Companies and Brands

McDonald's Workers Get $20

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The federal minimum wage has been $7.25 since 2009. Some states have a rate well over $14 an hour, but others use the federal figure as their number. California has just passed a law raising that to $20 for fast-food workers. It will start in April of next year. (These 15 cities are increasing the minimum wage.)
Not everyone who works at a fast-food establishment will get the new deal. According to CNN, “Employees who work at fast food restaurants with at least 60 locations nationwide are eligible.” That means big chains, led by McDonald’s and Starbucks, which have hundreds of thousands of workers in the United States.

The decision will fuel a fire that has gone on for years. Employees want a wage that lifts them out of poverty. There are still fast-food workers who live partially on food stamps. Large fast-food companies say the increases will damage their profit margins. In turn, this will undermine stock prices. The California decision will not do that, but if the raise spreads nationwide, McDonald’s could spend hundreds of millions of dollars on employee compensation.

The wage debate has increased friction between fast-food companies and their workers. Starbucks store workers have unionized in a few locations. Starbucks has done its best to push them out. The battle has reached the point where both sides have gone to court. Starbucks’s former CEO, Howard Schultz, was dragged before a Senate committee.

The minimum wage battle will likely continue for decades as a tug-of-war between profits and poverty. The California decision is a modest win for workers who barely make enough to live on.

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