The McDonald’s “Benefit” Myth

05/2011

 

McDonald’s claim that their store in Tecoma will provide $1million per year to the region, but  how will this income be provided?  McDonald’s are a multinational corporation that prides itself in providing a uniform product through all of their outlets. To achieve this they have a centralised provisioning and processing system. They do not purchase their ingredients locally. Thus the  only source of ongoing income to the region from McDonald’s will be through wages  to the employees at the outlet.


McDonald’s (Australia) have 85,000 staff in 808 outlets for an average of 105 staff per outlet. This coincides with what McDonald’s expect the staffing level at Tecoma to be. TVAG has been informed by McDonald’s that Tecoma will have between 100 and 120 staff.


McDonald’s revenue in 2010 was $3.25 Billion  for their 85,000 employees, or an average of $38,240 per employee. In the USA the average income per employee is over $69,000! This is the average revenue that McDonald’s receives through the efforts of its employees. It is NOT the income of those employees.


Thus the expected revenue for the Tecoma store would be over $4 Million [105 x $38,240 = $4,015,200]. This revenue will come from our region, either directly from the pockets of locals or through lost opportunity by existing businesses who provide a similar service to residents and tourists.


McDonald’s income from the region = $4 Million

McDonald’s contribution to the region in wages = $1 Million

Net loss to region = $3 Million per year !


Thus for every dollar McDonald’s provides to the region they will TAKE-AWAY three dollars.  This is revenue that currently goes to existing businesses in the region who, in turn, spend much of this revenue within the region and thus provide a flow on economic benefit to the Dandenong Ranges. 

Sources:   McDonald’s Australia Corporate Responsibility & Sustainability Report 2010

                Ferntree Gully-Belgrave Mail, 3rd May 2011

                 http://www.wolframalpha.com/input/?i=mcdonald%27s

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