Fast-food giant McDonald’s is receiving brickbats 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.
“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,”
The biggest target of criticism is the presumptions built into the guide’s sample monthly budget. 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 final figure is close to the $1,000-$1,100 a person would receive working 40 hours a week at McDonalds at the company’s average $7.72/hour wage, and 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.”
While critics are using the guide to bash McDonalds, 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: “Discuss your financial goals with a friend. You’re much more likely to reach a goal if you share it.”