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McDonald’s to boost wages for 90,000 workers

Marketplace Contributor Apr 1, 2015
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The list of companies that have raised their minimum wage lately, companies like WalMart, Target, TJ Maxx and IKEA, got one longer today.

McDonald’s announced it will raise hourly wages by 10 percent, at the approximately 1,500 restaurants it operates directly.

The move will affect about 90,000 employees, which the company’s new CEO Steve Easterbrook said will bring average hourly pay up to $9.90 by July. The company said it hopes its franchisees — which operate another 14,000 McDonald’s locations — will follow suit. 

“These increases come after several years of wages barely keeping up with inflation,” says Krissy Clark, who covers low-wage work for Marketplace’s Wealth and Poverty Desk. “So in some ways it’s a bit of a game of catch-up.”

The economy is also catching up to the demand for jobs. Skilled workers who may have resorted to entry-level jobs in retail and restaurants are returning to higher paying positions. That applies more pressure to lower wage employers to raise pay and attract the workforce they need. 

Fast food workers have staged strikes in recent months seeking a $15 hourly wage. The National Employment Labor Project (NELP) sought to temper enthusiasm, calling it a “modest gesture.”

In a statement, NELP Executive Director Christine Owners said the increases will “boost pay a little for a small number of the hundreds of thousands of men and women who are trying to make a living selling McDonald’s food and burnishing McDonald’s brand.”

And yet, advocates see their actions as directly contributing to the wage increase. 

“One McDonald’s worker who is paid about $7.25 an hour right now said, ‘Because we joined together and stood up, McDonald’s was forced to raise pay,'” Marketplace’s Clark said. And yet, they’re still pushing for more. 

“A wage of $10 an hour is still going to mean, for many of those families, that they still qualify for public assistance,” Clark noted. 

One retailer whose wage bump is making a bigger difference? IKEA.

“They’re the only company so far that has tied their wage raises to a living wage calculator, where they’re actually trying to say, we want to make sure that you don’t have to rely on public assistance if you’re working for us,” says Clark

More information on growing wage pressure — from competitors and market forces overall — when we get jobs data on Friday.

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