Why McDonald’s is supersizing its wages
F OR YEARS McDonald’s has been a prime target of the battles of labour-rights campaigners over miserly pay. The day before its annual general meeting on May 20th Fight for $15, an advocacy group, organised a strike of McDonald’s workers in 15 cities across America. The strike went ahead despite the firm’s vow a week earlier to raise wages. The company said that its 36,500 in-house employees will get a rise of 10% on average, that entry-level wages for new hires would go from $11 to $17 an hour and that average wages for all staff paid by the hour would reach $15 by 2024. It added that it wants to hire 10,000 people for the 650 restaurants it owns outright over the next three months.
McDonald’s followed Chipotle and Olive Garden, two other restaurant chains that recently announced wage increases while they try to recruit staff as America reopens for business. The fast-food giant has room to reinvest in labour, says Sara Senatore at Bernstein, a broker. It reported growth of same-store sales in America of 14% in the first quarter, year on year, thanks to a boom in online orders. Because people spent twice as much when they buy from home, and 20% more ordering via mobile devices, the company’s operating margin hit 44.5%, the highest in years.
McDonald’s is not raising burger prices just yet to offset the extra costs. The…
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