Whoops! McDonald's Accidentally Illustrates That It's Impossible to Live on Minimum Wage

What's the best way to help minimum wage workers manage their finances? If you said, "design a financial planning site that presumes they work a second job and don't need groceries," you have a bright future ahead of you designing financial planning sites for McDonald's employees.

The Practical Money Skills site, which was developed in cooperation with Visa and Wealth Watchers International, provides a budget journal for workers and assumes that they make $7.72 an hour, which is the salary of the average McDonald's cashier and slightly higher than the federal minimum wage of $7.25. (The Atlantic points out that 19 states and the District of Columbia have set their minimum wages higher than the $7.25 floor.)

Let's do some math. If a cashier makes $7.72 an hour, and works 40 hours a week, 52 weeks a year, he or she earns a yearly salary of $16,057.60, before taxes. That puts them at just above the federal poverty threshold of $15,510 for a family of two.

"Hang on a second," we hear you say. "Why a family of two?" OK, good point. If it's a family of one, then our hypothetical cashier is doing swell compared with the federal poverty threshold of $11,490 for one person. But we can be forgiven for making the leap. After all, it seems that McDonald's did when they put together their budget.

sample budget

That's right: This budget, which assumes an after taxes take-home pay of $1105 per month, also assumes that the worker will have a second income. Also that their heating bill will cost a total of zero dollars and zero cents per month, that they can buy groceries out of their $27 a day spending goal or their $100 monthly allotment for extras, and that their health insurance costs $20 a month.

"Now, it's possible that McDonald's and Visa meant this sample budget to reflect a two-person household," writes Jordan Weissmann at The Atlantic. "That would be a tad more realistic, after all. Unfortunately, the brochure doesn't give any indication that's the case. Nor does it change the fact that most of these expenses would apply to a single person."

Tell Us What You Think

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(Photo Credits: Allan Ferguson)


  1. 4 sp 03 Aug
    These budgets are developed by people who never had to work hard in their life. Their parents paid for their college, paid for their first car..etc.. Its hard to understand what people are going through unless you walk in their shoes. People who are handed things in life, never, ever appreciate that they got a head start in life. Can you get ahead in life? Yes, but its a slow process unless you are given something in life that gives you a break. Some people are not that blessed.
  2. 3 CN 29 Jul
    When I worked for McDonald’s we earned less than minimum wage.
    The majority of workers were high school age.(16-18)
    The only full time employees were the three managers and a night time janitor.
    As teenagers we were not allowed to work more than 35 hours a week in summer and 20 or so hours during the school year.
    We understood that unless we were looking to become
    management we would never earn more than minimum wage.
    This story fails to mention who’s salary, manager or associate, and what part of the country are they are reporting on.
    People working full time in such an establishment should
    closely examine their future career paths.
    If they aspire to be employed in this sort of work, they
    should be seeking management type positions.
    Otherwise expect minimum wage, we did, that’s what fast food jobs are for.
  3. 2 Ann 26 Jul
    I used a format like this w/ my high schooler as a reality check @ $10.00/hour, 40 hrs/week. I took out for taxes & co. supported healthcare, used local paper for rental costs, no cable,no phone, no extras and ended up w/ $76/month for food, transportation, personal items. 1. many companies are hiring PT to save  on paying benefits.2. there better be a job in walking distance or there is public transportation(free, ha!) etc.  I think he sees the point of working hard in school & being entrepreneurial now.
  4. 1 Tim 25 Jul

    This would be great if it was 1988 and inflation was 0%.  But that still leaves a few problems.  I'm not sure what planet you can purchase healthcare for a $20/monthly premium.  Maybe Dental and or Vision but certainly not medical coverage.  My heating, electric and utilities are $200-$600/month in my tiny 1000 sq ft house that has updated windows and insulation.  Unless you drive like Fred Flinstone I'm sure you will have to buy gas and vehicle maintenance.  The $27/day for groceries is however believable.  I believe McDonalds Corporation made an honest attempt to help the minimum wage worker find light at the end of the tunnel, but what this really tells me is how out of touch with reality those who employ these workers are.  I'm married and my wife and I each pull in an average of $50/hr each and with two kids, a mortgage and lots of student loans.  We are still living paycheck to paycheck.  I could not imagine this plan working unless people are living cohorted or in their parents basement.


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