Following Similar Announcements from Wal-Mart and Target, McDonald’s is Raising Wages
OAK BROOK, IL - McDonald's has announced plans to raise its minimum wage to an average of $9.90 by July, up from $9.01. The move will affect around 90,000 employees across its 1,500 company-owned locations in the United States.
This increase doesn’t apply to employees of franchisees, according to The Wall Street Journal. Critics cite that franchisees operate nearly 90% of the 14,350 U.S. McDonald’s stores, so the wage increase may not be as effective as it may sound at first glance.
McDonald’s Chief Executive Steve Easterbrook said the policy is a response to employee surveys and is central to his plans to revive sales following two years of declines.
“Motivated teams deliver better customer service,” Easterbrook said in an interview, “and delivering better customer service in our restaurants is clearly going to be a vital part of our turnaround.”
This wage increase comes on the heels of other major companies making similar announcements, including Wal-Mart, T.J. Maxx, and Target. According to the Washington Post, some economists have interpreted these moves as evidence that demand for service workers is outstripping supply. Unlike those retailers, which set an initial floor of $9 an hour, McDonald's will instead set its minimum at $1 above the local minimum wage wherever the employee works.
Often these employee-friendly moves come in the wake of leadership shakeups, reports The Washington Post, and McDonald's is no exception. Chief Executive Steve Easterbrook took over on March 1 and has promised to reinvent the chain as a "modern, progressive burger company."
"We've listened to our employees and learned that — in addition to increased wages — paid personal leave and financial assistance for completing their education would make a real difference in their careers and lives," Easterbrook said in a statement.
Average hourly earnings for non-manager employees at limited-service restaurants like McDonald’s rose to $9.54 an hour in January, up 3.5% from a year earlier, according to Labor Department data, well above the 2.2% pace for all private-sector workers.
