McDonald’s raising US workers’ pay in company-owned stores

McDonald’s is raising pay at 650 company-owned stores in the U.S. as part of its push to hire thousands of new workers in a tight labor market.

The fast-food giant is also encouraging its franchisees — which make up 95% of its restaurant base — to boost pay.

McDonald’s is the latest restaurant chain to announce pay raises. Chipotle said Monday it will raise workers’ pay to an average of $15 per hour by the end of June. Darden Restaurants, the owner of Olive Garden and other chains, said it March that it will guarantee workers $12 per hour including tips by 2023.

Amazon, Costco and other big companies have also announced pay raises in recent weeks.

Wages and benefits for U.S. workers have been rising quickly as vaccinations increase and employers try to meet growing demand at restaurants and other businesses. U.S. workers’ total compensation rose 0.9% in the first three months of this year, the largest gain in more than 13 years, according to the Labor Department.

Chicago-based McDonald’s said Thursday its hourly wages will increase an average of 10% over the next few months to $13 per hour, rising to $15 per hour by 2024. Entry-level workers will make at least $11 per hour; shift managers will make at least $15 per hour.

But only around 5% of McDonald’s U.S. stores are owned by the company. The vast majority of McDonald’s nearly 14,000 U.S. stores are owned by franchisees, who set pay in their own restaurants.

McDonald’s said it didn’t have data on wages at franchised restaurants. But the company is asking franchisees to follow its lead.

“We encourage all our owner/operators to make this same commitment to their restaurant teams in ways that make the most sense for their community, their people and their long-term growth,” McDonald’s U.S. President Joe Erlinger wrote in a letter to employees.

In a statement, the U.S. National Franchisee Leadership Alliance —— which negotiates with the company on behalf of franchisees —— expressed support for the wage hikes and encouraged restaurants to stay competitive in their local markets.