Tags: mcdonalds | wages | research | undergrad

McDonald's Wages 'Research' Written by Undergrad, Not Researcher

Wednesday, 31 Jul 2013 03:44 PM

By Clyde Hughes

The "study" that came out Monday showing the price of a McDonald's Big Mac would rise only 68 cents if the burger franchise doubled salaries for workers was created by an undergraduate student, not a researcher.

The Columbia Journalism Review took The Huffington Post to task for its reporting on the story, from not linking the online article to the actual study to misidentifying University of Kansas undergraduate student Arnobio Morelix as a researcher.

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Morelix told The Huffington Post that McDonald's would only have to raise the price of a Big Mac from $3.99 to $4.67 and increase its dollar menu items by 17 cents to raise employees' wages. 

Morelix's report coincides with strikes over low wages, which have been taking place at fast food restaurants in seven cities.

Many media outlets picked up The Huffington Post story that broke Morelix's work, from MLive.com, which covers local news in Michigan, to the liberal-leaning national website ThinkProgress.com.

The Columbia Journalism Review's Ryan Chittum pointed out holes in the study and The Huffington Post story Wednesday.

"Since the HuffPost doesn’t bother to publish the actual 'study,' which wasn’t really a study, we can't really tell where these numbers are coming from," Chittum said in the CJR story posted Wednesday. "The only way to get the 17 percent-of-revenue labor figure is to divide payroll and benefits at company-operated restaurants by total revenues.

"But here’s the thing: More than 80 percent of McDonald’s restaurants are franchises, and the company makes scads of money from them in no small part because it has no direct labor expense at those stores," Chittum added.

The Huffington Post added a correction to the end of its original story.

"An earlier version of this story misrepresented Arnobio Morelix as a researcher for the University of Kansas. Morelix is registered as an undergraduate student at the university, according to University of Kansas School of Business Communications Director Austin Falley," it read.

Using labor cost analysis of U.S. franchisees from Janney Capital Markets as a benchmark, McDonald's menu prices would likely rise about 24 percent without dipping into profits, but it is still guesswork based on skeptical profit-margin figures, according to Columbia Journalism Review.

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Related stories:

McDonald's Monopoly Back, But Chance of Big Win Not Supersized

McBroke: Low-Wage Budget for McDonald's Workers Doesn't Add Up

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