McDonald's Blames Outside Groups for Controversy
McDonald’s, and other fast-food operators like Burger King Worldwide Inc. (NYSE: BKW) and Yum! Brands Inc. (NYSE: YUM), have been the target of protesters seeking higher wages. The employees organized strikes and demonstrations last summer, similar to the job actions that have taken place at Wal-Mart Stores Inc. (NYSE: WMT) over the two past Black Friday weekends.
Then, last October, the McDonald’s employee hotline told a long-time employee from Chicago who called asking for advice on making ends meet to seek help from food pantries, apply for food stamps and check out Medicaid assistance. This came after the company had published a sample budget online suggesting that employees having trouble making ends meet needed a second job.
Before the site was taken down, it also advised McDonald’s employees that they might pick up some extra money by returning Christmas gifts for cash.
The company’s statement Thursday about taking down its website blames “outside groups” for all the trouble the company has had with McResource:
We have offered the McResource program to help our valued McDonald’s employees with work and life guidance created by independent third party experts. A combination of factors has led us to re-evaluate, and we’ve directed the vendor to take down the website. Between links to irrelevant or outdated information, along with outside groups taking elements out of context, this created unwarranted scrutiny and inappropriate commentary.
Just a week before the October hotline incident, a new report from researchers at the University of California at Berkeley was released on the cost to the public of low-wage jobs in the fast-food industry. The Berkeley study found that 52% of families of front-line fast-food workers are enrolled in one or more public assistance programs, more than double the rate of entire U.S. workforce. The cost to U.S. taxpayers according to the study is $7 billion a year. Health care accounts for $3.9 billion of the annual cost through Medicaid and the Children’s Health Insurance Program.
McDonald’s is faced with a public relations problem, but it is a relatively minor one to tell the truth. The company looks insensitive and foolish, but it can lay that at the feet of the firm that built and maintained its McResources website. As for the low wages, well, let ’em cake.