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McDonald’s (MCD: NYSE) is joining Target (TGT: NYSE) and other companies with raising its payroll to its employees. The fast food giant will pay its restaurant workers more than ten percent above current salaries. This comes on the heels of other US corporations facing pressure to raise minimum wages.
The wage increase will go into effect in July and applies to 90,000 workers in the corporate-owned restaurants. However, franchise owned branches will not be effected. Those restaurants, some 90 percent of the 14,350 McDonald’s set their own wages.
In an interview with the Wall Street Journal, McDonald’s CEO Steve Easterbrook said “we are acting with a renewed sense of energy” towards their business. Easterbrook took the helm of the struggling corporation in March 2015.
McDonald’s is not alone with raising wages. Walmart (WMT: NYSE), Target and Gap have already hiked wages after caving into tremendous pressure from interest groups to do so.
After the announcement MCD shares lost two percent and eventually closed a little over one percent lower on the day.
What does this mean for employees of the fast food chain?
They will get at least a one dollar per hour wage increase over the minimum wage in corporate owned branches. The average hourly rate will move to $10 per hour. They will also allow employees to start to accumulate paid leave starting in July. The company also announced they will expand high school completion and college tuition plans for all US based employees.
McDonald’s has seen its fair share of changes over the last few months. They are combatting sluggish sales as corporate global profit has fallen one percent in 2014. Since Easterbrook has taken the helm, shares of MCD have risen three percent in 2015.
