There has been a lot of chatter about the financial situation at McDonalds (MCD) lately. All kind of chatter about revamping the menu, loss of market share, allowing more local store independence, etc. All of it is wrong. All of it is focused on the typical MBA thought process of “How can we change nothing and start making money again?” This process never works. It is based on the luck of some temporary downturn which will magically fix itself so the MBA can take credit.
Here is the truth, warts and all. A large section of the American, and dare I say world, population has become “socially aware.” This “do unto others and make a buck” philosophy based on the even more fraudulent philosophy called “Rational Self Interest” has poisoned the well. The victims have decided ethics really do matter. Some companies have caught on, such as Starbucks (SBUX). While nay sayers dump on the botched announcement calling their program a “scholarship” and hinting they were financially contributing. So what? I hate coffee and don’t like Starbucks, but, they did something amazing. They cut a deal so that any one of their employees from the lowest paid on up could get a 4 (four) year degree and graduate with roughly $2,000 in student loan debt. I had more than that my first tri-mester in college back in the 80s. Hats off. Big applause. Ethics matter.
In the case of McDonalds, they are viewed as evil, much like Wal-mart (WMT), Amazon.com (AMNZ) and even Google (GOOG). Oh, Wal-mart should be no surprise. There has been a documentary about them for years. Given the news reports about conditions in warehouses for Amazon.com I can’t believe it will be long before there is a documentary about senior citizens keeling over in the heat. There has already been news stories.
2015 is shaping up to be the year the mighty Google falls from grace. The skeletons started falling out of the closet a while back with a tale about a Google exec, a prostitute, and heroin. The much hoopla-ed glasses have fizzled. Let’s not forget the Supreme Court’s ruling against Aereo saying you cannot take copyrighted material which is available for “free” in one form and “change its form as a service to the public” without express permission of the copyright holder. This means that long drawn out copyright infringement case of biblical proportions where Google scanned books from a library and made them available on-line to sell advertising around them without permission from the copyright holder is really going to bite them now. The documentary covering Google’s ills will have to be turned into a miniseries if it intends to cover everything. Ethics matter. Perhaps Google executives can use DuckDuckGo to search and find out what ethics are?
Of course, we cannot forget all of the stories in the news about major corporations creating business units without a country of origin to avoid taxes or the more widely circulated “double Irish” stories. These stories are going to get more traction from international markets in 2015. I expect the Republican party will attempt to re-introduce massive tax loopholes for their corporate owners in 2015, but the rest of the world is hot on the trail so the major corporations will find no shelters in 2015. Ethics matter. Maybe you can buy a candidate which has them? Oh wait, if they sold their soul to a corporation that means they no longer have any . . .
This all brings us back to McDonalds. Few things are more Norman Rockwell type Americana than the small town burger joint of the 1950s. It was a local business which gave a few kids jobs and provided a safe place for kids and families to hang out. The owners were pillars of the community. Despite what the dieticians say, it was wholesome and good in the minds of those who eat animal products. Today McDonalds is a multi-national corporation. In the minds of an ethics conscious culture it is a corporation built on the backs of McJobs which pay McWages. I believe McDonalds even got some note in “Food, Inc.“
What happened to McDonalds has nothing to do with the menu or a healthier eating America. Other burger joints have increasing sales. People like to eat what they like to eat. That will not change. If we all ate healthy we would never know happiness, at least that is what we believe, especially since we are never happy when forced to eat healthy. What happened to McDonalds is that a large section of consumers now believe the company has perverted Norman Rockwell Americana. To them, that is unforgivable.
“Rational Self Interest” is not a legitimate philosophy, business or otherwise. In general it is a philosophy followed by prison inmates, at least followed before they ended up in prison.
Despite what the press claims, for the people unemployed or holding down McJobs, there is no recovery. The economy is still tanked and their outlook is not improving. The upper 1% is getting richer, but the other 99% are getting poorer. America is all about the come from nothing and build a success story. In the minds of the general public McDonalds has gotten associated with “take those who come from nothing and keep them there.” This “living wage” issue isn’t going away and won’t in a globally tanked economy. It can’t. The global economy cannot actually turn around until people earn a living wage. No matter what Wall Street or the Republican party tells you, this is the simple truth. The middle class on down are the ones who actually pay the taxes which get the country out of debt. They cannot be taxed on income they don’t have. Just about everyone in the world, except a handful of leaders in the Republican party, has figured this out.
Short term the only “fix” for McDonalds is a totally free four (4) year degree from a real college. Not just 100% on-line, but physical classroom time too. Americans understand “paying your dues.” An awful lot of Americans join the military just to go to college. If McDonalds becomes the puts 100% of its McJob employees through college for free, it can be loved again.
Know this. Some fast food chain will do it. Paying $12 for a drive through meal is tough to justify. Paying $12 for a drive through meal which helps put kids through college, perhaps even your kids, is not.