In a surprise move that could bolster the Democrat’s Raise the Wage Act, McDonald’s Corp. said this week that it would not invest resources in opposing minimum wage increases at the federal, state, or local levels, according to a letter the Chicago-based chain sent to the National Restaurant Association.
Genna Gent, vice president of U.S. government relations, said McDonald’s — a frequent target of labor advocacy groups — would not participate in “efforts designed expressly to defeat wage increases.”
“We believe increases should be phased in and that all industries should be treated the same way,” according to the March 26 letter. “We look forward to engaging with elected leaders on these and other important elements of the wage discussion.”
The announcement comes after Democrats introduced the Raise the Wage Act earlier this year, which proposes to increase the federal minimum wage from $7.25 an hour to $15 an hour by 2024. Similar to labor laws recently approved in other states like California, the bill calls for a gradual increase in wages each year.
McDonald’s position is in stark contrast to the NRA, a trade group that represents more than 500,000 restaurant businesses. The organization maintains that the proposed federal wage hikes would hurt restaurants in smaller cities where workers do not face the same cost of living challenges as those who live in large cities like New York and California.
“Mandating a $15 per hour starting wage across the country fails to recognize the simple economic reality that not all communities are the same,” the NRA stated.
“Restaurant profit margins are razor thin, usually between three and six percent. A dramatic rise in labor costs could force restaurant owners and operators to raise menu prices, cut back on current employees’ hours, and/or eliminate positions,” the NRA stated in a March 5 letter sent to the U.S. House Education and Labor Committee.
McDonald’s said: “We recognize that overall wages reflect the realities of different communities and that elected leaders have the responsibility to set, debate and change mandated minimum wages.”
Over the years, McDonald’s and other high-profile quick-service chains have seen labor advocacy groups such as Fight for $15 protest restaurants as they fight for living wages for fast food workers.
Terrence Wise, a McDonald's worker from Kansas City and leader in the Fight for $15, said “McDonald’s decision to no longer use its power, influence and deep pockets to block minimum wage increases shows the power workers have when we join together.”
“It’s clear that $15 is the minimum any worker, anywhere, needs to get by. It’s time for McDonald’s to join the growing list of companies that pay $15 an hour,” Wise said in a statement.
In the March 26 letter, McDonald’s said the average starting wage in corporate-owned stores is more than $10 per hour.
“And while McDonald’s Corporation does not control the wages franchisees pay in their own restaurants, we believe the average starting wage offered by those independent business owners is likely similar,” the company said.
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