Economy

The Bizarre, Shania Twain-Based Argument For Keeping McDonald’s Wages Low

CREDIT: AP

Shania Twain at the 2014 Billboard Music Awards

It’s a good thing for pop music, honky-tonk feminism, and Canadian tax collectors that McDonald’s pays lousy wages. If the food stores paid their frontline workers enough to survive on, Shania Twain would still be working there, a shareholder claimed at the company’s annual meeting this week.

The unidentified man, who said he’d been a McDonald’s investor since 1990 according to BuzzFeed News, used a Q&A session to rattle off a list of successful celebrities like Twain, Amazon’s Jeff Bezos, and Hollywood star Sharon Stone who had worked in a McDonald’s earlier in their lives. “I’m sure if they were making $15 an hour, they’d still be working at McDonald’s,” he said, as thousands of current McDonald’s workers protested outside.

Twain has now been making music professionally for about as long as the anonymous commentator has held McDonald’s stock. But in high school, the future star worked at an Ontario McDonald’s. “I learned tons about the meaning of service there,” she told Time in 2002. As an elementary school-aged kid, she’d been singing in talent shows and open mics.

Twain’s parents were killed in a car crash when the singer was in her early 20s. She kept singing, now at a vacation resort, to support her three younger siblings. By 1991, she had a small contract with a Nashville country label. Her second album and subsequent hits made her a superstar by the late 1990s.

It is of course possible that the orphaned college-aged Twain would have stayed in the hamburger business instead of pursuing her musical talent. Attempts to contact Twain’s representatives were unsuccessful.

The minimum wage in the early 1980s in Ontario was about $2.85 an hour, in American dollars, which had the same buying power as $6.72 per hour today. McDonald’s recently committed to paying at least $1 above the local minimum wage in the roughly 10 percent of store locations that it directly controls, meaning that many of the company’s workers are already earning well above what Twain did even after adjusting for inflation.

It’s hard to fathom how moving those workers up to $15 an hour would generate such a comfortable living that frycooks with enough star power to get them noticed would instead settle for a career inhaling grease fumes. Someone working full-time without vacations at $15 an hour would earn about $31,200 per year, before taxes. But to survive for a year in Green Bay, Wisconsin — a blue-collar town across the Great Lakes from the mining town where Twain grew up — a family of two would need roughly $48,000 per year in income according to the Economic Policy Institute’s Family Budget Calculator. For the sort of household Twain lead after her parents’ deaths, with three children and one head-of-household, it’d take about $89,121 a year to afford housing, child care, health care, taxes, food, and transportation for the year in Green Bay.

$15 an hour wouldn’t support a family, then, but it would mean that McDonald’s workers could stop relying on food stamps and other public assistance programs. The company is only able to pay wages so far below the cost of living because anti-poverty programs are there to step into the gap. McDonald’s low wages are effectively subsidized by taxpayers to the tune of millions of dollars per year.

The shareholder’s broader argument — that McDonald’s is a stepping stone rather than a career, and that it pays accordingly — is similarly flimsy on the evidence. Low-wage jobs like these are far more likely to be a dead end than the opening stride up the career ladder. The common perception that most fast food workers are young people just starting into the job market is incorrect. Most are adults, not dependents making extra money over the summer to mollify their parents. And a full 20 percent of all American children has a parent like Alicia McCrary who works the kind of job that would benefit from a higher minimum wage.

McDonald’s is undeniably aware of how far away from economic security it leaves its people. Until recently, the company maintained a public website with a sample budget for workers that included such fanciful projections as spending $0 on heating a home and getting health insurance for $20 a month. It has also recommended that struggling workers sell their Christmas presents for cash to make ends meet.

McDonald’s continues to hold out against protests, strikes, and legal challenges to its business model after more than two years of sustained worker agitation for the higher wage and union representation. If the company won’t go to $15, the $15 hourly wage may come to it. This week, Los Angeles became the second American metropolis to adopt the $15 minimum wage, following in Seattle’s footsteps from last year. State and local governments elsewhere have been raising their minimum wage laws significantly in recent years as well. The momentum for significantly higher pay in service-sector jobs has already induced some major retailers to voluntarily raise their pay in the same limited way that McDonald’s has done. Competitors from Costco to Wegman’s to Seattle-area burger chain Dick’s Drive In have built their business model around paying a living wage and valuing workers as an asset rather than targeting them as a cost-cutting opportunity. And while fast food companies sometimes protest that they couldn’t afford to do business at a $15 hourly wage, that argument doesn’t impress economists much.