McDonald's corporate ladder has only low rungs

Contrary to CEO Don Thompson's claim, entry-level fast-food workers have just about no chance to move up.

By Jason Notte Jul 26, 2013 7:24AM
Marino Ahuatl works the drive through station at a McDonalds in Wheaton, Ill. (© Antonio Perez/Chicago Tribune/MCT via Getty Images)Can a company that advised employees to take a second job and, just two years ago, considered replacing them with touch screens really be considered a steppingstone to a bright future?

McDonald's (MCD) chief executive Don Thompson thinks so, telling Bloomberg his company has "always been an above-minimum-wage employer" and arguing that 40% of McDonald's executives started out as hourly employees. Critics who have already noted that his company's online budgeting tool for employees leaves out items like food and clothing were quick to disagree.

According to a new study by the National Employment Law Project, a fry shoveler or drive-though window cashier has little to no opportunity to climb the fast-food industry's corporate ladder. Fewer than 2% of industry jobs are held by the executives Thompson used as examples.

Instead, nearly 90% of all fast-food jobs belong to cooks, cashiers, delivery workers and other nonmanagerial workers. By comparison, 31% of jobs in other U.S. industries are above entry level. As NELP pointed out to The Huffington Post, front-line fast-food jobs pay a median hourly wage of $8.94 and workers stay in those positions for years at a time with scant opportunity for advancement.

The industry is also set up in such a way that someone working the fryers could just about never rise into the upper echelons of the industry. McDonald's has one franchise owner per 293 employees. Yum Brands' (YUM) Taco Bell and KFC require their franchise owners to have a net worth of $1.5 million and liquid assets totaling up to $750,000.

It doesn't get easier when the same fast-food establishments keep pulling the ladder out from under their entry-level employees. White Castle just joined a parade of fast-food chains planning to hire only part-time workers in order to duck the effects of the Affordable Care Act. Other chains are cutting back workers' hours, reducing their benefits or firing them.

McDonald's may be "providing opportunity," as Thompson says, but his claim that the company is helping employees "rise through the system and gain greater and greater wealth" looks a bit supersized.

More on moneyNOW

Jul 26, 2013 2:13PM

I was a manager in the manufacturing industry some years ago. When hiring new employees, the ones who had worked for McDonalds, or other fast-food restaurants, for 6 months or longer never failed to become my best employees, who continually grew to earn higher and higher salaries. An entry-level job is just that: an entry into the workforce. The employee then has the opportunity to work his/her way up the employment ladder, either within the company or by an advance into another company.

Entry-level jobs are highly valuable for introducing low-skilled people into the workforce. Those who will actually work and learn have virtually no limit to the career advancement they can enjoy.

Jul 26, 2013 11:39AM
If McDonalds and Walmart did not exist, what in the world would MSN write about?
Jul 26, 2013 1:33PM
Considering the wrong orders i receive a McD's consistently i doubt those people would climb the corporate ladder no ,matter where they are employed. Perhaps politics would be a better avenue for them to take.
Jul 26, 2013 1:26PM
Started at McDonalds in 1976. $1.80 per hour. 37 years later I am a Maintenance Supervisor for 15 McDonalds making more money than many of my college degree friends. I did it through hard work, talent, and by realizing that there is opprutunity everywhere if you just don't quit. Obama would have you think that if you have a hard time with your job or life in general it is societies job to take care of you. Obama and his policies are making many of its citizens into "drug addicts". The drug is government hand outs funded by those of us responsible enough to work our way to success. 
Jul 26, 2013 12:21PM

That's their (McDonald's') choice.  It's a private business.  What is the aim of these articles?  Is it to foment anti-private enterprise sentiment?  Is it to push for legislation of what private industry may or may not do within their own companies?  Is the author pushing for government (The Collective) ownership of all things to the utter elimination of private property rights and privacy?


A better idea is to vote with one's wallet.  Simply, don't eat there or give them your business if you disagree with how they do things.  An American citizen is an independent merchant and contractor.  We each have an ability to reach an accord with a prospective employer, or to start our own enterprise.  If a person is not happy with the relationship, based on pay or otherwise, that person ought to consider that they are equally responsible for reaching and agreeing to that accord.  It's not like the employer is holding them "captive".  The individual's own circumstances may be holding them captive, but the employer is not -- not today.   

Jul 26, 2013 9:02AM

duh!  most of the entry level jobs hardly require a GED!  many of the entry level people don't even speak english!  play


the numbers game and you'll see the stats you list - and results you allude to - are meaningless for a business plan based on low end labor! 


if you HAVE a brain, you can grow in any company. 


if your goal in life is to flip burgers - then you reached it upon entry in McDonalds! 


the key statement is that "40% of McDonald's executives started out as hourly employees."   that says enough.  there IS growth potential for those who want it. 

Jul 26, 2013 2:18PM
McDonalds is an excellent training ground for customer service skills and management skills.  Work hard at McDonalds and you can achieve.  The training is excellent and so is the opportunity.  If the individual wants to succeed in that environment he/she will get the opportunity.  I worked for McDonalds for 6.5 years, 5 years as a manager and it put me through college.  My experience there along with good grades in college attracted many employers upon graduation.  You can take on as much responsibility as you earn there and get excellent management experience to succeed there or somewhere else.  Like everything in this world, if you put the time and effort into it you will be rewarded.  This article was ridiculous and smacked of entitlements and a socialistic environment instead of the capitalistic environment this country was built on and needs to go back to.
Jul 26, 2013 2:48PM

What a useless article. . .


You want to move up?  It's simple, be better than the employee next to you.  Come in early, stay late, stop starring at the clock wondering if you can get paid 8 hours and only work 7. 


I never see articles from MSN about how to get ahead.  Is it because it is a lost art, or is it because the truth would upset the masses?  Just because you show up to work does not ENTITLE you to better wages or frequent promotions. 



Jul 26, 2013 5:25PM

It's sad so many of the young spew the right wing party line because being too young to remember history they also apparently never read of it. They argue that minimum wage is a training wage not designed as a career yet ignore that at companies like Walmart probably half of their workers are over 40 and worked there for years for little more than minimum wage. Over 30% & almost all retail jobs pay only slightly better than minimum wage.


I remember when I began working some 50 years ago when only teenagers made anywhere close to minimum wage. Few companies would insult an adult with such an offer. Grocery clerks & cashiers made 3 or more times the $1.25 minimum. At that time CEO's made an average of about 20 times what their average worker made, today it's 400 times. You educated or with a skill that make $20 to $25 an hour feel superior and feel comfortable suggesting 30% of Americans should work for close to minimum wage but aren't intelligent enough to realize had America maintained it's course those Walmart workers would be making what you do and you'd be making twice as much or more than you do today. Today many think it perfectly reasonable that the owner of a single store should profit 5-10 million a year while paying minimum wage. 40 years ago that wouldn't happen.


Realize this, if minimum wage were ended as many suggest and some jobs paid $3 or $4 an hour your pay would likely drop as well as pay is usually provided in steps. As in past history we'll reach a point that too many millions working full time jobs living in abject poverty will refuse to accept it. Unions will return as will strikes and violence until those very wealthy few at the top realize they can't continue to get away with this forever any more than the robber barons of the past.

Jul 26, 2013 2:47PM
These kinds of articles are thinly veiled attempts to vilify private industry and the free market.  Nobody is forcing anyone to work at McDonald's or any other entry level job.  These are just that ... entry level jobs.  You work there as a teen and get valuable experience in self reliance, responsibility and economics.  If you want to better yourself, get up off your duff and do it.  Don't expect the company to advance you.  That's not their responsibility.  Recent generations have come to expect things to be done for them and don't realize that the the person responsible for them is looking back from the bathroom mirror.
Jul 27, 2013 9:52AM
This article is a load of garbage.  I worked as a McDonalds salaried manager for 3 years.  I can tell you that ANYONE who showed even THE LEAST BIT OF PROMISE got promoted pretty quickly.  The reason that so many front line workers don't ever get promoted is because THEY DON'T HAVE THE WORK ETHIC.  You don't have to be one of the best and brightest to move up to at least 1st assistant manager or store manage because McDonald's has a policy for pretty much every situation.  All you have to do is be dependable and of average intelligence and be able to pass a background check/drug test.  The first and last requirements eliminate about 95% of all entry level employees from consideration.
Jul 26, 2013 3:38PM

Jul 27, 2013 12:02PM
What in the hell does President Obama have to do with your crummy job at McDonalds. You took that job in 1976. Get real...
Jul 26, 2013 3:01PM
Oh boy, last year, out of a nation of billions of people, only one was promoted to President of the U.S.  Is that "unfair"?   No.  Of course there's only one McDonald's CEO and a small handful of top-level management executives.  That's how it's supposed to work.  What do you want, 20% of drive-thru attendants to be promoted to Chief Financial Officer every year?  Next they'll have an editorial about how Navy SEALs should be forced to let all sailors wear the trident so things will be "fair".  How has the left wing so ingeniously re-written the definitions behind our common vocabulary?  "Hate" now seems to mean mere disagreement.  "Harassment" seems now to mean ANY "unwelcome" comment (even once).  "Fairness" has become a one-way street (ironic, huh?).  If we mention this, well, that's dismissed as "hate"-speech.  Self-reliant people are increasingly depicted in disparaging terms in most media, rather than looked up to as an ideal.  But hey, I guess THAT somehow is NOT "hateful rhetoric".  
Jul 26, 2013 7:10PM
The premise of this article is completely untrue.  If you work hard in any large corporation and show that you have talent and drive then you will succeed with that company.  I started out in the grill at Mcd's when I was 16.  After 5 years I became a shift manager and worked my way through college.  After college the best job offer I had was at Mcd's as an assistant manager.  I was then promoted to store manager after about 3 more years and ran a number of Mcdonald's restaurants for the next ten years.  My story isn't an anomaly either.   Many of my friends did the same thing working for McDonald's corporation.  The training I received from Mcd's was invaluable and I now OWN several Subway restaurants.  Without all that great training from Mcd's I don't know that I would be as successful as I am today.
Jul 26, 2013 1:46PM
Sample size of executives is pretty small, so 40% sounds big but what does that amount in finite terms?  Now please show me the percentage of minimum wage employees that go on to become executives.
Jul 26, 2013 1:52PM
Michael, funny!... I hope or you are just a dangerous idiot!  Having run started in fast food, and then come back to operate a major location in a chain later in life, I can say that both positions in this piece are true.  You can start at the bottom, and work hard, improve your skills, get a better education, take on new positions, and grow your career even in a fast food job.  I know lots of people that started out on a line and now own their own location, or locations, and even several brands.  I know ppl that started on line and have made great careers in the industry that do very well. I have know ppl off the line that went on bigger and far better professional careers, but remember their days on the grill as a starting point to learn work ethic, and motivation.  On the other hand I know a lot of ppl that are still at the low end working two jobs for two brands in the kitchen six days a week, and living check to check.  I no a ton of great ppl that would be really good in lots of jobs, IF they ever learned to speak English, or ever got off the bong, or had never had that DWI, or drug arrest in College!  That the great thing about America, you can quit McDonald's anytime you want if and when you can do better, and if you cant, you feel good about having the job!  Unless you are lazy scammer who just wants to complain and live off welfare and food stamps, and complain about the 'living wage", and making it on minimum wage!  Stupid story!
Jul 26, 2013 2:15PM
McD's is an example of a "flat" pyramid.
Jul 26, 2013 4:28PM
Jul 27, 2013 5:09PM
Rotten bastards. But remember folks: Supreme court says "corporations are people too". Yeah right. Greedy, uncaring, money grabbing, selfish. Get me a dictionary. They are so much more. Buy and sell people like the giant portfolios they own.
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