Three months after McDonald’s Corporation (NYSE:MCD) was caught up in an embarrassing mini-controversy over its employee personal finance guide, the world’s largest fast food chain -- which reported $5.5 billion in income and paid out $2.90 per share in stockholder dividends last year -- might have another problem. Her name is Nancy Salgado.
What was probably a well-intentioned but tone-deaf effort to assist its legions of low-wage line cooks and cashiers in the U.S. find ways to make ends meet on their increasingly low hourly salaries, McDonald’s may have just inadvertently pushed itself back into the limelight of controversy. A labor rights group has distributed what it says is a recording of a Chicago-area McDonald’s employee being advised by the company to seek out food stamps and Medicaid benefits to help her financial situation.
This issue is hot right now after economists at the University of California at Berkeley’s Labor Center and the University of Illinois released reports last week estimating taxpayers shell out $7 billion a year to supplement the incomes of as many as 1.8 million fast food employees whose wages aren’t sufficient to cover basic needs.
The labor rights group Low Pay Is Not OK says Salgado, a mother of two who is making the same $8.25 an hour wage she was offered when she took the job 10 years ago, called the company’s McResource Line aimed at pointing workers to services such as childcare, education and legal advice. Here’s the transcript of the conversation:
McDonald’s: This is the McResource line. How can I help you?
Salgado: I’m Nancy. I wanted more information about some help that I need.
McDonald’s: I can give you a number that will be helpful. You can ask about things like food pantries. Are you on SNAP? SNAP is supplemental nutritional assistance program – food stamps. Do you have kids?
Salgado: Yeah, I have two kids.
McDonald’s: You would most likely be eligible for SNAP benefits.
Salgado: I’m rationing food – I didn’t know about this.
McDonald’s: You know. It’s a federal program. The federal money comes down to the states and the states administer it.
Salgado: What about, like, the doctor…
McDonald’s: Did you try to get on Medicaid? Medicaid is a federal program. It’s health coverage for low income or no income adults and children. Let me find the number that you can call in Chicago to find help with all of your questions.
By the way, that $8.25 an hour wage Nancy reportedly accepted ten years ago? It’s worth $6.49 an hour today when adjusting for the rising cost of living in the U.S., according to the Bureau of Labor statistics' estimates comparing today's dollar with 2003's.
Note: The conservative Heritage Foundation wrote in a profile of poverty in America in 2011: "Among families with children, the collapse of marriage and erosion of the work ethic are the principal long-term causes of poverty." The influential think-tank points to the high percentage of white goods and consumer-electronics ownership and Internet access by America's poor. "Real material hardship," it states, "is limited in scope and severity." For the real, grinding poverty, the Heritage Foundation points you to developing nations and Africa. Read the full report here.
Also, if you haven’t found the recording of the phone conversation by now, here’s the video: