In keeping with the Biden Administration’s call to increase the minimum wage, fast-food giant McDonald’s announced that it would be raising wages by at least 10% in a bid to attract new staff. However, in a statement released last May 13th made it clear that this pay raise only applies to a small number of McDonald’s employees.
Under the new salary grading system, entry-level workers can earn between $11 to $17 per hour, while shift managers’ hourly rate is set between $15 and $20.The company advised that hourly wages at restaurants should be at least $15 by 2024.
It is estimated that the pay hike will only affect 36,500 employees working at McDonald’s company-owned branches which only make up 5% of all its stores in the United States. All other stores in the country are owned and operated by franchisees who are allowed to set their own rules regarding employee compensation.
Despite the increase, McDonald’s still falls short of the $15 minimum wage supported by President Joe Biden, labor advocates, and a number of Democrats in Congress.
Getting ready to reopen
McDonald’s announcement comes at a time when restaurants across the country are reopening their doors to the public. As a result, establishments are either calling back employees who were sidelined or retrenched due to staffing cuts brought about by the pandemic or staffing with new hires.
According to the Bureau of Labor Statistics, over 5.5 million restaurant workers lost their jobs as their workplaces staggered opening hours, and customer traffic nearly drew to a halt because of pandemic-related restrictions.
While restaurants and bars added over 176,000 jobs as of March this year, it may take time before employee numbers return to pre-pandemic levels. The American restaurant industry is still 15% – around 1.8 million jobs – short of pre-COVID numbers.
Still not enough
In fact, the restaurant industry has earned notoriety in recent years from complaints of underpayment and unethical treatment of workers.
Likewise, toxic work culture and unhealthy working conditions have contributed to the significant drop among those entering the food-and-beverage industry.
With restaurants poised to reopen in the wake of growing numbers of vaccinated communities, both large chains and independent operators are mass-hiring new staff for their operations
But according to a sizable number of restaurant owners and operators, their hiring sprees are not as effective as they used to be. Posting that used to draw in hundreds of potential new hires are not attracting as many applicants as restaurants want,
Industry experts and human resource management professionals opine that, if restaurants are unable to bring in new hires, the industry may face a serious labor shortage on reopening.
McDonald’s is not the only restaurant that is raising wages to draw in new employees; the tactic is also being used by a number of other popular restaurant chains across the country. Darden Restaurants Inc. (DRI), the parent company of Olive Garden and a number of other eateries, also announced a pay hike for employees last March. Fast-casual chain Chipotle is also raising hourly wages to $15 and is looking into giving some long-standing employees six-figure paychecks.