In the wake of Walmart’s recent wage hike and implementation of employee education programs, McDonald’s just announced its intention to boost worker pay and offer paid vacation. The company plans to raise employee compensation to at least $1 above the state or municipal minimum wage on July 1.
This move will only affect companies owned and operated by McDonald’s Corp. and not its franchises. Regardless, these moves by some of the nations’ staple pay squeezers certainly seem to reflect tighter slack within the labor markets. Turnover costs – with hiring and retraining workers – are outpacing the cost of raising the wage rate. This proves especially relevant in high turnover industries like retail and dining. McDonald’s also plans to offer workers who complete at least 20 hours a week 20 hours of paid time off a year, a seemingly trivial figure, but nonetheless a key move to reduce turnover.