Friday, March 20, 2015

McDonald's to Raise Wages?

            In the past couple weeks, there have been rumors that McDonald’s will soon raise the wages of its employees. Although employees and other advocates of higher pay have recently been protesting for the company to raise the average pay, this is nothing new. McDonald’s has always dealt with employees angry about their salaries by doing nothing, however, I do believe that McDonald’s will raise the wages of its employees very soon.
            Now, it’s difficult to say how much salaries could be raised by or even for how many of the company’s employees. Over 90 percent of McDonald’s stores are franchises, which means that those stores may not be subject to the same wage changes as the 10 percent of stores that are directly owned by McDonald’s. But regardless of whether the franchise stores are subject to the same wage changes, in order to retain their employees, the stores will most likely need to raise their wages as well.
            The graph above shows the United States unemployment rate from 2008 to approaching present day. Since 2010, the unemployment rate has steadily decreased and is now below 6 percent.
            As unemployment rate drops, the rate of employees quitting in retail stores increases. The graph above shows exactly how quitting rates in retail stores is inversely proportional to the unemployment rates. Between 2008 and 2010 when the economy was at its worst, employees could not afford to quit working at their retail jobs such as McDonald's because there were no other jobs available. But now since the economy is in a much better position, employees are able to quit their current jobs for jobs that offer better pay.
            Therefore, I believe that McDonald's will raise its wages in fear of losing employees to jobs that offer higher pay. What do you think?

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