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Friday, August 30, 2013

The McDonald's Dilemma

Yesterday was the day that McDonald's employees, accompanied by other fast food workers, walked out to protest for higher wages in cities across the country.  Currently, they start at the minimum wage of $7.25 per hour and they are asking for $15 per hour. 

For a teenager living at home, going to school and working part time at McDonald's, minimum wage is OK.  That was the original model for fast food workers and Chick fil-A still seems to use that model, while others have expanded the pool of fast food workers.  This must be the job growth being touted by today's politicians.  What is surprising is that of the 21 million fast food workers, 88% are 20 years of age or older.  Actually, the average age of today's fast food worker is 35 years old.  Wow!  (McDonald's says it's 50%.)  Living in a large city like New York is extremely expensive and a 35-year-old supporting a child or two and a spouse can't live on minimum wage.  Now McDonald's says that very few of their employees are paid minimum wage. 

The dilemma is that McDonald's et al can't raise their prices enough to support a $15 an hour wage rate based on the product that they sell.  It just so happens that last night as I was traveling I stopped at McDonald's.  It was getting late and I had to eat something.  There were little to no options based on where we were traveling so that was the only option for eating.  When I got in line, there were three people ahead of me and about a dozen waiting for their food.  I thought that those who were waiting must be waiting for French fries or special orders, after all this is "fast food."  Not the case.  I ended up waiting a half hour for basic McDonald's food.  It was so pathetic, it was funny.  No one could believe that they were waiting this long. 

There were five employees working (with ages ranging from mid-twenties to early forties): a manager who was handling the counter, a woman handling drive thru, a woman assisting both of them and two guys preparing the food.  I felt sorry for the manager, first of all, because she shouldn't be managing anything. She was running around getting very little accomplished and the two guys in the back were arguing with her over orders, telling her pretty much to shut up and let them do their work.  Their work consisted of a prepared sandwich or its equivalent coming out every three minutes.  One woman asked how long I had been waiting and at that point, it was 25 minutes.  She asked for her money back and left.  I was dressed in a shirt and tie so I stood out in this predominantly blue collar venue, but I made a lot of new friends.  Actually, most eyes were on me for those 30 minutes and I was being watched for my reaction while I waited.  I was calm, smiled throughout the ordeal and talked, even joked, with some of those waiting.  When my food was finally handed to me by the manager, who apologized profusely, I thanked her, wished her a pleasant evening, said good-bye to my new friends and left. 

So, therein lies the problem; these are low skilled workers demanding a higher wage rate for a product with declining service delivery that customers will not pay a lot more money for.  McDonald's needs to change their approach to hiring and dramatically reduce their average age of worker or pony up to that higher wage rate.  Not an easy problem to solve, but they got themselves into this mess.

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