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Battling to hire employees in a tight job market, McDonald’s on Thursday joined a growing list of fast-food and restaurant companies that are lifting hourly wages in the hopes of attracting job seekers.
Earlier this week, Chipotle said it was raising hourly pay at its restaurants in the hopes of hiring 20,000 new employees and, in late March, Olive Garden said it was raising workers’ pay.
Fast-food and casual dining restaurants have struggled to find workers in parts of the country. As coronavirus vaccinations have increased and government restrictions have eased, the restaurant industry, which laid off or furloughed millions of employees during the pandemic, has begun a hiring spree, as have several other service-related industries.
But even as McDonald’s and other restaurant chains raise wages, union activists say it is not enough for the employees who went to work daily during the pandemic and helped the restaurants survive or even thrive.
The McDonald’s pay increases apply only to its 650 company-owned restaurants, not the 95 percent of its nearly 14,000 restaurants in the United States that are independently owned.
“All through the pandemic, these workers were called ‘essential,’ but clearly, once again, they’re being treated as disposable,” said Allynn Umel, an organizing director for the Fight for $15, a group backed by the Service Employees International Union that is pushing for McDonald’s to raise its minimum wage. “Anything less than $15 an hour is an insult.”
Fight for $15 is spearheading a strike by McDonald’s employees in 15 cities across the country next Wednesday ahead of the company’s annual shareholder meeting.
Last year, McDonald’s made $4.7 billion in profits, paying its shareholders $3.7 billion in dividends. Its chief executive, Chris Kempczinski, was awarded more than $10.8 million in total compensation.
That’s a stark difference from Gail Rogers, a 61-year-old cashier at an independently owned McDonald’s in Tampa, Fla. Her shift during the pandemic went from 7 a.m. to 1 p.m., five days a week.
After eight years on the job, Ms. Rogers makes $9.40 an hour with no paid time off or sick days, she said. Unable to afford the maintenance and insurance on her car, she sold it and now takes the bus or bicycles the more than six miles from her home to the McDonald’s where she works. The trek became more difficult after she contracted Covid-19 this year and she said it was difficult at times for her to breathe.
“Fifteen dollars an hour would make a big difference to me,” Ms. Rogers said. “I could see myself with a car again, able to pay the maintenance and insurance, and able to get around a lot better than I am now.”
While the April jobs report released last week showed a significant jump in the number of workers hired in the restaurant and bar sector, employment levels at full-service restaurants in February remained 20 percent lower than they were a year ago, according to the National Restaurant Association. That’s the equivalent of 1.1 million jobs. Employment at fast-food and fast-casual restaurants was down 6 percent over the same period.
Some restaurants say the challenge of hiring workers could slow their own recoveries from the pandemic. But some potential employees — whether concerned about the safety of serving customers dining indoors, buoyed by government stimulus checks or simply unhappy with the pay being offered — are wary of returning to work.
“We’re not only competing with our peer companies out there, and I know everybody is challenged with that,” Greg Levin, the president and chief financial officer of B.J.’s Restaurants, an American grill chain, told Wall Street analysts in April. “We’re also right now kind of competing with the federal government and somewhat of the unemployment subsidies.”
The company estimates that it needs to hire an additional 5,000 employees to return to prepandemic sales levels.
But some analysts say other factors may be playing a role in making it difficult for the restaurant industry to hire, namely employees who left permanently after the volatility of the past year and others who may have found jobs in other, faster-growing sectors.
Amazon, for instance, added more than 400,000 employees last year, and on Thursday said it was planning to hire an additional 75,000 workers. It will offer a $1,000 signing bonus in some locations, and pay an average of $17 an hour.
McDonald’s, hoping to add 10,000 new employees in the next three months, said it would increase hourly wages for current employees by an average of 10 percent and that the entry-level wage for new employees would rise to $11 to $17 an hour, based on the location of the restaurant.
At its company-owned restaurants, McDonald’s said the average employee wage would increase to $13 an hour, with some restaurants getting to an average wage of $15 an hour later this year. All company-owned restaurants are expected to be at an average hourly wage of $15 by 2024, the company said.
But while the coffee chain Starbucks said last year it would raise the pay for all employees to $15 an hour over a three-year span, McDonald’s has been reluctant to commit to a similar minimum-wage move.
In 2019, the company said it would no longer use its powerful lobbying arm to fight attempts to raise the minimum wage to $15 an hour at the federal, state and local level. In a call with Wall Street analysts in January, Mr. Kempczinski, the McDonald’s C.E.O., said the company was doing “just fine” in the more than two dozen states that had increased minimum wages in a phased-in way.
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