McDonald’s Corporation (NYSE:MCD) has collaborated with Visa Inc (NYSE:V) on a website offering financial advice to its employees featuring a sample budget scenario for a full time employee and frankly it’s unreal what they think a person needs to live.
After rent $600, car payment $150, heating and electric $140, car and home/renters insurance $150, health insurance $20, cable/phone $100, there is $100 left over presumably for food and $100 for savings. One can only hope the workers get to eat a meal at one of the two jobs at a discount. And just where are they buying health insurance for $20? This leaves $750 cash for emergencies, like clothing, laundry, medicine, etc.
Don’t kid yourself that we’re just talking about teenagers or college kids, according to the Economic Policy Institute 87.9% of minimum wage workers are age 20 or older. Said budget has no reference to children or other possible dependents.
After controversy over McDonald’s Corporation (NYSE:MCD) workers in Pennsylvania and New York getting paid by fee-based debit cards prompted a front page New York Times story and a class-action lawsuit McDonald’s Corporation (NYSE:MCD) should have been walking on Egg McMuffin shells when it comes to pay issues.Is it just a case of gross insensitivity or just plain ignorance? You be the judge.
McDonald’s Corporation (NYSE:MCD) hasn’t been the best performer of late and if it wasn’t a Dividend Aristocrat would have little to recommend it to potential investors besides sheer size and brand recognition.
However, the worst offender is the nation’s largest private employer, Wal-Mart Stores, Inc. (NYSE:WMT) with its well-publicized decision not to open three Wal-Marts in Washington, DC if forced to pay a “living wage” as determined by the DC City Council.
Although Wal-Mart Stores, Inc. (NYSE:WMT) supported Obamacare, the US Chamber of Commerce denounced their support charging the company was only endorsing it as an anti-competitive strategy. Meanwhile, Wal-Mart Stores, Inc. (NYSE:WMT) enacted a policy which started January 1 stating workers working less than 30 hours wouldn’t qualify for health insurance, raising the bar from the previous 24 hours per week. Full time Wal-Mart Stores, Inc. (NYSE:WMT) workers aren’t any more secure either as coverage for spouses can be lost if hours drop at any time to part time status.
The Washington Post Company (NYSE:WPO) opinion writer Harold Meyerson is not the first editorial writer to point out that Wal-Mart employees make up the highest working poor percentage in many states’ Medicaid and food stamp rolls, noting in Ohio those Wal-Mart Stores, Inc. (NYSE:WMT) employees were closely followed by McDonald’s Corporation (NYSE:MCD) workers. Wal-Mart Stores, Inc. (NYSE:WMT) benefits from over $2 billion worth of government aid to their employees.
The company has been so disingenuous about so many workplace issues from actual minimal chances of career advancement as an internal Wal-Mart document obtained by The Huffington Post proves, to charges of contesting and thwarting the payment of its workers compensation claims.
What it means for investors
Aside from headline risk Wal-Mart’s and McDonald’s policies are making it more difficult for them to expand, especially Wal-Mart, with major cities less welcoming than ever.
In contrast, Costco Wholesale Corporation (NASDAQ:COST) employees are paid very well for retail, averaging $19 and hour garnering it the moniker of the Anti Wal-Mart in a New York Times article. The company has one of the highest employee retention rates in retail.
Communities welcome a Costco Wholesale Corporation (NASDAQ:COST) with its higher paying jobs that don’t force retailers out of business or add to welfare rolls. Wal-Mart doesn’t seem to have gotten the memo.
Complaints of understocked and badly maintained Wal-Marts are growing in the media due to cuts in employee hours and this is another concern for Wal-Mart investors.
