Land, Labor & Capital
plan B economics
April 2011
MCDONALDS HIRES 62,000 AND AMERICA SINKS FURTHER INTO DEPRESSION
McDonalds just hired 62,000 workers in
a national hiring drive. Is this another
sign of recovery or another symptom of
America’s economic depression?
Let’s start by examining the positive side
of the general unemployment story.
Look at the employment data and you’ll
see a picture that has marginally
improved over the past several months.
(Mind you, we’re starting from a
horrible base, so it’s hard to get much
worse and you could argue we have
nowhere to go but up.) A trend is not
defined by a single data point, but it
must start with a single data point…and
it appears that the data points related
to employment are ticking up.
Today we have an example of such an
uptick – McDonalds, during an
employment event this month, hired
24% more workers than originally
intended (62,000 vs. 50,000). Not only is
McDonalds hiring, but they have
determined that there’s an economic
justification to hiring more people than
originally planned.
Now for the negative side of the story:
1. What is a job at McDonalds? It’s a
low-wage/low-skill job that adds little
long-term value to an individual, family
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or economy. It’s a job that many don’t
plan to remain at for long – a certain
level of constant hiring is required to
simply offset attrition. A job at
McDonalds can be a relatively unsecure
position since many positions are part-
time and are easily fire-able; and since
the value-added per employee is low,
the opportunity cost of firing an
employee is generally lower than more
specialized industries.
2. What does growth at McDonalds
imply? Since I assume McDonalds is
targeted at individuals and families
looking to eat out at rock-bottom prices,
growth in McDonalds revenues and
hiring requirements may indicate that
its target market is growing. I haven’t
run the numbers, but my gut tells me
that Americans have scaled back their
entertainment and food budgets – good
for McDonalds, bad for economy.
3. What does 62,000 really mean? Out
of 1 million applicants, McDonalds hired
62,000. This implies a 93.8% rejection
rate…for a job at McDonalds. 1 million
people, who incidentally comprise 7.4%
of the entire pool of unemployed
Americans, decided that a job at
McDonalds was something they should
pursue. My first job (when I was 14, by
the way…) was at McDonalds and I can
tell you that I definitely prefer what I do
today. I’m sure many of those 1 million
This is not advice. Read the disclaimer on the final page.
applicants felt the same way before
they became unemployed. The fact that
such a significant portion of the
unemployed is now willing to do
anything to support their families shows
that the state of the American economy
remains dire.
to a recent Gallup Poll, 29 percent of
Americans think the economy is in a
depression, 26 percent think it is in a
recession, and 16 percent think it is
“slowing down”. In other words, 7 of
every 10 Americans think the economy
is in the toilet.

A job is not a job is not a job. But there Bottom line: People need to eat and are
comes a time when career aspirations, willing to do anything it takes.
creativity and stimulation take a back
seat to the hard realities of a 21st
century economic depression. According

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