Sizing up the McConomy


Fifty-thousand people will get jobs in one day later this month.

The jobs will be at McDonald’s, which announced today that it will hire the workers on April 19.

On the surface, it’s quite a numbers story in the company news release:

* McDonald’s and its franchisees will spend more than $518 million more in wages and salaries in the coming year, an average of more than $1.4 million every day.

* More than $41.5 million in training will be invested in the company’s new workforce – instilling life-long business and customer service skills as well as setting employees up for success in current and future opportunities.

* The addition of 50,000 potential hires translates into $54 million more in payroll taxes contributed to the broader economy.

* Using a statistical multiplier effect, 50,000 new workers will generate almost $1.4 billion in annual spending – more than $3.5 million per day.

$1.4 billion works out to $28,000 per year.

The angle that the McDonald’s president is pushing is this one:

..the average pay for the new positions will be $8.30 per hour, higher than the federal minimum wage of $7.25 per hour.

The natural conclusion is that McDonald’s is paying more than minimum wage to its people, the bulk of whom are the customer service people and cooks. But the figure includes the restaurant managers who will also be hired and, according to McDonald’s, they can make up to $50,000 a year.

The company doesn’t say how many of the 50,000 jobs are managers.

Are 50,000 fast-food jobs a sign of a recovering economy, or a sign that it’s not recovering very fast?

The company’s national hiring day mirrors one it had on the West Coast last summer.

“It’s hard to be choosy right now,” Serena DiPiero, 48, of Sacramento, told the Sacramento Bee at the time.

  • JackU

    Bob, your math is off. The $1.4 billion is a statistical multiplier. Looking more closely you find out that most of those jobs will be part time. Possibly less than half time. Here’s how I get to that conclusion:

    Fact 1: than $518 million more in wages and salaries in the coming year

    Fact 2: ..the average pay for the new positions will be $8.30 per hour, higher than the federal minimum wage of $7.25 per hour.

    Given these facts the following calculations determine that most of these jobs will be less than full time. Therefore not being eligible for benefits like health care or providing enough for an individual, much less a family to live on.

    1. Divide $518,000,000 by 50,000 employees: $10,360/employee in wages and salaries.

    2. Divide $10,360/employee by $8.30/hr average: 1,248 hours/employee

    3. Divide 1,248 by 2080 (40 x 52 for fulltime): 0.6 or 60%

    So on average these workers will be working 60% of a full time load. Since some people will be working full time, then many more will be working less than that.

  • Brian

    Sadly, I think that this sort of job growth is what constitutes a recovery in America. We’re paying forth too much in the way of energy costs to truly invest and grow the economy by exploring new energy sources and building an infrastructure to support anything to eventually replace fossil fuels. I guess we need to just buy another #1 value meal and be thankful that McDonald’s employs millions of people to fuel our obesity.

  • tboom

    I hate the concept of low-wage, no-benefit, part-time jobs.

    That said, I wake up every day grateful to have been was laid-off in the “last recession before the depression” (2001). Also grateful to the local garden center which provided me a financial bridge in the form of a low-wage, no- benefit, part-time job which allowed me to put food on the table. It took me a year and a half to discover I’d never again have a high-paying job and an additional year to get a technical school degree. That low-paying job was critical. I’m now making about half my salary of ten years ago, but I’m so fortunate and grateful to so many people who have helped me in both small and big ways (including the owners and managers at that garden center).

    — Warning, opinionated rant to follow —

    So, here’s a little advice. Looking at that picture, I’m not sure anybody in the picture REALLY WANTS a job. All I see in that photo are jeans and t-shirts. I may risk turning off a few hip and modern hiring managers, but I almost always wear a suit to apply for ANY job. Here’s my 2 cents: LOOK LIKE YOU WANT A JOB. At the very least wear khaki slacks, shoes NOT made for playing sports, a nice shirt (tucked into your waist) and for *** sake take the damn sunglasses off your head. (And when you finally do get a job treat it like a job, not like an extension of your social life.)