Amazon surprised its competition (Walmart, I'm talking about you) when it announced this week that -- beginning November 1st -- it would raise the minimum wage it pays its hourly employees to $15 an hour. According to CNN, this change will affect more than 250,000 current Amazon employees, along with 100,000 seasonal workers. The current federal minimum wage is just $7.25 -- a figure that hasn't increased since 2009.

Last month, Senator Bernie Sanders introduced a bill that would tax large companies such as Amazon, Walmart, American Airlines, Burger King, and others with employees who collect public assistance such as food stamps because their income is so low. The bill, given the name Stop Bad Employers by Zeroing Out Subsidies, aimed to pressure these companies into raising their minimum wages.

After Amazon announced it would raise its minimum wage to $15, Senator Sanders put his sights on another target: McDonald's.

Yesterday, Senator Sanders tweeted a copy of a letter that he sent to McDonald's CEO Steve Esterbrook. The letter read in part:

"Today, McDonald's pays wages that are so low that many of its workers need Food Stamps, Medicaid and public housing to survive. According to one study, U.S. taxpayers are subsidizing the low pay at McDonald's to the tune of $1.2 billion a year. In my view, that is unacceptable.

McDonald's is not a poor company. Last year, it made over $5.1 billion in profits and rewarded wealthy shareholders with over $7.7 billion in dividends and stock buybacks. If McDonald's can afford to give its shareholders $7.7 billion, it can afford to pay all its workers $15 an hour."

For its part, McDonald's issued a quick response to Sanders, pointing out that there is more to compensation than just hourly pay. According to McDonald's:

"Our commitment to the communities we serve includes providing opportunities for restaurant employees to succeed at McDonald's and beyond with world-class training and education programs to help them build the skills needed for today's workforce."

In addition, the fact is that approximately 90 percent of McDonald's are franchises, and the company doesn't control the wages in those restaurants. 

For now, it appears that McDonald's is not going to follow in Amazon's footsteps and adopt its own $15 an hour minimum wage. However, the pressure is on, and it may be increasingly difficult to resist -- especially if some of McDonald's competitors jump on board. According to USA Today, new employees at rival In-N-Out already make $13 an hour, and store managers are said to make up to $160,000 a year without a college degree.

And that's not peanuts.

Published on: Oct 5, 2018
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