McDonald’s Boosting Average U.S. Wages to Over $13 an Hour

McDonald’s Corp. will raise hourly wages to help it hire and retain workers in an increasingly tight labor market for U.S. restaurants.

The raises, which average about 10%, bring hourly entry-level salaries to a range of $11 to $17, with managers starting at $15 to $20, depending on location. Once the raises are completed, average hourly pay at company-owned restaurants will be more than $13, McDonald’s said.

More than 36,500 employees are slated to receive this round of hikes, which have already started and will be fully rolled out in the coming months, the company said. Average hourly wages across all company-owned locations are expected to reach $15 an hour by 2024.

The pay hikes are another sign of inflationary pressures building in the U.S. economy, as bottlenecks in the supply of goods and labor meet surging demand in the economic reopening. Consumer prices jumped last month by the most in more than a decade, and companies report paying soaring costs for everything from construction materials to food.

The concern among some economists is that wage and price increases could feed off each other and create an inflationary spiral, though most expect that living costs will settle down after a temporary spike this year.

Hiring 10,000

The restaurant industry is among several that have been forced to reconsider how much they pay workers who’ve been reluctant to resume low-wage and potentially high-risk jobs during a health crisis. Earlier this week, Chipotle Mexican Grill Inc. said it would boost its average wage to $15 an hour.

Even before the pandemic, labor was a major concern for the food industry. Now companies are trying to boost staffing ahead of a busy summer season as Americans start to venture out. McDonald’s is looking to hire 10,000 new employees at its company-owned stores over the next three months alone.

Only employees at the chain’s 650 company-owned stores will get the pay increases at this time, not those at franchised locations where management makes its own decisions on wages. But franchisees are looking at wages, too, said Mark Salebra, chairman of the U.S. National Franchisee Leadership Alliance.

“Together with our franchisees, we face a challenging hiring environment, and staying ahead means we must constantly renew our commitment to offer one of the leading employment packages in the industry,” Joe Erlinger, president of McDonald’s USA, said in a message seen by Bloomberg. “Simply put: putting our people first and doing the right thing for them will drive continued growth for our business.”

Federal Debate

Pressures are building on employers to raise wages, or offer signing bonuses, to lure workers back as the economy broadly reopens. Some businesses have blamed beefed-up unemployment benefits for holding back hiring and several states have moved to curb them.

Some workers weren’t satisfied with the raises, with activist group Fight for $15 and a union urging the company to raise minimum wages to $15 across the board.

“We’ve showed up to work day after day in the middle of a global pandemic, risking our lives without proper PPE or paid time off to keep your stores open and corporate profits flowing,” the group’s leader, Doneshia Babbitt, said in an emailed statement. You’ve called us essential for over a year, but your announcement today proves that you’ve seen us as disposable all along.”

The group plans to strike in 15 cities on May 19, the day before McDonald’s annual shareholders meeting, to demand $15 an hour for all workers. It said it couldn’t share yet how large it expected the strike to be.

Wages for restaurant workers have climbed steadily in recent years, though the trend eased during the Covid-19 pandemic, data from the Bureau of Labor Statistics show. With Democrats in control of Congress, there’s been more discussion in 2021 about raising the national minimum wage to $15 an hour, a plan endorsed by President Joe Biden.

Biden signed an executive order last month that raises the minimum wage for federal contractors and tipped employees working on government contracts to $15 an hour, but efforts to raise the national minimum wage appear to have stalled.

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