McDonald's CEO Giving 90,000 Hourly Employees a Raise

You deserve a break today, McMinimum wagers, so your new CEO has decided to hike your hourly wage by $1 over the legally mandated minimum.

In the city of Chicago, that will be $10 an hour as of July 1, a $1.75-an-hour increase over the current rate. Presumably, your Windy City Mickey D’s will be paying $11 an hour.

CEO Steve Easterbrook announced the decision in an opinion piece published Wednesday in the Chicago Tribune. McDonald’s corporate headquarters is in west-suburban Oak Brook, the scene last May of a large wage protest during a shareholders meeting.

Organized labor groups have targeted McDonald’s with protests in the last two years, demanding a $15-an-hour wage. McDonald’s said Wednesday’s announcement is a first step.

Easterbrook writes:

As the new CEO of McDonald’s Corp., I’m taking action to make McDonald’s a modern, progressive burger company on many fronts, focusing specifically on the consumer perception of our food, and our people. I believe the time is right to take a first step in rewarding our team members who work so hard every day. Wage is just one part of the equation.

The McDonald’s rate hike — which applies to company-owned restaurants only — takes effect on July 1, nationwide. That means 90,000 people at 1,500 restaurants will be getting a raise.

The 3,100 owner-operator franchisees, however, must make their own decisions about pay rates. The federal minimum wage is $7.25, although several states mandate a higher minimum.

By the end of 2016, we project that the average hourly wage rate for McDonald’s employees at company-owned restaurants will be in excess of $10. In addition, we’re offering paid personal time off for any reason to restaurant crew members who have been with us for at least one year. If they choose not to take the paid leave they’ve earned, they will get a check for the value of that time. We understand that life balance is important and believe that this will make a difference for our people.

Bloomberg.com notes that McDonald’s is following in the footsteps of other multinational chains, such as Wal-Mart, Target and TJ Maxx, which have decided to increase hourly pay rates to at least $9 an hour.

John Gordon, founder of Pacific Management Consulting Group in San Diego, told Bloomberg the improving economy is a factor, too.

“With the economy picking up, restaurants everywhere have had higher turnover,” Gordon said. “They don’t feel like they have to stay at the same place.”

Easterbrook took over as CEO on March 1. He call himself the company’s “internal advocate” for change.

McDonald’s will not compel franchise owners to increase pay, however.

In fact, the company has been fighting a position claimed by the National Labor Relations Board’s general counsel that McDonald’s has sufficient control over franchisees to insist that owners hike pay, reports the Wall St. Journal.

MAY 2014’S PROTEST AT McDONALD’S HQ IN OAK BROOK

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