Back To Career News

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.

Do You Know What You're Worth?

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

What do you think about the McDonald’s budget planning tool? We want to hear from you! Leave a comment or join the discussion on Twitter.

More from PayScale

McDonald’s Requiring Bachelor’s Degree

Low Wages in the Fast Food Industry Are Bad for All of Us

How the Recession Replaced Mid-Wage Jobs With Low-Wage Jobs


(Photo Credits: Allan Ferguson)

Jen Hubley Luckwaldt
Read more from Jen

Leave a Reply

4 Comment threads
0 Thread replies
Most reacted comment
Hottest comment thread
1 Comment authors
TimAnnspCN Recent comment authors
newest oldest most voted
Notify of

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… Read more »


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… Read more »


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… Read more »


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… Read more »

What Am I Worth?

What your skills are worth in the job market is constantly changing.