In a press release this week, McDonald’s announced it would raise workers’ wages to at least $1 above the local minimum and will aim for an average pay of $10 by the end of 2016.
Unfortunately, the wage hike applies only to restaurants owned and operated by McDonald’s itself but not franchised restaurants, which make up nearly 90 percent of McDonald’s stores (although some are speculating that franchisees will likely feel pressure to follow suit).
McDonald’s also announced that it will start letting workers accrue paid vacation time once they have been with the company for at least a year.
Alongside similar decisions by Walmart, Target, and others, McDonald’s announcement reflects just how much the public conversation about income inequality has shifted. These companies are feeling the pressure from worker protests which are fueling wider public discontent over income inequality.
And make no mistake: this is about income inequality, not just poverty-level wages. Nearly two-thirds of low-wage employers in America are large, wealthy corporations like Walmart, Target, and McDonald’s.
With soaring profits and extravagantly-paid executives, it’s no wonder these companies are the ones feeling the most pressure to raise workers’ wages. According to the National Employment Law Project, the 50 largest employers of low-wage workers are highly profitable, large corporations with executive compensation averaging $9.4 million.
That’s one of the reasons McDonald’s workers aren’t lovin’ this wage hike. As one worker affiliated with the Fight for $15 put it, this is a “weak move for a company that made $5.6 billion in profits last year.”
A weak move, indeed. This decision raises wages by just a fraction for a very small portion of McDonald’s workers. Mostly it allowed the fast food giant – which has been under increasing scrutiny for labor practices – to grab some positive headlines. It will boost wages for a few, but not significantly.
The Fight for $15 group has made clear that McDonald’s announcement won’t slow them down. “Hey McDonald’s: we said $15 and a union for everybody. See you on April 15,” they tweeted in response. Another worker tweeted, “We are not a value menu. We’re worth more than a $1 raise.”
If McDonald’s thought this move would cause worker protests to get quieter, they miscalculated. Those demands are about to get super-sized.