Last week, McDonald’s announced that it was going to increase wages for employees at its company-owned stores, about 10 percent of all locations. That announcement came after Walmart, Target, Gap, and the owner of TJ Maxx and Marshall’s all said they would increase their lowest pay.
During an appearance on CNBC on Monday, Domino’s CEO Patrick Doyle was asked where the company stood on pay increases after these announcements. He responded that with an improving job market, employers will have to raise wages to attract workers, including his own.
Watch (starting at 2:05):
CNBC Global PlayerEdit descriptionplayer.theplatform.com“The great news is the economy is moving, it is getting better, it’s getting harder to hire people, it’s why i think you’ve seen a lot of these announcements around pay,” he said. “I think the reality is the labor market is tightening up, you know, and we’ve got to respond to that. It’s getting harder to hire people, that drives wages up and that’s a great thing.”
When asked specifically whether Domino’s will be making any wage announcement, he pointed out that over 90 percent of its locations are franchises, not company-owned, and said franchisees “make that decision themselves.” But he said in the about 400 stores it operates directly, “we’ve got to pay more to get people right now.”
The company doesn’t have a great track record when it comes to wages. Despite paying workers an average of around $7.42 an hour for delivery drivers and $8 an hour for in-store workers, two of the company’s New York franchisees had to pay out settlements to workers over wage theft last year, one for $1.3 million and the other for $448,000. New complaints of wage theft recently cropped up in Georgia. Wage theft complaints have also previously gotten 25 workers allegedly fired, although they were later reinstated under order of the New York Attorney General.
But it’s not the only one thinking about increasing pay in order to attract employees. That was the reasoning behind the announcements from Gap and TJX. Research has found that higher wages reduce turnover and attract better job candidates while also increasing productivity, performance, and customer experience.
Many of these companies have also come under pressure from labor activists. Fast food workers at Domino’s, McDonald’s, and others have repeatedly gone on strike and will do so again on April 15, while Walmart workers have also staged strikes and protests for higher pay.