The federal minimum wage of $7.25 an hour hasn’t increased since 2009, although 29 states have set minimums above the federal level, as have cities such as San Francisco, which requires pay of at least $11.05 an hour. Efforts in Congress to increase the pay floor stalled last year. But a growing number of large employers raising wages could set a “de facto” minimum wage that is higher than the federal floor, said University of Michigan economist Donald Grimes. McDonald’s announcement didn’t satisfy its strongest critics, who have been calling for much larger increases and demanding the company take responsibility for pay and other policies at its franchisees. “They say they’re raising wages, but this is nothing near a living wage—it’s just smoke and mirrors,” said Bleu Rainer, a 26-year-old who said he works at a franchise-run store in Tampa, Fla. ‘Motivated teams deliver better customer service and delivering better customer service in our restaurants is clearly going to be a vital part of our turnaround. ’ —McDonald’s CEO Steve Easterbrook Fast Food Forward, a group backed by the Service Employees International Union, has helped organize nationwide protests at McDonald’s and other chains demanding a $15 hourly minimum and the right to form a union without employer backlash. The next round of protests is scheduled for April 15, according to organizers. “They think this will make us back down, but they’re wrong,” Mr. Rainer said. In addition to the wage increase, McDonald’s said it will enable workers after a year of employment to accrue up to five days of paid time-off annually.
The federal minimum wage of $7.25 an hour hasnt increased since
2009, although 29 states have set minimums above the federal level,
as have cities such as San Francisco, which requires pay of at
least $11.05 an hour. Efforts in Congress to increase the pay floor
stalled last year. But a growing number of large employers raising
wages could set a de facto minimum wage that is higher than the
federal floor, said University of Michigan economistDonald
Grimes.McDonalds announcement didnt satisfy its strongest critics,
who have been calling for much larger increases and demanding the
company take responsibility for pay and other policies at its
franchisees. They say theyre raising wages, but this is nothing
near a living wageits just smoke and mirrors, said Bleu Rainer, a
26-year-old who said he works at a franchise-run store in Tampa,
Fla.Motivated teams deliver better customer service and delivering
better customer service in our restaurants is clearly going to be a
vital part of our turnaround.McDonalds CEO Steve EasterbrookFast
Food Forward, a group backed by the Service Employees International
Union, has helped organize nationwide protests at McDonalds and
other chains demanding a $15 hourly minimum and the right to form a
union without employer backlash. The next round of protests is
scheduled for April 15, according to organizers. They think this
will make us back down, but theyre wrong, Mr. Rainer said.In
addition to the wage increase, McDonalds said it will enable
workers after a year of employment to accrue up to five days of
paid time-off annually.The company also plans to make subsidies for
some education costs available to all 750,000 U.S. workers,
including at franchisees.Even though it doesnt apply to franchised
restaurants, the pay raise also could upset franchisees, many of
whom feel pressure to match McDonalds in order to remain
competitive, said franchisee consultant Richard Adams of Franchise
Equity Group. That would mean the franchisee will have to raise
prices, which may or may not cover the increased labor costs, he
said.McDonalds sets many requirements for franchisees, but not
worker wages. It is currently fighting complaints by the National
Labor Relations Boards general counsel that claim McDonalds has
sufficient control over franchisees operations to make it a joint
employer responsible for the rights of franchise employees.
