In an evolving labor market, McDonald’s, the fast-food behemoth, has made notable adjustments to its pay structure to stay competitive, aiming to boost the average hourly wages for its U.S. company-owned restaurants. But how much does McDonald’s pay? That answer depends on a lot of conditions.
Is pay at McDonald’s increasing?
As of May 2021, per CNBC, McDonald’s announced a 10% increase in hourly wages for employees at its company-owned locations, part of a broader industry trend involving employee pay and benefits enhancements due to a noticeable fast-food sector labor crunch. These adjustments aim to propel the average wage to $15 per hour by 2024. At that time, McDonald’s sought to hire 10,000 workers over the subsequent three months to accommodate roaring consumer demand.
How much does McDonald’s pay?
Per Zippia, the average salary of McDonald’s crew members is approximately $26,648 in the U.S. in 2023, with hourly rates between $9 and $16 and varying considerably depending on location, education, and experience.
McDonald’s employees in Oregon, Alaska, and California typically earn the highest average salaries. While entry-level employees can expect to earn between $11 and $17 per hour, shift managers typically make between $15 and $20 per hour, depending on the location. And as of April 2024, a state law requires California fast food workers to be paid a minimum of $20 per hour.
McDonald’s employees and the ‘Fight for $15’
For over seven years, employees at McDonald’s and other fast-food chains have been active participants in the “Fight for $15” movement, advocating for a fair minimum wage. This persistent dissatisfaction over wage practices has directed substantial attention to the industry’s payment structures. The push for higher wages posits a potential dilemma for McDonald’s and its franchisees, balancing maintaining profits and providing equitable compensation to its workforce, primarily since 90% of its locations are owned by franchisees operating on slim profit margins.
Why can’t McDonald’s just pay all its employees $15 an hour?
A minimum wage of $15 translates to $30,000 annually for a full-time employee. Many argue that with millions in profit, corporations like McDonald’s could afford substantial pay increases. According to Workstream, most McDonald’s locations, independently owned by franchisees, operate on tight budgets, with roughly 6 cents profit per dollar after expenses.
At the same time, McDonald’s CEO Chris Kempczinski reportedly made around $20 million from the company back in 2021. The year prior, he made close to $11 million, despite the company failing to hit performance targets. As CNBC points out, not all of this is salary, but includes stock and option awards, as well as company perks. Still, even that $10.8 million in 2020 was nearly 1200 times as much as the median McDonald’s worker made that same year—$9,124.
But a wage increase for the average worker would undoubtedly be passed along to the customer, leading to price hikes and potential backlash from customers already frustrated with how expensive the fast food franchise has become.
What do wage increases mean for McDonald’s?
The proposed wage increases also shed light on employment dynamics within the industry, as higher wages and automation could potentially reduce employment opportunities, impacting young adults the most. For instance, the widespread adaptation of self-service checkout kiosks, a common sight in various parts of the world, can replace several entry-level positions.
McDonald’s wage adjustment highlights the complex dynamics of balancing employee compensation, operational costs, and profit margins. While the fight for a fair wage continues, McDonald’s, with its recent wage increases, reflects a broader industry trend towards enhanced employee benefits and competitive pay, taking a step towards addressing the ongoing debates surrounding wage standards in the fast-food industry.
The varied wages across different roles and locations within McDonald’s exemplify the intricate landscape of employee compensation in the fast-food sector, a delicate equilibrium between fair wages and sustainable business operations.
Editor’s note: This article is regularly updated for relevance.
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