McDonald’s Increases Pay And Benefits For Workers

CREDIT: AP PHOTO/SETH PERLMAN
CREDIT: AP PHOTO/SETH PERLMAN

McDonald’s will pay all workers at the restaurants it operates directly at least a dollar above their local minimum wage at all of its roughly 1,500 restaurants starting July 1, the Wall Street Journal reports. While the federal minimum wage is $7.25, the majority of states have higher wages.

The company said it will increase wages by more than 10 percent across the board, lifting its average hourly wage to $9.90 starting in July and by $10 by the end of 2016. The current average is $9.01. About 90,000 employees will see a raise. The increase won’t apply to restaurants operated by franchisees, however, which is nearly 90 percent of the stores across the country, as it says they are free to set their own pay policies.

Advertisement

As part of the same announcement, the company said that it will give workers who have been with the company for more than a year up to five paid days off a year.

The company’s CEO, Steve Easterbrook, said the change is part of his plan to increase lagging sales. “What we need to underpin that is highly motivated teams in our restaurants,” he told the Journal. “Motivated teams deliver better customer service and delivering better customer service in our restaurants is clearly going to be a vital part of our turnaround.” Easterbrook took over after previous CEO Don Thompson stepped down in January. Thompson oversaw a three-year term in which the company underwent many financial struggles, including more than two years of declining sales, and high-profile labor fights.

One of those fights has centered around striking employees who have joined with other fast food workers to demand at least $15 an hour and the right to form a union. Workers have also sued the company for alleged wage theft and dangerous working conditions. Those lawsuits, which hold both local franchisees as well as the national corporation accountable, have gotten backing from the National Labor Relations Board.

One of the workers who has been organizing for a higher wage, Kwanza Brooks, credited those efforts for the wage announcement in an emailed statement. But, she added, “this is too little to make a real difference, and covers only a fraction of workers. It’s a weak move for a company that made $5.6 billion in profits last year. We’re going to keep fighting until we win $15 and union rights for all fast-food workers and our families.”

Advertisement

McDonald’s announcement comes after a number of retailers said they would similarly raise their lowest wages voluntarily. Last year, Gap said it would raise its minimum wage to $10, and Walmart has said the same. TJX, owner of TJ Maxx and Marshall’s, and Target both will raise their wages to $9 an hour.