#McDonaldsStrike: US Staff Employees Demand Higher Pay but what about India?
On 19th May 2021, McDonald’s workers went on strike across 15 cities in the United States a day before the company’s annual shareholder meeting — demanding a minimum wage of $15 an hour. The strike comes as the restaurant industry in the USA faces a massive labour shortage.
US Senator Bernie Sanders took to Twitter to express his solidarity with the McDonald’s workers and their demand for a higher minimum wage.
“In Denmark, the average worker in McDonald’s makes $22 an hour, receives 6 weeks of paid vacation, 1 year of paid family leave, life insurance and a pension. Yes. If McDonald’s workers in Denmark can have a decent standard of living, we can do it in the U.S.” — Bernie Sanders
Sanders quoted the example of Mcdonald’s employees in Denmark who are not only getting a higher minimum wage but also paid leaves. In contrast, an average Mcdonald’s employee in the US gets only $8 an hour as per the current federal minimum wages. This is $14 per hour less than Denmark.
But what about India? On one hand, we have a developed nation like the USA which is rallying for raising the minimum wages while on the other hand, we have a developing country like India which has abysmally low minimum wages. Low minimum wage, coupled with long working hours, no paid leaves has resulted in an extremely low and poor standard of living among Indian workers.
Who pays the cheque?
Mcdonald’s works on the franchise business model. Simplistically saying, a franchise model is the one where an individual purchases the trademark, business model and operating systems of a brand (like McDonald’s) and opens up and runs a unit in their respective location.
McDonald is a classic example of a franchise business model where the franchisee has the freedom to introduce a localised version of McDonald’s burger like Maharaja Mac — an Indian Vegetarian substitute for the American Big Mac. This is called Glocalisation — a fine blend of global and local in a product.
But one of the downsides of this heavy franchising with glocalisation is that the brand Mcdonalds does not decide on the minimum wages. It is the franchisees who determine what to pay to the people who serve up your burger.
Let me break down how this wage parity exists across the nation within the same brand. Please note that this is an estimation after standardisation of working hours in a week i.e working hours can be less or more
As per this standard chart, the current minimum wage of a McDonald’s worker in India is Rs 90 per hour which is $1.2 per hour. For a 30 hour work in a week, the employee gets only $36 per week and $144 per month. The annual income of a McDonald’s employee in India is $7,488. However, in reality, an average McDonalds employee in India works 48 hours per week for just $1.2 an hour.
In the USA, a McDonald’s worker gets $8 per hour. For a 30 hour work in a week, the employee gets $240 per week and $960 per month. The annual income of a McDonald’s employee in the USA is $12,480.
In Denmark, a McDonald’s employee earning $22 per hour is estimated to earn $2,640 per month for a 30-hour workweek. The annual income of a McDonald’s employee in Denmark is $137,280. They are also entitled to 1 year of paid family leave and 6 weeks of paid vacation.
The Big Mac Scale:
While there is a huge disparity between wages — there is no such difference in the pricing of the products.
For instance, a Big Mac in Denmark costs $5.93; in the USA it costs $5.66 and in India (Maharaja Mac) it costs $2.9
Mcdonald, which is known for standardisation of its products across the globe has a huge income disparity between its workers all because of an overarching franchise model.
The drastic wage disparity between the developed countries like
the USA, Denmark with developing countries highlights that the developing countries are a hub of cheap labour and capital investment.
It also reflects the dynamics of the power structure between the so-called first world countries — which have gained political and economic power over the third world countries.
While these numbers represent the disparity in wages for the same work but it does not reflect the working conditions and living standards of employees across the world. Long working hours, less paid leaves and meagre benefits are seen in many developing countries.
The Mcdonald’s strike in the USA has thrown open a question to the world — Shouldn’t we be asking for standard wages in multinational brands?
