Where McDonald's wages start near $15 an hour

The fast-food chain already pays Australians what striking US workers want. It just requires some business adjustments and buy-in from consumers.

By Jason Notte Aug 7, 2013 7:07AM
McDonald's golden archesScoff at striking fast-food workers' demands for $15 an hour all you'd like, but one chain is already paying that relatively high minimum wage.

Is it a boutique burger joint in Michigan or Oregon that serves up $5 sandwiches? Nope. It's a tiny little outfit that calls itself McDonald's (MCD), and it still turns a tidy profit in high-wage countries around the globe despite paying workers almost double what it pays American staffers.


The Atlantic reports that not only does McDonald's pay its Australian workers the equivalent of $14.50 an hour -- or double the U.S. minimum wage -- but Australia's Fair Work Commission just hammered out a deal between the company and its employees that guarantees workers up to a 15% raise by 2017. That's in a country where most McDonald's workers are already making more than the minimum to begin with.


That should confirm the fears of Americans already cautious about what a Big Mac would cost if worker wages increased, right? After all, that stack of beef patties, sauce, cheese, lettuce, onions, pickles and bread costs more than $1 extra in Western Europe, where McDonald's has to pay workers in France a $12 minimum wage, according to The New York Times.


In truth, McDonald's only wishes its fortunes were as great in the U.S. as they are in Europe. It earns far more revenue there than it does here, despite wages in Europe accounting for roughly 45% of the cost of its food, compared with 25% to 35% in the U.S. In Australia, meanwhile, customers are paying 6 cents to 70 cents extra per Big Mac.


So how does McDonald's survive in such high-wage environments? Much like in the U.S., it plays the game. In Australia, minimum wage for 16-year-old workers is only $8, which gives McDonald's incentive to higher younger workers. It also squeezes more productivity out of workers and does away with little redundancies like cashiers, who are replaced in certain instances by touchscreens.


More significant, however, McDonald's can't just contently exist as a low-end feeding trough in these countries. With higher prices come higher expectations, which is why Australians were getting McCafe and espresso in 1993 while Americans were chowing down on Dino-sized Quarter Pounders that were just Double Quarter Pounders with a Jurassic Park movie tie-in.


McDonald's can pay its American workers the same wage as their foreign counterparts. It just has to hope that the same American consumers who shunned espresso, wraps and Angus burgers and prompted the company to consider all-day breakfast will change their minds and help pick up the tab.


More on moneyNOW

1064Comments
Aug 7, 2013 9:40AM
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I have a very good friend that's from Australia, and the fact is the workers there are treated and paid much better than in America. But, on the other hand, I have a hard time getting my head around with the fact that fast food employees here expect to get $15/hr. Where is the incentive for those that go to college? My wife is a college graduate and makes $15/hr as an accountant. The system is upside down.
Aug 7, 2013 10:15AM
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One thing that was failed to mention is that the cost of living in Australia is far far more worse then America. In 2009 the Avg cost of lettuce (1 head) for the USA was $1.67 Australia $2.44. A .33 littler bottle of coke was $1.67 in the USA and $3 in Australia. AVG. Apartment cost (To buy, per square meter) in the city for USA 1842.74 while Australia was 7,500. So while people in Australia are getting paid more money they really may ne getting even less then us since it cost at least twice as much to live there    

Aug 7, 2013 10:13AM
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McDonald's, Burger King, etc. are minimum wage starter jobs for high school and college kids, and isn't supposed to be a job to support a family of four! It's a part time job for students and those who want/need to supplement their income. IT'S NOT A $15/hr JOB! I can't get parents to pay me that to tutor their children, and I am a college graduate credentialed teacher!!
Aug 7, 2013 10:14AM
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Stay home with your family, and start barbecuing your own hamburgers. It will taste much better when it's cooked from the grill. Why give away your hard earned money on process food that's not fresh and unhealthy. 
Aug 7, 2013 10:25AM
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This article is so full of misinformation and lies that it isn't even funny. First off, they aren't paid an equivalent of $14.50USD, they are paid $14.50AUD, which is the minimum wage in Australia. Second, they say that people only pay 6 to 70 cents more for a Big Mac. That's great, but what about the rest of the menu? A typical McDonalds combo in the US costs about $6.00USD, the same McDonalds combo in Australia costs $8.97USD (looks like that's ALOT more than 6 to 70 cents more to me), or $10.50AUD. Third, cost of living in Australia is about 32% higher than cost of living in the US. A simple cost of living comparison would show that most of this article is nothing more than propaganda. 

Aug 7, 2013 10:14AM
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 In oil boom country (Williston N.D.) there is a severe shortage of workers for everything. The McDonalds here pays $15 an hour to start. The WalMart pays about $18 an hour. All of this extra cost is passed along to the customers.
 The prices for everything here is far higher than anywhere else.

 The McDonals is about 20% higher than back home in Tampa. WalMart is about 10% higher.

 Yay, lets all make $15 an hour so we can then spend our new found income to pay for all of the price increases that will be right behind propping up those higher wages. I mean, where do people think the money to pay employees comes from? It comes from a companies SALES.

Aug 7, 2013 10:15AM
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higher wages, higher prices.........1965 gas was .25 a gallon and cigarettes were the same and if you made 2.00 an hour you could buy 8 gallons of gas and now if you make min wage you can get almost 2 gallons and oh yeah in 65 a hamburger was .15 and new car was 2500 to 5000 and you could buy a house for 10,000 and wages went up and so did everything else so where does it all end. The dollar is worth less and less every time prices go up.
Aug 7, 2013 9:46AM
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The solution is quite simple actually.  First of all get rid of the combo meals and sell everything individually.  Secondly, cut back the number of items on the menu and focus on what you do best, which is burgers and fries.  Last, but certainly not least, make your food taste better.  Stop putting the burgers in a drawer full of grease and stop the microwaves.  Serve them hot off the grill.  Serve a quality product for a reasonable price and people wil come.
Aug 7, 2013 10:09AM
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Whatever happened to people being happy to have even an entry level job?  Working at McDonald's used to be a spring board for people to get some work experience and go on to bigger and better.  Be thankful for the job you have been given and that some one gave you a chance and paid you for it.  Use it to your advantage to advance yourself.  Non skilled entry level jobs are worth minimum wage.

Aug 7, 2013 10:11AM
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I think it is pretty obvious what would happen if they made $15 here.  Hello touch screen ordering right away and who knows what other cost saving invention they will make to cut a job.  I would love for this to take effect and then see all of the jobs like cashiers that end up being cut. Its called unintended consequences.  It sounds awesome and it will be for the ones that keep their job they will get a nice increase but that increase will come at the expense of someone losing their job.  Read the article carefully before you libs get excited.  Austrailia gets around paying people that by using touch screens and minors. 
Aug 7, 2013 10:24AM
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Mr. Notte your article makes NO sense... 

You are seemingly trying to make the case for higher minimum wages - and then proving that higher minimum wages result in fewer jobs? This has to be at the top of my list for stupidest articles ever written.  

Won't waste my time arguing the substance of the article as others have already done an excellent job of that.

You might want to seriously reconsider your career in journalism.
Aug 7, 2013 10:25AM
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It's really hard to compare different countries because you're comparing apples and oranges.  What is the value of the Australian dollar.  Today an Australian dollar is .89 cents to the US dollar.  What are the corporate taxes in Australia, or the cost of regulations? There just is a lot more to the story than comparing dollar wage to dollar wage?  You can't do it.  But if you want to spin information to support your view instead of basing your view on factual information - this is how you do it. 
Aug 7, 2013 11:42AM
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Do you know what happened when I got sick of making $7.25 an hour. I worked harder and got a raise. Then I moved onto the next restaurant and worked hard and became an hourly manager. I worked harder and became a asst. manager, and kept working until I became a G.M.. I have changed jobs 3 times since I was 18 years old. I have no college education and I make $68,000 a year as a G.M. for a restaurant, and I work 56 hours a week. I lived in Australia from the time i was 18 until I turned 24, then I moved back to Ohio and started a job making $7.25 an hour.

   I was lucky enough to be living with my uncle in Australia and I know how much everything cost. It is just unreal. Moving back to the states and shopping was just amazing. The cost of everything here is so much cheaper. SO SO SO SO much cheaper....

  I worked hard to get where I am... Anyone can do it, I am nothing special, except I decided I would not live off the government and I would make my own way..

Aug 7, 2013 10:17AM
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This is tough to compare, you are comparing apples to walnuts here, there are so many factors to consider, one is the country's tax rate, second, the fact Australia provides universal health care, and the third, the country spends less in military then the United States.  They also have a college program where you have zero upfront cost and then repay based on income in the future. 

The major issue facing the United States is there is an abundance of un skilled workers available.  If you quit your job taking orders at a fast food restaurant, you can easily be replaced.  It is all about supply and demand, why pay someone $15 an hour when I can pay someone $8 an hour to do the same exact job?

Aug 7, 2013 9:09AM
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I quit eating at mcnasty's a long time ago.  The food is crap and the service is even worse. When I do rarely eat fast food, and I mean RARELY--it ALWAYS makes me feel sick afterwards.  Don't eat FF, people-it's BAD for you!! 
Aug 7, 2013 8:06AM
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Problem number one with the picking up the tab is that the American consumer has been trained to look to them for low price for their product.

Problem number two in my opinion is that generally there is a lot of mistakes the service, for example in drive through I will order a 20 piece Mcnuggets, and get a 10 piece instead, and this was not a one time event. 

Aug 7, 2013 10:50AM
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Okay, minimum $15 for the manager and assistant manager, everyone else is a touch screen or a teen. Of course they overlook the fact that the cost of living there is double what it is here, on average, And this is what we need in this country right now, more demands from the O.W.S. fruitflies of higher wages for less and less work, if any at all. If you're over 23 and working at McD's, and your not a manager, good chance your job will be gone. If you're there now it is because you can't find anything else, and you want to make demands !!!!

 

Occupy Wall Streeters;

Time to grow UP people and take some responsibility for your own situation. Society OWES you NOTHING. Earn your own way or crawl off and DIE.

Aug 7, 2013 10:30AM
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If someone is living below the poverty level, the gov't fills in the gap. Why not have them earn a living wage to begin with, so that they don't need gov't assistance?  Also, stereotyping that these are uneducated, under-aged parents is ridiculous. People from all situations work fast food jobs. Immigrants who have degrees in other countries, teenagers working their first jobs, people who have been laid off from other jobs, people trying to make ends meet because their primary job doesn't pay a living wage, and, yes, of course, people who may have made bad decisions in life. It should mean that their lifestyles aren't lavish, but they should be able to support their families without government assistance.
Aug 7, 2013 10:14AM
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I think these so called journalists are forgetting the point 
Aug 7, 2013 10:19AM
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first of all Australia has national health insurance and has for quite sometime,secondly a higher minimum wage to around 10 dollars would be OK, but in regard to one posters comment about FF if it makes you sick why do you eat it at all,secondly it must be nice to know that you are easily marketed to,how is your greek yogurt flavored cereal,seriousy America there is no such thing as a greek yogurt cereal especially if it comes in a box,yogurt covered ptretzels ,really.....I have been eating mcdonalds for 50 or so years,I am perfectly healthy and enjoying life....stop being hypo about life and just live it
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