The Means, Part Two: Profit
By Bobby Dillon
This will be a column in eight parts. Through this column I hope to get us all thinking and talking about politics differently. We’ve been fed bullshit most of our lives and this column wants to cut through it without pulling punches. Comments? Questions? Email me at email@example.com
In her fantastic 1974 novel The Dispossessed, Ursula K. Le Guin frequently uses the term “profiteer” as a pejorative. I like it. I’m going to do that myself. In part one I mentioned how all profit flows up, into the hands of a relatively small number of people. How does that happen? How does profit work, and why am I so peeved about it?
In 2019, McDonald’s brought over $21.08 Billion in total revenue with a net profit of $6.03 Billion. This makes for a massive 28.6% profit margin. This is huge; most companies could never hope to achieve that kind of margin, so keep that in mind. So, what do these figures actually mean and why does it make me so mad? That profit margin indicates that for every dollar you spend at McDonald’s you’re actually only getting 72 cents worth of food. You go get a number one, their famous Big Mac, with fries and a drink and spend, let’s say, eight dollars on the meal. You’re actually getting six dollars worth of food and you’re giving McDonald’s shareholders the other two dollars for the pleasure of buying food from them. You are paying more than what it costs to get the food to the restaurant, prepare the food, and give you the food. This is how profit is generated, by making you pay a great deal more than it actually costs to provide you with a Big Mac – and this is after EVERYONE involved has been paid for their labor!
Does that seem right to you? Because that’s how profit works, and not just at McDonald’s. Imagine that very same process taking place every single time you buy anything. Every time you pay rent, you’re paying more than it actually costs to provide you with a home. Every time you buy groceries, you’re paying more than it actually costs to get those groceries to your fridge. The average everyday McDonald’s worker is paid around $10 an hour. If someone works 40 hours a week for an entire year, that amounts to $20,800 – an amount of money that is LITERALLY below the poverty line. Remember how I said McDonald’s shareholders made $6.03 Billion in profit in 2019? McDonald’s employs about 205,000 people worldwide. Guess what that means – it means that McDonald’s shareholders are CASHING IN to the tune of over $29,000 per employee. You could take all the profit McDonald’s made in 2019 and split it amongst every single employee and more than double their salary! This is absurd. The shareholders aren’t the ones flipping burgers and taking orders or managing the sprawling supply chains! The shareholders aren’t the ones generating profit, The workers do that! The average Mickey D’s employee generates almost THIRTY THOUSAND DOLLARS of profit – not revenue, profit – every single year. And who gets all that money? The profiteers. A handful of investment companies and hedge funds, who use it to create more wealth for themselves and their friends. Our economic model is designed to benefit those who are already wealthy – the easiest way to make money is to already have a lot of money.
Now, I’m not about to tell you we should nationalize McDonald’s or something (although that’s an interesting thought) – McDonald’s just serves as a nice example of what I’m trying to illustrate. The money you spend at McDonald’s hides the reality of the entire process of getting that Big Mac into your hands. To you, that’s just eight dollars. In reality, it’s the result of factory farming to produce the ground beef, exploitative labor practices to prep the food for shipment, exploitative labor practices to ship that food to a warehouse where exploited laborers ship that food throughout their regional distribution network to the stores themselves, where exploited laborers prepare the food and put it in a bag and hand it to you before you drive away. ALL OF THAT costs 72 cents. But you pay a dollar. Built within that dollar is 72 cents to split amongst every single human being whose labor went into that Big Mac, the development and acquisition of materials necessary to make the Big Mac (two all-beef patties, special sauce, lettuce, cheese, pickles, onion, on a sesame seed bun), the marketing campaign to get you into the store to buy the Big Mac, et cetera, et cetera. And then there are 28 cents for the profiteers to split amongst themselves.
And you know something? I like McDonald’s. They have great breakfast. There are these little McChicken biscuits that I think are supreme. I’m not trying to guilt-trip anyone into hating McDonald’s – there’s a reason McDonald’s exists and is so popular. People like being able to go to a restaurant and get the same thing no matter where they are in the country. People like being able to go through the drive thru and get something before work that’s quick and inexpensive. McDonald’s has built an amazing infrastructure of food distribution throughout this country. The problem is that this infrastructure’s only reason for being is to suck money out of our pockets and our communities and send it away to be hoarded by a handful of investors. The money doesn’t go back into our community, it just disappears. It goes to the Cayman Islands or Switzerland or any one of the multitude of corporatocracy tax havens here and abroad.
Profit isn’t bad in and of itself, I want to be clear. What’s bad is the way profit is the central organizing principle of our entire economy. The profiteers want us to think of all business as small business, where a person owns their own business and takes the proceeds and uses it to pay their mortgage. If that was the reality of our economy then we’d be having a different conversation, but that’s just not how these giant behemoth companies like McDonald’s, Walmart, and Amazon work. They take your money and give it to shareholders.
Imagine what we could do if we just cut the billionaires out of the picture. Imagine if we took this infrastructure and re-tooled it so that it doesn’t exist solely to create profit, but to benefit everyone. We could accomplish so much and it starts with hard work.