A quick note about that McDonald’s budget for its employees published earlier this week by the website Think Progress ….
There is a genre of personal finance writing I like to call “when rich people tell poor people how to live.” This is when, as I’ve reported in the past, you see men and women in designer suits go on CNBC, and rant about how if the poor people just managed to eschew flat screen televisions and smart phones, their financial problems would be solved. Never mind a living wage, all you need to do is figure out how to live within your means. And if your means are a $7.25 an hour minimum wage job, so be it. Those millionaires know you can do it!
I took this argument apart in my book published earlier this year, Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. I highlighted such people as latte factor originator David Bach, who is convinced that our daily coffee habit and other small gimmes are driving us into financial desperation. “The so-called small things on which we waste money every day can add up in a hurry to life-changing moment,” he once wrote.
This animus also drives the financial literacy movement, which posits that our financial problems are not a result of an increasingly shaky economy for all too many people, or a ratcheting up of the complication of many bank-based products that seem almost hardwired to trip people up, but instead insists our personal financial ignorance is the cause of our woes.
Yet the people who designed the McDonald’s sample budget are the ones likely in need of financial literacy class. It is filled with so many whoppers (pun intended!) that bloggers have been going at it for the better part of a week with no end in sight. There is the absence of budget line items for children, heat in the winter and, my personal favorite, food. Then too there is the budget writer’s odd insistence that health care should cost a mere $20 per month, a number that was highly unlikely be true in 1993, never mind 2013.
Finally, there is the fact that even the site’s designers admit this much ridiculousness can’t work unless the fictional worker holds down two jobs – something they should know is an impossibility, since many McDonald’s franchises are known for not committing to schedules much in advance, which essentially ensures employees need to give a full-time commitment in return for part-time wages.
McDonald’s workers suffer financial woes for a simple reason, and it’s not financial ignorance. It’s that their salaries all but doom them to a life of poverty. If the minimum wage had kept up with gains in worker productivity, it would be more than $20 an hour today.
In fact, most of us are falling behind. While the New York Times reports CEO pay is up by 16 percent in 2012, the Bureau of Labor Statistics reported that wages fell 3.8 percent in the first quarter of 2013, the largest decline on record. Nonetheless, the Grand Poobah’s of personal finance continue to judge. Take Today show contributor Jean Chatzky. She went on Morning Joe earlier this week to discuss the McDonald’s budget. Yes, some of the numbers mentioned were “crazy” and living on the minimum wage is “just not workable” but don’t forget, the corporate giant was “well intentioned.” Besides, whose fault is it anyway if you can’t do better than a job flipping burgers? “People who are stuck, essentially, in these minimum wage jobs also need to be asking themselves ‘what can I do to get out of this,’” she said.
One last word: It’s easy to make fun of McDonald’s and site partner Visa for this one, too easy in fact. Among other things, it lets all of us off the hook for indulging in this sort of talk, for wondering why all those other people need to own cell phones and cable television the occasional pair of designer sneakers when, in fact, almost all of us possess such things. So a suggestion: the next time you are tempted to bitch and moan about someone frivolously spending their money, you might want to recall it’s not the little luxuries that are bringing us down. It’s that our salaries are not keeping up.