Friday, July 19, 2013

Minimum Wage Woes, Part 2: Real McBudgets

Today is Friday, July 19, 2013.

The other day, CNN Money published an article in which they reminded readers of the recent McDonald's budget flap. The fast food giant showed a generic budget on their website for employees, with advice on how to live on minimum wage.  Like others, I took issue with this generic budget in a recent blog post, which you can read here

CNN Money decided to interview some real McDonald's employees to find out how they live on their McSalary. 

Devonte is working toward an Associate's Degree in criminal justice.  He is 21 years old and works in Milwaukee, Wisconsin.  He works only 25 hours a week, for a total of $525 per month, and has no second job (unless you count studying for a degree a second job – I would.)  He lives with his mother and sister to cut down on living expenses.   His tuition at school is $180 per month, of which he can pay only half.  The school is allowing him to pay less while he is still taking classes, but when he finishes his coursework next semester, the bill will come due, and he's worried about paying up.  

Since he lives at home, his expenses fall mostly in the "other" category, including $40 per month for contact lenses, $50 per month on clothes, and $300 per month on food.  (You will recall that food expenses were left out of the McDonald's sample budget.) 

Christopher is trying to raise two kids on $7.50 an hour.  He makes $1000 a month, which means he works at least 34 hours a week.  He has no second job.  He pays $500 monthly rent, and spends $290 monthly for cab and bus fare.  His kids go to a school that does not provide buses, which is why he has to pay for cab or bus fare to get them to school.  He has no health insurance, and he pays about $100 a month on prescription medications.  (I wonder what they would cost him if he had insurance?)

McDonald's estimated a heating cost of $0 in their generic budget, but Christopher, who lives in Detroit, Michigan, where winters are very cold, pays $45 a month for this.  He pays $55 a month for his phone, and $45 for electricity.  He pays $100 a month on childcare. 

His older son is as big as a professional basketball player, with size 13 shoes.  Christopher pays a lot to keep him in clothing, which he constantly outgrows, and to keep his son's hair cut neatly. 

Basically, Christopher spends about $750 more than he earns each month.  I have no idea how he accomplishes this. 

Kyle makes only $415 per month, and he gives half his paycheck to his daughter's mother.  He keeps his food costs down by eating at McDonald's, which – by all accounts – is not a healthy thing to do.  He struggles to pay for gas for his car and the car insurance bills.  He says he borrows money from friends and family to get by. The article gave no information about how old he is or where he lives.  His picture shows a fairly young man. 

Tyree has worked for McDonald's for 21 years.  He works at two separate McDonald's restaurants in Chicago for a total of only $610 a month.  He pays $320 monthly rent, $56 a month for bus fare, $26 a month for health insurance, $135 a month for cable TV and phone.  He lists "other" expenses as costing $700 a month, which is more than his income.  (Keep in mind that McDonald's failed to include a category for food in its sample budget.)  Besides food, Tyree has to pay for prescription drugs.  

Despite research that shows that adult males make up only 27.5% of the minimum-wage workforce, all four of the workers interviewed for the article were male.  (Adult women make up 48.5%, teenage girls make up 14%, and teenage boys make up only 10% of the minimum-wage workforce total.)  Statistics show that 75% of minimum-wage workers are white, 19.3% are black and 2.6% are Asian.  3.1% are unaccounted for in the statistics I saw, but I would bet they are Native American, Alaska Natives and Pacific Islanders.   In spite of this, all four workers interviewed for this article are black.  I would say that the article tends to reinforce the stereotype of the black male as minimum-wage earner.   :-/

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