDonald’s is under fire after a financial planning guide for its staff inadvertently illustrated that survival on the company’s average wage would mean a Spartan, if not impoverished, existence. Nevertheless, the guide may offer some useful tips.
The biggest target of criticism is the presumption built into the guide’s sample monthly budget that an employee will have a second job. It gives a $2,060 monthly income: based on a “first job” paying $1,105 and a “second job” paying $995.
Number crunching bloggers noted that the $1,105 figure is what a person would receive working 40 hours a week for McDonald’s at the company’s average US$7.72/hour wage, after accounting for payroll taxes.
As well as a second job, it also assumes monthly mortgage/rent of $600, car payments of $150, insurance of $100, zero expenses for heating, $100 for cable/phone service and $90 for electricity and $100 for “other.”
“McDonald’s needs to be commended for at least making an effort,” said Frank Wiginton, CEO of Employee Financial Education Division (EFED) in Toronto. “McDonald’s is saying ‘we recognize that we pay people very little money, so let’s see if we can figure out a way to provide these people with additional resources and materials to improve their situation’, which is far and above what most companies do.”
While critics are using the guide to bash McDonald's, it does offer useful advice for young people who work at the restaurant as a first job: look for ways to save money, use public transportation or carpool, plan meals in advance, borrow from the library, shop with a list, pay debts as quickly as possible, avoid ATMs outside of your bank’s system, and open a savings account.
“That’s about all they can really [offer]. They’re not in the financial advisory industry and they could open themselves up for liability if they went beyond just general information," said Wiginton.
And although minimum-wage workers would fall beneath the requirements of advisory services, the guide also suggests that employees seek help in money management.