Stephen Colbert made fun of the McDonald’s hypothetical employee budget on the July 22, 2007 Colbert Report. The budget referenced is available here: http://www.practicalmoneyskills.com/mcdonalds/. And from the booklet I downloaded:
I can only hope the suggested budget is not meant to be a real guide for employees. A couple observations:
- I think having a second income is a reasonable assumption. It would either come from the other spouse working, or the employee working more elsewhere after maxing out 40 hours at McDonald’s.
- Two spouse working 40 hours a week each earning a net wage of $5.94 per hour will get to $2060 – the hypothetical income in the McDonald’s example. From the reference here (http://www.minimum-wage.org/wage-by-state.asp; data possibly unreliable, but seem roughly right), the full minimum wage is about $5.15 in Georgia to $8.95 in Oregon.
- If the $2060 comes from a 40 hour work week instead, that would imply a net hourly wage of $11.88 ( = 2060*12/52/40). If the $2060 comes from 1 employee working a second part time job – say totals to 60 hours per week – then the net hourly wage falls to $7.92 in net hourly wage.
- Why isn’t food a separate category? All frugality/budget books I have read start off the budgeting process by focusing on food, insurance, and transportation (F.I.T.). That is because, besides housing, those three items are usually the biggest part of American spending.
- I hope the suggested budget of $20 for health insurance reflects the cost of insurance premium paid by actual McDonald employees. That seems low.
- As Stephen Colbert had pointed out – it’s strange to have $50+$90 = $140 for energy needs. But I live in a place with very mild temperature in all seasons.
CNN actually ran an article on actual budgets of employees (link here: http://money.cnn.com/gallery/news/economy/2013/07/17/mcdonalds-worker-budget/index.html). Note that the monthly net income for the employees showcased are: $525, $1000, $415, and $610 – all below the $1105 amount on the McDonald’s example.
It would have been nice if CNN also run an article on actual budgets of employees that *do* make ends meet. It would require reducing consumptions of some times to limit spending, or having two working spouse (or an extra job) to increase earnings. That would make for a more useful news article.