With McDonald’s announcement Wednesday that they will be increasing employee wages, some experts are arguing its a clear sign the private sector is capable of such decisions without government coercion.
They will raise wages to a dollar an hour over minimum wage for corporate owned stores on July 1, for an average increase to more than $10 in 2016.
“We’ve been working on a comprehensive benefits package for our employees — the people who bring our brand to life for customers every day in our U.S. restaurants,” Steve Easterbrook, president of McDonald’s, said in a statement. “We’ve listened to our employees and learned that — in addition to increased wages — paid personal leave and financial assistance for completing their education would make a real difference in their careers and lives.”
McDonald’s didn’t stop there. In addition to wage increases, full-time employees will also receive more paid time-off. McDonald’s further announced it will be expanding its Archways to Opportunities education offerings at both company owned and franchised restaurants, which will include free high school completion and college tuition assistance.
“McDonald’s decision to raise wages at its corporately owned stores is more proof that the marketplace, rather than government mandate, is the best booster of employees’ wages,” Michael Saltsman, research director at the Employment Policies Institute (EPI), told The Daily Caller News Foundation.
Franchises like McDonald’s include both corporately owned and privately-owned restaurants. Privately owned restaurants contract with McDonald’s in order to sell its products and use its brand name but usually decide their own employee policies like wage and benefits.
“The company’s decision to follow Gap, Walmart, Target, and TJ Maxx in lifting employees’ base pay, though, does not mean that every other business is also able to raise prices sufficiently to cover the cost of a minimum wage hike,” Saltsman also noted. “The consequences of closed businesses and lost jobs that are playing out right now in Oakland and San Francisco, in response to those cities’ wage mandates, are proof that one size definitely does not fit all.”
Steve Caldeira, the president of the International Franchise Association, also pointed out that the decision is a victory of the private sector’s making.
“Today McDonald’s Corporation announced its intent to increase wages for workers at their company-owned restaurants, and as a company they have every right to make decisions such as this,” Caldeira told TheDCNF.
“The announcement serves as a reminder to policymakers, government agencies and unelected regulators at the NLRB and the Department of Labor, that McDonald’s Corporation is not joint employers with their franchises and makes separate and independent decisions about wages and benefits for employees over which they exercise direct and immediate control,” he continued.
“If the franchisees want to also raise the wages of their employees, they have every right as independent business owners to make decisions that allow them to hire and retain the best employees in the local markets where they operate,” Caldeira concluded.
The minimum wage has become a significant issue in labor policy. Protests and strikes, especially among fast food and retail stores, have appeared across the country. Fight for 15, a group claiming to support minimum wage workers, is holding a national rally Apr. 15.
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