Blog #7; McDonalds to give a pay raise to hourly workers

McDonalds to give a pay raise to hourly workers

McDonald’s states it going to raise the pay for workers at company-owned US locations. This makes it the latest employer to increase worker incentives in the improving economy. Company owned restaurants account for 10 percent of the more than 14,300 US restaurants. The remaining 90 percent are run by franchisees and they “make their own decisions on pay and benefits.” Many other major companies, including Wal-Mart Stores Inc., have also announced wage increases. In the past 12 months, there has been a 1.2 percent decrease of the unemployment rate. President Mike Andres states, "It's a very competitive environment and a significant rationale for this plan is that we want to be the most competitive and attractive employer.”

McDonald’s has also been dealing with negative publicity from demonstrations over pay and labor practices at its restaurants, so the change comes at a great time. Worker groups have been pressuring the company with lawsuits and cases filed with the National Labor Relations Board and U.S. Occupational Safety and Health Administration on behalf of workers, in addition to ongoing protests since late 2012. Andres said few McDonald's workers are "not taking a toll.”

Kwanza Brooks, a McDonald’s employee of North Carolina called the move "too little to make a real difference" and said that it only covers a fraction of workers.

Beginning July 1, McDonald's starting wages will be one dollar more than the local minimum wage where company-owned restaurants are located. Wages will be adjusted accordingly based on tenure and performance, it said. By the end of 2016, it said the average hourly wage for McDonald's workers at those stores will be more than $10 an hour, up from $9 an hour. In addition to wage increases, McDonald's says workers at company-owned stores will get paid time off. Employees who have worked for the company for at least a year and work an average of 20 hours a week will be eligible to accrue about 20 hours of paid time off a year. Workers who don't take the time off will be paid for the value of that time, McDonald's said.

McDonald's Chief Administrative Officer, Pete Benson, stated last month that at the time a big part of the turnaround effort in the U.S. would be what the company is doing "around the employment image and our employee-employer relationship."

McDonald's U.S. business has been struggling, with customer counts and sales at established locations falling two years in a row. The company named Steve Easterbrook, its chief brand officer, as its new CEO in January. Easterbrook stated, "We know that a motivated workforce leads to better customer service so we believe this initial step not only benefits our employees, it will improve the McDonald's restaurant experience."

McDonald's also said it is expanding benefits to help workers at company- and franchise-owned restaurants complete high school and college, although there were no details provided about this.

Although this news is a step in the right direction, I believe that what Kwanza Brooks stated is true. McDonald’s is only making a change in 10 percent of the stores nation wide. I think that it is great that they are offering paid time off, even for part time employees.  It seems as though they are making a step in the right direction, but I definitely think that they could do a better job. I know that working at McDonald’s is not a job that requires many skills, however, I do believe that people should be given the right to earn a living wage in such establishments. I understand that 90 percent of the restaurants in the United States are owned by franchisees, but I do believe that they could be included in the increase. It doesn't seem fair to only see an increase in a small percentage of a company, and give them praise. I know if I were a worker in a franchisee owned McDonald's, I'd be trying to transfer to a corporate owned one immediately.  It is not fair that someone doing the exact same job, potentially in the exact same area, is getting paid one dollar more per hour and gets a benefits package just because of who the owner of the restaurant is. Is there no way that they could include a company wide minimum wage and benefits package in the corporate contract with the franchisees?