National’s McJob Creation Scheme

The Spark August 2009
Byron Clark

The government has made a deal with fast food giant McDonald’s in which young people receiving the unemployment benefit will be sent to jobs in McDonald’s restaurants, and have their ‘training’ subsidised by the state. Every beneficiary McDonald’s hires will get the company up to $16,000 which is the equivalent of about 8 months wages for a McDonalds worker. Social Development and Employment Minister Paula Bennett is citing the relationship with the golden arches as an example of “the Government’s commitment to getting beneficiaries into jobs,” but while the growing number of unemployed certainly need jobs, McDonald’s needs workers a whole lot more, and this is what the scheme is really about.

Fast food is a growth industry during this recession, as people who would have previously eaten at more up-market restaurants lower their budgets. McDonald’s in New Zealand is continuing to build on its profits, enough to open a number of new outlets. They need to employ an estimated 6,000 workers over the next few years. The reason? Those workers are where their profit comes from. The company can provide an investment to build a new store with all the cooking and food preparing equipment that requires, but it can’t see a return on that investment until labour (ie, workers) is added. A McDonald’s worker doing an eight hour shift for minimum wage will be paid $100, but by turning raw materials (buns, meat patties, frozen Happy Meals, that worker could produce $200 for the company. Without the worker, McDonald’s couldn’t realise a profit.

Shareholders always want a bigger return on their investment (or they would simply invest their money elsewhere) so workers are always being pushed to make more money for the company’s shareholders; partly through selling upsizes and extra fries, and partly through being made to work harder and faster.

Since in reality its not each worker producing an individual share of wealth for the boss, but a whole number of workers working collectively to produce wealth, squeezing more out of the workers is often done by taking a labour process done by, say, four workers, and having it done by three workers with the same expectation that the customer will get their order within 2 minutes. The ideal for McDonald’s, as for any employer, is to get the maximum amount of profit from a minimum amount of wage outlay. With this being the case, how is the government’s new scheme going to help more people gain employment? Well, hiring four people at minimum wage with one of them a former beneficiary on subsidised wages is certainly more profitable than hiring four unsubsidised workers, but then, hiring three workers with one of them a subsidised former beneficiary is even more profitable still. If this scheme really creates any more jobs than McDonald’s would create anyway — without the helpful hand of corporate welfare —it would be for the short term at best.

Even if we take Paula Bennet at her word, and believe that this scheme is all about giving a helping hand to unfortunate unemployed young people, then why McDonald’s? Is the expansion of the fast food industry National’s answer to capitalism’s economic woes? McDonald’s jobs are the archetype of the ‘McJob’ and of course, the originator of the term. The Oxford English Dictionary defines a McJob as “An unstimulating, low-paid job with few prospects, esp. one created by the expansion of the service sector.” McDonald’s restaurants are fast-paced and highly stressful workplaces, and there are stores with many health and safety hazards caused by hot oil, wet floors and intoxicated late night customers. While McDonald’s workers have fought to improve wages and conditions, the company is aggressively anti-union. In addition to all this, the food they sell is frequently associated with poor public health, and the packaging it comes in is a significant environmental concern. Yet this is the kind of job creation the government is putting resources into, at a time when polytechnics — places where people learn skills in carpentry, engineering, information technology and a huge number of other professions — are crying out for more funding and turning away students in their thousands.