“In an overworked society, fast food has become the national kitchen. On any given day, fast food feeds more than a third of the country. When working people are, almost by definition, short on time, quick access to cheap calories constitutes, in effect, a pay raise.
“During the Great Recession, as many cut back on full-service dining, fast-food consumption increased especially among working single parents. Today, fast-food sales are steadily rising, even as the pandemic has crumpled the restaurant industry at large.
“By the end of 2020, tens of thousands of restaurants in the U.S. had permanently closed, but McDonald’s boasted of its sixth consecutive year of sales growth.
“Yet fast-food workers – two-thirds of whom are women, and nearly half of whom are people of color – struggle to get by. A study by the University of California, Berkeley, from 2015, found that more than half of the 3.7 million people who work in fast food rely on public benefits to survive. Today McDonald’s is one of the five biggest employers whose full-time employees survive on food stamps and Medicaid programs.”
(Eleni Schirmer. “The Fight for Fifteen at an Orlando McDonald’s. The New Yorker. February 15, 2021.)
A handful of major restaurant chains across the nation have recently announced that they are raising wages in a bid to attract workers as they finally begin to reopen at full capacity.
As the coronavirus pandemic eases and patrons -- fueled by pent-up demand and stay-at-home fatigue -- flock to eat out, some workers and advocates see this apparent labor shortage as an opportunity to call for industry-wide wage reform.
"It's time for everyone, every worker in the U.S., to be heard," Carlos De Leon, 40, who has worked at a Chicago-area McDonal's franchise for 10 years but still does not earn $15 an hour, told ABC News through a Spanish translator.
(Catherine Thorbecke. “As restaurants raise wages, workers see moment for industry-wide change.” ABC News. May 19, 2021.)
De Leon, a single father of three, said he is participating in a strike on Wednesday organized by the Fight for $15 advocacy group to demand higher wages.
"We know that McDonald's earns a lot of money, they made a lot of money during the pandemic, and they haven't really offered it to any of us workers who are with risking our health working during a pandemic," he said. "We're fighting for our kids. As parents, we need better wages to give them better lives."
The federal minimum wage has remained unchanged for over a decade at $7.25 an hour. Recent demand for staff, meanwhile, has pushed the average hourly wage of workers at food and drinking establishments to $16.28 an hour in March, the highest on record, according to preliminary data from the Labor Department.
Some food businesses, and especially large chains, are actually committing to wage increases without a federal mandate– for example, White Castle has started a pilot program of $15 per hour and Chipotle promises a $15 average hourly wage by end of June.
And, although it's true that last week, McDonald's announced it will be raising hourly wages for workers at McDonald's-owned restaurants by an average of 10% (The company said these wage increases will bring the pay range for entry level crew to between $11 and $17 an hour), the McDonald's pay increase announcement does not apply to its franchises, which comprise a majority of its restaurants – including the one where De Leon works. This is in part why he is demonstrating Wednesday to demand the same at his restaurant.
"It's not fair," De Leon told ABC News. "That should be for all of us, because all of us wear an 'M' on our uniform."
How does the McDonald's model work. Allow me to explain …
McDonald's makes money by leveraging its product, fast food, to franchisees who have to lease properties, often at large markups, that are owned by McDonald's. As a franchisor, McDonald’s primary business is to sell the right to operate its brand. It gets its money from royalties and rent, which are paid as a percentage of sales. While the company certainly wants to sell more burgers, fries and breakfast sandwiches, they are just a means to an end. It’s the franchisees that employ workers and sell burgers.
(Akhilesh Ganti. “How McDonald's Makes Money.” Investopedia. November 10, 2019.)
The company operates fewer of its own restaurants. McDonald’s over the past several years has sold more of its restaurants to franchisees, and now operates less than 5% of its 14,000 domestic locations. That’s a common strategy at many restaurant chains, but it at least gives off the perception that the company doesn’t understand the dynamics of operations like it once did.
(Jonathan Maze. Explaining McDonald's Franchise Dispute, and Why It's Important.” Restaurant Business. January 14, 2019.)
All told, a full 82% of McDonald's restaurants are owned by franchisees, not the company itself. That may sound like a lot, but it's actually a smaller percentage than McDonald's would prefer. The company's goal is to have 95% of its restaurants owned and operated by franchisees, leaving only 5% for the company to run.
(John Maxfield. “What Percentage of McDonald's Restaurants Are Owned by Franchisees?” The Motley Fool. Premium advisory service. October 08, 2018.)
Interesting, isn't it? McDonald vet Carlos De Leon certainly has a point. So, at last, pressure is increasing on competitors to raise wages in order to attract workers. Smaller chains and mom-and-pop restaurants are feeling the heat too.
McDonald's didn't specifically respond to a question about raising wages for franchises workers. In a statement to ABC News, noting the hourly-wage increase at McDonald's-owned restaurants, the company said …
"McDonald’s is lucky to have the hardest working and most dedicated restaurant crew in the industry, who have tirelessly served our communities during this challenging year,"
McDonald's did share this from Mark Salebra, the chair of the U.S. National Franchisee Leadership Alliance, stated: "In order to drive growth in a challenging hiring market and best serve our customers, it is imperative that we attract and retain exceptional talent in our restaurants, and we proudly offer a variety of unique employee programs and benefits locally as franchisees."
(Catherine Thorbecke. “As restaurants raise wages, workers see moment for industry-wide change.” ABC News. May 19, 2021.)
McDonald's Case Study
Princeton researchers Orley Ashenfelter and Štepán Jurajda studied McDonald’s restaurants in 90% of U.S. counties over five years ending in 2020 to see how those in cities or states that raised their minimum wage responded to the change.
McDonald’s is a good case study because the company has restaurants in nearly every U.S. county and a large share of its workers are affected by minimum wage increases. McDonald’s wages rose substantially in communities with a minimum wage increase.
Wages in about 40% of restaurants were very near the minimum wage both before and after the increase. About the same share raised their wages more than was required by the new legal minimum, showing two things:
First, they could afford higher wages.
Second, they were willing to pay a premium for dedicated workers – but the premium was relative to the going wage rate and therefore rose with an increase in the minimum wage.
The researchers found no effects of minimum wages on existing McDonald’s restaurants closing, or new ones opening; and no relationship between wage policy and McDonald’s adoption of automated ordering machines. Big Mac prices rose by about 14 cents per dollar of increase in the minimum wage. If that rate holds for Ohio, we would expect a $15 wage proposal to lift the price of a Big Mac by 58 cents in 2019 dollars.
Responding to the study, McDonald’s president and CEO Chris Kempczinski told reporters that — as long as it’s applied across the board for all employers — “McDonald’s will do just fine” with a $15 minimum wage.
(Orley Ashenfelter and Štepán Jurajda, “Wages, Minimum Wages, and Price Pass-Through: The Case of McDonald’s Restaurants.” Princeton University and CERGE-EI. January 2021.)
(Elisabeth Buchwald, “What minimum-wage increases did to McDonald’s restaurants – and their employees.” Market Watch. January 30, 2021.)
Isn't It About Time?
What is the minimum wage in Ohio?
The current 2021 minimum wage in Ohio is $8.80 per hour for nontipped employees and $4.40 per hour for tipped employees. According to the Ohio Department of Commerce's Bureau of Labor and Worker Safety, all servers are entitled to overtime pay in the amount of 1 1/2 times their normal hourly wage for hours more than 40 worked in a single week.
According to the U.S. Department of Labor, federal law requires employers to pay non-tipped employees at least $7.25 per hour. Ohio provides a substantially higher minimum wage for tipped employees, as federal guidelines require a minimum hourly wage of only $2.13. Tipped employees must earn at least $7.25 per hour in combined wages and tips. If not, the employer must make up the difference.
How much does a Fast Food Worker make in Ohio?
Salary.com reports the average fast food worker salary in Ohio is $22,143 as of April 27, 2021, but the range typically falls between $20,026 and $25,585. Salary ranges can vary widely depending on the city and many other important factors, including education, certifications, additional skills, the number of years you have spent in your profession.
What does McDonald's pay?
Payscale.com reports McDonald's Corporation pays its employees an average of $10.43 an hour. Hourly pay at McDonald's Corporation ranges from an average of $8.11 to $15.70 an hour. McDonald's Corporation employees with the job title Restaurant Assistant Manager make the most with an average hourly rate of $13.04, while employees with the title Ronald McDonald House Manager make the least with an average hourly rate of $8.91
What Does McDonald's pay in Ohio?
ZipRecruiter reports as of May 12, 2021, the average annual pay for a Mcdonalds crew in Ohio is $26,012 an year.
Indeed reports a crew member at McDonald's in Ohio makes just $8.93 per hour, 23% below the national average.(The salary is estimated from 446 employees, users, and past and present job advertisements on Indeed in the past 36 months.Last updated: May 6, 2021.)
What Does McDonald's pay in Portsmouth, Ohio?
In Portsmouth, the average fast food worker salary is 20,705 (Updated April 27, 2021).
The Future
Ohio’s minimum wage is too low to cover the basic cost of living, and does not reflect the value of work being done by Ohioans in low-paying jobs. In the 40 years from 1979 to 2019, median wages grew 3.9% while 10th percentile wages grew 1.6%. Since its peak, the minimum wage has lost more than a quarter of its value.
Everyone deserves the chance to lead a healthy life; those who work deserve a wage that dignifies their contribution and covers the basics. Low wages have serious consequences for all Ohioans. Living in poverty creates chronic stress that shortens the lifespan of those who cope with it.
Raising Ohio's minimum wage to $15-per-hour by 2026 will benefit 1.56 million working Ohioans (29% of the Ohio workforce), improve fairness in pay; and buoy the economy by directing $4.9 billion per year to the workers who most need to spend it. People who stand to benefit most include many working in frontline industries, including retail (20.3% of all affected workers), restaurants (19%) and healthcare (16.3%).
Ending separate treatment for tipped workers is a critical part of the policy solution, and would generate another $1.2 billion.
Consider these other benefits to raising Ohio's minimum wage:
* The average affected
worker will take home an additional $3,898 each year with both
policies ($3,125 from the raise and $773 from tip credit
elimination).
* Three in five of the people whose pay will go
up are women. Raising the wage will reduce pay inequality by
gender.
* The raise will help overcome racial inequality in
pay: While 70.5% of those who benefit are white, a larger share of
Black (44.2%) and Hispanic (45.3%) workers are paid low wages
compared with white workers (25.7%).
* Most affected workers
are adults aged 20+ (83.0%) who finished high school (84.4%).
According to Michael Shields, a researcher at the non-profit Policy Matters Ohio, restaurant waiters and waitresses were paid a median wage of $9.59 per hour in 2019, including tips. That's 93% of the poverty level for a family of three. His research also shows the positive impact increased minimum wages could have on the lives of restaurant industry workers.
Today, someone paid the minimum wage can buy 28% less than they could have in 1968. By 2019, 13.1% of Ohioans and 18.0% of Ohio children lived in poverty, before COVID-19 certainly made those numbers far worse. It is evident raising wages in restaurant chains will benefit all. People expect service workers to excel: these workers deserve a decent wage and deep appreciation for the hard work they do.
“A few days after Mother’s Day in 2019, a McDonald’s in Orlando, Florida, found itself out of scrambled eggs and receipt paper, wiped clean from the holiday rush. Fortunately, a store on the other side of town was well stocked, and the general manager asked a shift manager to pick up the supplies. The shift manager declined, and so, when the general manager asked, did a second and third. But a fourth shift manager, Cristian Cardona, sighed and agreed to the errand, believing, wrongly, that he was obliged to perform such requests.
“While Cardona was driving back to his store, a truck drove into the passenger side of his car. He was not seriously injured, but his car was totaled. Cardona returned to work, handed off the cartons of scrambled eggs, loaded the receipt paper into the register, and finished his shift.
“That night, he filed an incident report, intending it as a request for compensation for the cost of his car. Months passed without any action from his employer. So Cardona took out a loan of fifteen thousand dollars and bought a new car. 'Now I can’t leave McDonald’s,' he told me, during one of our first conversations, 'because if I leave, I won’t have much to pay the debt I got into because of them.' (Cardona said that, about a year later, McDonald’s compensated him.) …
“Cardona, who is twenty-one, has been working at McDonald’s since 2017. He currently makes eleven dollars and thirty cents per hour. He lives with his parents and younger sister, in Orlando …
“The family moved to Orlando from Colombia when Cardona was nine, to escape violence and gang activity. 'We came here for the same reason a lot of people come here,' he told me. 'Seeking something better.'
“But the American Dream hardly brought reprieve. Cardona wanted to attend college, but he couldn’t afford tuition, so he started working at McDonald’s after graduating high school.
“Today, many of his friends in Orlando stay in homeless camps and are food-insecure. 'We have more houses than we have homeless people, but somehow we can’t give them homes,' Cardona said. 'It just doesn’t have to be like that.' A patient kind of anger, well aimed but warm, uncoils in him when he talks about his observations of injustice.”
(Eleni Schirmer. “The Fight for Fifteen at an Orlando McDonald’s. The New Yorker. February 15, 2021.)
Please read Schirmer's entire New Yorker article by clicking here: https://www.newyorker.com/news/us-journal/the-fight-for-fifteen-at-an-orlando-mcdonalds
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