McDonald’s adds insult to injury for its underpaid workforce by partnering with Visa on a bitterly clueless website claiming to help teach personal financial skills. The site combines the usual common-sense clichés of personal finance advice columnists with a Super-sized portion of victim-blaming moralizing and an Extra Large serving of insular, privileged ignorance.
“They start by assuming that you’re working two jobs,” Matthew Yglesias notes of the sample budget, which is based on income from roughly 60 hours a week, “and then that your monthly budget doesn’t include money for extravagances such as heat.”
Or, as Annie-Rose Strasser writes for Think Progress, “While the site is clearly meant to illustrate that McDonald’s workers should be able to live on their meager wages, it actually underscores exactly how hard it is for a low-paid fast food worker to get by.”
The sample budget, Strasser says, “gives wholly unreasonable estimates for employees’ costs: $20 a month for health care, $0 for heating, and $600 a month for rent.”
Consumerist’s Laura Northrup offers a line-by-line evaluation of the sample budget. Of that $600 line item for rent, Northrup writes:
This is a realistic figure in most of the country if you share a home with family or roommates, but not so much if you live by yourself or don’t yet have good enough credit to get a fixed-rate mortgage on a modest condo.
The McDonald’s/Visa budget is utter nonsense without a roommate — at least one — but whoever put this thing together doesn’t seem to realize that. The other line items covering utilities presume an independence that this $600 rent figure does not allow for.
Remember, this budget was designed for McDonald’s employees — designed by people who ought to know some such employees, or at least know where to find them. So the fact that McPay isn’t enough to cover the rent anywhere in America shouldn’t have been a mystery.
The National Low Income Housing Coalition also makes this data easily available in its well-publicized “Out of Reach” annual report. NLIHC takes HUD’s fair-market rent data and works backwards, calculating what someone would need to earn in order to afford that rent. “Afford,” in this case, means that rent accounts for no more than a third of a worker’s monthly budget. The arithmetic underlying this is pretty simple: a Housing Wage is roughly three times the fair-market rent + utilities for a given area.
In 2013, the national Housing Wage in the U.S. is $18.79 an hour — far more than the average wage of renters in the U.S., which is only $14.32 an hour. Here’s NLIHC’s breakdown of the figures for my state:
In Pennsylvania, the Fair Market Rent (FMR) for a two-bedroom apartment is $895. In order to afford this level of rent and utilities – without paying more than 30 percent of income on housing – a household must earn $2,984 monthly or $35,802 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of $17.21.
The combined income of two people both working full time at minimum wage is not enough to afford a two-bedroom apartment in Pennsylvania.
Bottom line: If your monthly budget only includes $600 for rent, then you have to have a roommate or a working spouse. How is it possible that McDonald’s doesn’t know that?
Northrup tries to be charitable in evaluating McDonald’s proposed sample budget for its workers. “Someone meant really well. We think,” she writes. “Unfortunately, whoever wrote these materials had no grasp of what it’s actually like to live on $8 or so per hour.”
But her generosity is strained when she encounters things like that $20/month line item for health insurance:
I don’t know what planet has health insurance plans that cost $20/month, but can I move there? … Plus, insurance is nice and all, but there are these things called “co-payments” that also cost money. The cheaper your health insurance is, the higher those payments will be. Also, I miss those heady days when I was so young and healthy that I never had to buy cold medicine, bandages, painkillers, or cough syrup. Which was never.
Northrup commends the effort for at least offering some “helpful and slightly condescending money-saving tips.”
I think it’s more than slightly condescending, as Strasser noted for Think Progress:
On another section of the site, it concludes, “You can have almost anything you want as long as you plan ahead and save for it.”
Sure. Just get a third job, or a third roommate, and maybe someday you’ll be able to afford community college tuition.
But Northrup also finds the kicker — the thing that pushes all this from merely insulting to outright predatory: “The first page on the navigation bar of this site produced by McDonald’s and Visa extolls the benefits of prepaid debit cards.”
The whole thing, in other words, is a scam. McDonald’s has handed over its employees to Visa, possibly in exchange for a cut of whatever fees and interest rates they can gouge out of those workers by duping them into unregulated cards that charge poor people fees to use their own money. When a McDonald’s employee signs up for a prepaid debit card, Visa is able to skim a cut from every financial transaction that person makes — every line in that awful, clueless budget.
That’s Mickey D’s business model: make up for low profit-margins with massive volume. You can’t get a lot of money by fleecing a single poor worker, but if they all sign up for this prepaid debit card scam, then those nickels and dimes start to add up.