McDonald's Raises Corporate Restaurant Wages As Franchisee Worker Strike Looms

Burger giant McDonald's (MCD) announced Thursday that it was raising the hourly wages for workers at its corporate-owned restaurants to an average of $13 an hour, with expectations to increase that rate to $15 an hour by 2024.

The wage increase affects more than 36,500 employees and represents a 10% increase for McDonald's employees. It is expected to be phased in over the next several months, the burger chain said in a blog post.

The pay hike will include a minimum of $11 per hour for entry-level workers and $15 per hour for shift managers, according to the chain.

"Our first value is taking care of our people, and today we are rewarding our hardworking employees in McDonald-owned restaurants for serving our communities," said Joe Erlinger, president at McDonald's USA. "These actions further our commitment to offering one of the leading pay and benefits packages in the industry."

But only about 5% of McDonald's stores in the U.S. are corporate-owned, with the majority operated by franchisees, which dictate the pay rate at their locations, the Associated Press reported.

Erlinger said in a letter to employees obtained by the AP, "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."

The news of the wage increase comes as McDonald's franchisee workers in more than 15 cities across the U.S. have threatened to strike on May 19, as they demand a wage of at least $15 an hour.

The federal minimum wage is $7.25 per hour.

The strike is slated for a day before the McDonald's shareholders' meeting.

The strike, which is being supported by advocacy group Fight for $15, is planned for cities such as Los Angeles, Chicago, Houston, and Detroit, as well as Raleigh-Durham, North Carolina, and Flint, Michigan, as well as many others.

In its blog post, McDonald's said that it plans to hire 10,000 more workers amid a tight labor market. The chain has struggled to find workers to fill positions as demand at its restaurant grows during the pandemic.

In addition to the pay increase, McDonald's has also beefed up its benefits package at company-owned restaurants – another demand that franchisee workers have called for. Its benefits include paid time off to recharge, counseling services, education assistance, 401(k) plan with 100% match up to 6%, cash incentives, corporate discounts, and free meals.

Shares of McDonald's were trading at $230.30 as of Thursday at 11:54 a.m. ET, up $2.36, or 1.04%.