Investing / Leadership / Positive Mental Attitude / Private Equity

It’s the “Golden Arches” not the “Golden Bassinet”

mcdonaldsWhen I was going to college and came home for the first summer, I worked at my father’s wholesale jewelry warehouse. There were a lot of heavy boxes to move around of costume jewelry and orders to fill from 100’s of rows. It was really simple stuff and also. . . being the boss’s son and showing no favoritism. . . some bathrooms to clean.

After getting my first deplorable $400 (gross) two-week paycheck, and armed with 3 months of a college education (and 50 ski-lift ticket stubs–I went to Colorado State), I went to go complain to my father.  Like a lion waiting for its kill, he let me speak, “Dad, I am a college educated guy, I have worked here before, and I might take over the business and Dad, I’m your son!”

As if I didn’t know what was coming, he said,  ”Scott, if I hire a CEO, of a Fortune 100 company, to empty waste paper baskets and clean bathrooms, what should I pay him?” He added: “The job, with that skill set, pays less than what you just got, regardless of who does it!”

Okay, now to the recent debate raging in the U.S., of minimum wage for fast food employees at $7.50 versus $15 an hour.

Like a rite of passage, at least when I was growing up, every kid worked at a McDonald’s, Kentucky Fried Chicken or a hot dog stand during high school. They were easy jobs to get, flexible within reason, and I got to eat a lot of left over food. The idea was to make some money for personal spending and if I liked the Industry, I could take up marketing, food science, or restaurant and hotel management in college.  It taught me responsibility, commitment, and how to contract many different foreign viruses. . . so I could miss work.

Seriously, I am glad I did it, but it wasn’t my dream job.

There is a “drive through” for a reason. . . people, at least most people, are not meant to stay there! The advocates of the recent debate want to raise the minimum wage by double! This would take a fast food worker to $30,000 year. I am sorry, it’s not a function of what percentage part of the gross $1 that should be allocated to HR; it’s a function of what that job requires and what the employer is willing to pay, besides, facility, food, insurance, corporate, and marketing costs.  Just because a person is hired and shows up to work, it doesn’t release him or her of the responsibility to learn new skill sets and climb the ladder! That position just does not warrant a higher pay. The U.S. is not and should not be a “Mommy State.”  (That’s what I call it.)

Don’t get me wrong, I feel for the people on T.V who are picketing out front. The little 17-year-old girl who says she is the only one of seven in her family working. The others are at home. She supports them all. She can’t do it on $7.50 an hour. I believe her, but I have to ask, what are the other seven people doing at home?

Trust me, it doesn’t stop there. I see the same sense of entitlement with recent college graduates.  Just because you went to college (if you were lucky enough), it does not mean the world owes you a living. I see this attitude come up in about 99% of the graduates I interview.

Okay, let me breath for a second…climb_ladder

 Lay the groundwork.

I understand that not everyone has the luxury or choice to do what I did.  I say that a little tongue in cheek as eating at free bar “happy hours” and working for $200 week after college (my real education) wasn’t the most enjoyable experience.

When I was in college, after the job with my father, I wanted to go into the commodity markets. This is normal for most “North Side” kids in Chicago. The summer jobs were to be “runners.” It involved nothing more than taking an order that came to the desk over the phone and “run it to the trading pits.” Even with the low skill demand, those jobs were extremely hard to get, and usually reserved for the trader’s kids. To be on the trading floor, with the energy, and the ability to learn “first hand” was all I could dream of.  I felt it was my “ticket.” It was to also dictate my next 20 years of career path choices.

There were no jobs, so I decided to walk up to the biggest and most respected “Merrill lynch” and claim that I would work for free. As I approached the floor manager, and stated my terms, a gentleman turned to me and said, “work for nothing, are you crazy kid?” I said, “I just want to learn.” This man turned out to be the head of Merrill Lynch floor operations and within two days someone was fired and I got the job.  Oh and I got paid, too.

Fifteen years later, I was on a phone interview for a FOREX management position and I was asked if I knew this man. I said, “wasn’t he that short heavy guy that ran Merrill Lynch in Chicago?” A new voice came on the phone and said, “how tall are you (with some profanities)”? It was him– fifteen years later, and yes, I got the job!

“If you are green you grow, if you are ripe you rot.”

If fast food workers really want to make this a career path or something permanent, I know for a fact that most firms have management trainee programs. McDonald’s has “Hamburger University” for instance.  It’s considered “the Harvard University of the fast-food industry.” All aspects of running the franchise and corporate advancement are taught at Hamburger University.  Just for information purposes, a store manager at McDonald’s makes $42,000 (on average) to as high as $90,000 depending on location.  A McDonald’s regional manager (who oversees several franchises) salary ranges from an average $92,000 to $125,000.

These don’t sound too bad for a place that in order to get promoted, you don’t need to invent a new sandwich, you get fed, and if you want to relocate, there are choices, and nobody gets fired for low sales.

Successful people are willing to do what unsuccessful people are not.

I also have a college friend who worked at a famous fast-food/fast delivery pizza chain. He delivered pizzas and with the tips was making $20/hr. After dropping out of college, he decided to stay with the chain and was encouraged by the chain to go for franchises. They trained him, educated him, and by the age of 23 he had already been the manager of eight locations. He also had the opportunity to open stores abroad and by 26, owned his first franchise. The company even loaned him $500,000 to open franchises when he couldn’t even get $1,000 on his Visa card. By time he was 44, he owned 26 franchises.

The idea, in his words, was that “if you weren’t an idiot and worked hard, you moved up.” He added in retrospect: “Not bad for a college drop-out.” He ended up with gross annual sales of $13,000,000.

The idea of capitalism, my friends, is opportunity. It’s there, for those that want it. For those who want someone to take care of them, I suggest the following illustration as a wake-up call.

birds

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2 thoughts on “It’s the “Golden Arches” not the “Golden Bassinet”

  1. I totally agree. If minimum wage is raised a dollar or two, in order to keep up with inflation, that would be rational. However, $15.00 an hour to flip burgers is not rational. I worked at a burger joint to help pay for college. I knew if I wanted to make a living wage then I needed some kind of skills to warrant higher pay.

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