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As President Barack Obama spent the Labor Day weekend stumping for a hike in the minimum wage to $10.10 an hour, a Facebook message was making the rounds that made that goal look like chump change.
A liberal group called The Other 98% posted an image that showed two people in McDonald’s uniforms looking utterly astonished. (The image is a screenshot from a Saturday Night Live skit.) In headline type were the words, "McDonald’s workers in Denmark have a union. Earn $45,000/year."
The text in the post itself was a bit more detailed. It said, "McDonald's employees in Denmark have a union, are paid $21/hour ($45,000/year), and enjoy 5 weeks paid vacation."
The post included a link to an opinion piece for Reuters from a Danish McDonald’s worker, Louise Marie Rantzau.
"I work for McDonald’s and I make $21 an hour," Rantzau wrote. "An agreement between our union and the company guarantees that workers older than 18 are paid at least $21 an hour. Employees younger than 18 make at least $15."
We wanted to check whether Danish McDonald’s workers are unionized and really make $45,000 a year.
We found the union contract so that part is simple. As for the $45,000 a year, there are issues but if the number isn’t spot on, it’s pretty close.
A 2012 annual report from McDonald’s Denmark gives some overall figures. (We used Google Translate to understand the key sections.) Nearly 4,000 Danes work under the Golden Arches, almost all, about 3,500, are hourly employees, and very few are full-time.
In its report, the company bundled those part-time hours and converted them into full-time equivalents. In 2011, it paid wages of 530 million Danish kroner to what would be equal to 2,040 full-time workers. That’s different from talking about what the typical worker actually got. Still, when you do the math, the company paid the mathematically average full-time worker about $46,700 that year.
Statistics Denmark is the government agency that tracks labor information. For the category of food service counter attendants, the annual pay in 2012 was over $41,000. That is for all companies, not just McDonald’s. On an hourly basis, that translates to about $20 an hour.
This lines up with a survey run by two economists, Orley Ashenfelter at Princeton University and Stepan Jurajda at CERGE-EI, an economic research center in Prague. Since 1998, they have tracked hourly wages of McDonald’s workers worldwide. (They use the price of a Big Mac as a way to compare worker pay to the cost of living, as in, how many Big Macs does a person get paid an hour.)
Jurajda told PunditFact that their most recent survey found Danish McDonald’s workers make about $20 an hour.
The catch here is that those hourly wages only deliver an annual income of $41,000 or more if a person works full-time, and we know that most people are part-timers. We asked the McDonald’s corporation, both in Denmark and America, for the median yearly earnings. A company spokesman sent us the statement, "Our hourly rates of pay depend on the role the employee is doing and their age"
Lars Esbjerg, a professor at Aarhus University in Denmark, studies low-wage jobs in his country. Esbjerg said the median earnings are not publicly available, but he sent us a copy of the latest McDonald’s union contract. The lowest hourly rate is 115 DKK, or $20.70. Anyone who works after 6 p.m. or on Sundays is paid more.
"Given that many will work odd hours, the full-time equivalent wage of $45,000 sounds about right to me," Esbjerg said.
Trimming the pay advantage
Typically, when the pay scale at McDonald’s in Europe comes up, the most common rebuttal is that people there pay higher taxes. That’s accurate, but while wages are more than double what they are in the United States, taxes are not.
According to the U.S. Bureau of Labor Statistics, the average American fast food worker makes about $9 an hour. Compare that to the $20.70 paid in Denmark. According to the Organization for Economic Cooperation and Development, the average tax burden in Denmark is 38.2 percent, while in America, it is 31.3 percent. So taxes are about a fifth higher. Most people, if given the choice, would accept a 20 percent hike in taxes in exchange for making twice as much.
That still doesn’t quite make it an apples-to-apples comparison because the cost of living is higher in Denmark. Both Jurajda and Esbjerg said that this also cuts into the wage advantage that Danish McDonald’s workers enjoy over their American counterparts.
But at the end of the day, according to Princeton economist Orley Ashenfelter, they still come out ahead.
"I'm sure that the Danish McWorkers are pretty happy," Ashenfelter said.
Ashenfelter added that as a fraction of the workforce, Denmark has far fewer McDonald’s employees than does the United States. He also said that for many decades, the Danes have used wages as part of a conscious policy to reduce inequality.
The group The Other 98% said that Danish McDonald’s workers have a union and make $45,000 a year. The union membership is totally accurate. The matter of pay is true for some workers, but certainly the majority work too few hours to make that much. Still, the average numbers provided by McDonald’s Denmark, government statistics, and data analyzed by economists who have studied the earnings of Danish McDonald’s workers, generally support that figure. The post did not specifically say that all McDonald’s workers made $45,000 a year, and the broader point, that it is much better to flip burgers in Copenhagen than in Cleveland, holds up.
We rate the claim Mostly True.
Update: The McDonald's Corporation sent a statement after this check was published
The Other 98%, Facebook - Danish McDonald's workers, Aug. 24, 2014
Reuters, I’m making $21 an hour at McDonald’s. Why aren’t you?, May 15, 2014
Columbia Journalism Review, The minimum wage and the Danish Big Mac, Sept. 5, 2014
McDonald’s Corporation, McDonald’s community contributions in Denmark, 2012
McDonald’s Denmark, Union contract
Statistics Denmark, Integrated database for labour market research
Bureau of Labor Statistics, Fast food and counter workers, 2013
Tax Foundation, A Comparison of the Tax Burden on Labor in the OECD, June 19, 2014
Organization for Economic Cooperation and Development, Taxing Wages: Denmark, 2013
Organization for Economic Cooperation and Development, Taxing Wages: United States, 2013
Remapping Debate, The high road to high wages: Denmark's answer to the U.S. model, Sept. 14, 2011
Email interview, Kristian Hjulsager, Library and Information, Statistics Denmark, Sept. 3, 2014
Email interview, Orley Ashenfelter, professor of economics, Princeton University, Sept. 2, 2014
Email interview, Lars Esbjerg, associate professor, Department of Business Administration, Aarhus University, Sept. 3, 2014
Email interview, Stepan Jurajda, economist, CERGE-EI, Sept. 3, 2014
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