Just days before a planned strike in 15 major U.S. cities to demand McDonald's pay all of its workers at least $15 an hour, the company has announced wage increases at company-owned restaurants by an average of 10%. The company expects that the average wage for an hourly employee at one of its restaurants will be $15 by 2024.
This falls far short of demands being made by the potential strikers. McDonald's workers have largely embraced the Fight for $15 campaign, a nationwide movement to move the minimum wage for all employers to $15. In addition, the workers are demanding union recognition, paid medical leave, and better health protections during the coronavirus pandemic.
“Our demands haven’t changed,” said Doneisha Babbit, a McDonald’s worker in St Louis who works with the Fight For $15 campaign.
“Clearly, McDonald’s understands that in order to hire and retain talented workers, something needs to change,” she said in a statement. “You’ve called us essential for over a year, but your announcement today proves that you’ve seen us as disposable all along.”
The food services industry as a whole is facing significant labor shortages, with many restaurants forced to reduce services or delay reopening altogether. One McDonald's franchise chain in Florida is offering $50 to applicants just to show up for job interviews.
In a sharp contrast with McDonalds, Chipotle announced it was raising its current average wage of $13 an hour by another two dollars, bringing it to around $15 by June.
"Wage inflation is real and employee availability is very tough and Chipotle is trying to stay ahead of the curve and maintain its human capital advantage by moving average wages to $15/hour by June," explained Jefferies restaurant analyst Andy Barish in a research note to clients.
"This raises bigger questions as demand is surging and some people have left the industry and/or are on the 'sidelines,' given the current Federal unemployment supplements that run until September," Barish added.
The movement towards higher hourly wages is not limited to food services. Retailers Target and Amazon both upped their minimum wage to $15 an hour, pressuring Walmart to do so for about a third of its employees.
The Biden administration was prevented from inserting a $15 per-hour federal minimum wage in its $1.9 trillion coronavirus relief package in February due to a ruling by the Senate parliamentarian. It was the closest the federal government has come to raising the minimum wage to a level that activists have been fighting for over the past decade. Now, it appears the market may be taking the matter into its own hands.
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