McDonald's to raise U.S. workers' hourly pay to $13 in company-owned stores

McDonald's is raising pay at 650 company-owned stores in the U.S. as part of its push to hire thousands of new workers in a tight labor market.

The Chicago-based fast-food giant said Thursday its hourly wages at company stores will increase an average of 10% over the next few months, to $13, and rise to $15 by 2024. Entry-level workers will make at least $11 an hour, while shift managers will make at least $15 per hour, the company said.

But only around 5% of McDonald's 14,000 U.S. stores are owned by the company. The other 95% of stores in the U.S. are owned by franchisees, who set pay in their own restaurants.

McDonald's said it hopes to persuade its franchisees to follow its lead.

"We encourage all our owner/operators to make this same commitment to their restaurant teams in ways that make the most sense for their community, their people and their long-term growth," McDonald's U.S. President Joe Erlinger wrote in a letter to employees.

In a statement, the U.S. National Franchisee Leadership Alliance — which negotiates with the company on behalf of franchisees — expressed support for the wage hikes and encouraged restaurants to stay competitive in their local markets.

McDonald's is the latest restaurant chain to announce pay raises. Chipotle said Monday it will hike workers' pay to an average of $15 per hour by the end of June. Darden Restaurants, the owner of Olive Garden and other chains, said in March it will guarantee workers $12 per hour, including tips, by 2023.

Amazon, Costco and other big companies have also announced pay raises in recent weeks.

Wages and benefits for U.S. workers have been rising quickly as vaccinations increase and employers try to meet growing demand at restaurants and other businesses, amid a worker shortage triggered by the pandemic. U.S. workers' total compensation rose 0.9% in the first three months of this year, the largest gain in more than 13 years, according to the Labor Department. 

"Fancy math tricks"

Still, the political push for a $15 national minimum wage continues to be an uphill battle for workers and unions across the country. The current federal minimum wage of $7.25 an hour has not been changed since 2009.

In response to McDonald's pay increase announcement, the union-backed Fight for $15 campaign denounced what it called in a statement the company's "fancy math tricks to gloss over the fact that they're selling most of us short." 

The labor campaign also reiterated plans to encourage McDonald's workers in 15 U.S. cities to go on strike May 19 to demand the chain increase pay for all its employees to at least $15 an hour. First reported by Vice, the strike is scheduled to take place a day before the company's annual shareholder meeting. 

"We're ready to continue our fight to win $15 for every worker across the country. We won't stop fighting, striking and marching in the streets until we win $15 and a union for all," the statement said.

Democrats are pushing to include the higher minimum wage as part of their $1.9 trillion COVID-19 relief plan. The high number of low-wage workers with little to no savings set aside from their paychecks has left many in dire straits once the pandemic hit, bringing with it recession and double-digit unemployment. 

President Biden in April raised the minimum wage for federal contractor workers to $15 an hour. While opponents of the increase argued it would lead to job cuts, senior administration officials claimed the move would "not lead to reduced employment," but would "enhance worker productivity" and generate higher quality work by boosting heath and morale while reducing absenteeism and turnover costs for employers.