McDonald's Raising Wages to Fight Pressure from Labor Groups

Rising wages have put increasing pressure on the American labor market, including some of the biggest corporations such as McDonald’s Corp. McDonald’s expects to raise workers’ wages by more than 10% for all the restaurants that operate in the U.S. The wage change will be effective on July 1st. McDonald’s will pay, on top of minimum wage, at least $1 per hour extra for employees at select restaurants. This change will affect more than 90,000 employees’ payroll at the estimated 1,500 restaurants under McDonalds’ ownership in the U.S.

Other major U.S. corporations have made similar efforts, such as Wal-Mart Stores Inc. It has raised hourly wages for more than 50,000 employees across the nation, and plans to do so for at least the next 10 years.

McDonald’s Chief Executive Steve Easterbrook stated that McDonald’s is currently trying to reinvent itself as “a modern, progressive burger company”. The corporation is planning to offer more educational opportunities for its employees. The policy is a significant movement in response to employee surveys and plans to increase McDonald’s sales after more than two consecutive years of declines.

McDonald’s has been under the Labor groups’ pressure. It has long been criticized for the healthiness of its food, wage levels and the quality of its working environment. There have been a number of protests against McDonald’s to raise wages, notably under the banner “Fight for 15%”. However, Easterbrook claims that the protests are not factored into its decision to raise employees’ wages.

Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management, expects other chains in the industry to take the same initiatives, increasing workers’ wages, in order to remain competitive. He claims “companies do not want to seem like they’re lagging behind when it comes to high-profile issues like this.”

-- Fiona Xiao