Though McDonald’s seems to have passed its prime as a go-to place for American diners in a hurry, it remains a huge force in the nation’s economy and labor market. The company and its franchisees employ more than 800,000 people in the United States.
So it’s a bit of good news for workers that McDonald’s plans to give a blanket pay hike for employees of the 1,500 restaurants wholly owned by the corporation. The company announced this week that it will raise its entry-level pay by about 10 percent, to a dollar an hour above the local minimum wage.
The move applies only to the 90,000 employees who work directly for McDonald’s, and not to 750,000 employees of more than 12,000 McDonald’s franchises around the U.S. But many of those franchises will probably follow the parent company’s lead. And new education benefits – help with completing a high school diploma or starting college – will be available to all McDonald’s employees.
The changes are an initiative of the company’s new chief executive, Steve Easterbrook, who started his job a month ago after his predecessor was forced out by a board of directors concerned about declining sales and profits.
Easterbrook said the moves were designed to help recruit and retain higher-quality employees and not a response to recent protests and union organization drives highlighting the fast-food industry’s low-end wages.
McDonald’s may see many upsides to raising pay, including simple good public relations, but Easterbrook’s explanation rings true. Flipping burgers at McDonald’s can be a great first job. An estimated one in eight American workers has toiled for the chain at one time or another. But the company has a hard time keeping employees once they are trained and have work habits they can leverage into something better.
That high turnover can lead to service and sanitary conditions that don’t meet company standards, which once were the envy of the industry. So it is in the chain’s own financial best interests to pay wages that are more competitive.
But workers and their advocates shouldn’t see this wage hike as unalloyed good news. For one thing, despite the protests about the need for a “living wage,” many McDonald’s employees are not heads of households but teenagers and college students looking to earn a few bucks to help out with expenses. Combine that fact with the relatively modest pay hike planned, and it appears that the higher pay is not going to make much of a difference for Americans trying to support a family.
More ominously, the more it costs to hire an extra fast-food worker, the more attractive automation is going to look to McDonald’s and other companies. Some firms are already experimenting with tablet-based menus that allow customers to place and pay for their own order without the need for a cashier. That trend might soon pick up steam.
Still, McDonald’s employees definitely deserve a break today. And they just got one.