McDonald was born in 1902 in Pittsburgh, Pennsylvania, to David and Mary (Kelly) McDonald, Welsh immigrants. David McDonald, Sr. was a long-time union activist who had been run out of Springfield, Illinois, because of his union activity. After failing as a saloonkeeper, McDonald, Sr. got a job as a guide setter at a Jones and Laughlin Steel Company rolling mill and joined the Amalgamated Association of Iron and Steel Workers. Mary McDonald's father had been an officer in the Sons of Vulcan, an early ironworkers' union, and both uncles on his mother's side were unionists. The night that he was born, his father was walking a picket line.