Why is McDonald’s raising its wages?
Apr 2, 2015, 8:35 AM | Updated: 9:25 am
McDonald's CEO Steve Easterbrook said a motivated work force leads to better customer service. (AP)
(AP)
A year ago, the minimum wage seemed like nothing more than Seattle idealism, and now, it’s a national conversation. You see companies starting to adopting it voluntarily.
Wal-Mart stores announced plans to boost pay for its U.S. employees to at least $10 an hour by next year.
Related: McDonald’s joins Wal-Mart, Gap, other cos. in raising wages
Target has been telling employees that the higher wages will go into effect this spring.
IKEA is raising wages.
Locally, Ivar’s raised wages immediately to $15, along with menu prices, at its sit-down restaurants and end tipping.
The latest is McDonald’s, which yesterday announced that it would raise wages for employees in the 1,400 outlets that it operates. It affects 90,000 employees. This does not affect the other 12,500 McDonald’s restaurants that are run as franchises by local investors, however.
It doesn’t mean wages are suddenly going all the way to $15. The new policy is to raise wages to at least $1 over the local legal minimum, which as of now, would mean $12 in Seattle.
The corporate stores would also give paid time off to employees who work an average of 20 hours a week, and will provide tuition assistance for college classes.
The policies come from Steve Easterbrook, who took over as McDonald’s CEO a month ago. He said a motivated work force leads to better customer service.
The question: Is this because of the minimum wage campaign or other forces?
McDonald’s is trying to deal with a 4 percent drop in sales and Easterbrook apparently thinks part of the problem is motivating employees. He’s also facing a union push to organize workers, which may end up forcing the corporation to negotiate with employees even if they work for a locally-owned franchise.
A McDonald’s spokesperson, or “chief people officer” as she’s called, said the wage increase has nothing to with the minimum wage campaign, but was in response to a survey among employees that showed their main priority was better wages and benefits. That’s a shocker!
Labor groups weren’t impressed, pointing out that McDonald’s made a $5 billion profit last year and pays its CEO $13.8 million.
But all of these increases will likely have a ripple effect because the best workers tend to go where the wages are higher.
McDonald’s is going to need a higher caliber of worker because of its other big decision, which is to serve breakfast all day. Some local owners are worried the grills can’t keep up with two menus.
I think part of (raising wages) has to be social media and people who can’t, in good conscience, go and eat or buy something from a store where people are struggling to make ends meet. It just doesn’t seem right that you work full time and then have to go on welfare. You’d eventually pay for that too, right?
