McDonald's To Raise Starting Pay $1 Over Minimum Wage
CHICAGO (CBS) -- Approximately 90,000 McDonald's employees working at company-owned stores will start getting slightly larger paychecks this summer, and will even receive paid vacation, as the fast food chain seeks to attract more reliable workers.
The move comes after nearly three years of protests by fast food workers demanding the company provide a $15-per-hour minimum wage.
However, the Oak Brook-based company's move to increase wages amid an improving economy falls short of such demands. Instead, as of July 1, McDonalds will begin paying a starting wage $1 more per hour than the local minimum wage.
"If you can retain or attract and retain the talent and have motivated teams in a restaurant, typically we will see better levels of customer service and that will help us in this competitive environment we're in," company CEO and president Steve Easterbrook told CBS This Morning.
For most of Illinois, that means McDonald's workers will be making at least $9.25 an hour starting this summer. In Chicago, where the mayor and aldermen have approved a gradual increase in the minimum wage over the next five years, that means McDonald's workers will make $11 an hour starting in July; $11.50 next summer, $12 in 2017, $13 in 2018, and $14 in 2019.
McDonald's is also offering workers vacation benefits.
The pay hike and vacation time for McDonald's workers would not apply to franchise restaurants, which make up about 90 percent of its locations. As those restaurants are independently owned, wages and other benefits are up to each individual franchise-holder.
Pradeep Chintagunta is a marketing professor at the University of Chicago Booth School of Business. He says the move by McDonald's at the corporate level could put pressure on the franchisees.
The company also launched a new fashion line, benefiting their Ronald McDonald House Charities. There's even bedding and rain boots.
"If McDonald's is able to convey the fact that the reason they're doing this is to benefit society as a whole, then I think that's a much more powerful message than someone walking around with a Big Mac on their sleeves," Chintagunta said.
Organizers of the Fight For $15 campaign planned a protest at the McDonald's at 95th and Halsted streets on Thursday. They said the pay raises are insufficient, and will only benefit 10 percent of McDonald's workers. They called the move a publicity stunt by McDonalds, and vowed to keep fighting until all McDonald's employees make at least $15 an hour.