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


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© Bloomberg. An employee wearing protective gloves hands an order to a customer through a drive-thru window at a McDonald’s Corp. restaurant in Oakland, California, U.S., on Thursday, April 9, 2020. Photographer: David Paul Morris/Bloomberg

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(Bloomberg) — McDonald’s Corp. (NYSE:) 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.

The hikes, announced the same week Chipotle Mexican Grill Inc (NYSE:). said it would boost its average wage to $15 an hour, come at a time when widespread labor shortages have companies of all shapes and sizes reconsidering worker pay. Even before the pandemic, labor was a major concern for the food industry, with the health crisis only exacerbating the shortage. McDonald’s, heading into a busy summer season as Americans start to venture out, 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.”

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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.

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. Average hourly wages across all company-owned locations are expected to reach $15 an hour by 2024.

©2021 Bloomberg L.P.

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