No doubt, you were as impressed as I was to learn that McDonald’s had voluntarily adopted a pay raise for employees in its fast-food restaurants.
Upon closer examination, it turns out that McDonald’s pay raise is about as real for its workers as a Big Mac is healthy for you.
For starters, McDonald’s pay raise is far short of what workers need and deserve. True, under the plan, employees will receive $1 more per hour than the local minimum wage. That means today’s average wage of $9.01 an hour will increase to $9.90 by July, and up to $10 per hour next year, $2.75 above the federal minimum wage. But that’s far short of the $15 per hour compensation that fast-food workers have been demanding.
In an interview with me last week, Mary Kay Henry, president of the Service Employees International Union (SEIU), described McDonald’s move as little more than a ‘PR stunt.’ She announced that she will continue to lead demonstrations in support of fast-food workers’ demands for an increase to a minimum wage of $15 per hour and the right to form a union.”
As shallow as it is, McDonald’s limited wage hike comes at a time when several corporations have voluntarily raised their own minimum wages. Even some American business leaders, starting with Henry Ford, used to believe in: not a minimum wage, but a ‘living’ wage, based on the principle that someone doing a full day’s work should be paid enough to live on.
In 1914, Ford started paying his workers the sum of $5 a day. Once Ford started paying better, job turnover and absenteeism plummeted, and productivity and profits rose.
McDonald’s CEO made $7.7 million in 2013; the CEO of Chipotle, $13.8 million. In the fast-food world, the ratio of CEO salary to average employee wage is 1,000 to 1, the most extreme disparity of any industry.
In other words, McDonald’s principal contribution to America may be forcing most of its employees to live below the poverty line. Think of that, next time you’re tempted to take your kids to the Golden Arches.