Chris Kempczinski, the CEO of McDonald‘s, recently criticized the U.S. restaurant industry’s uneven wage practices, highlighting that many states permit sit-down restaurants to pay servers as little as $2.13 per hour. The federal subminimum wage for our servers was set in 1991. Industry leaders are starting to speak up about the negative effects it has on increasing poverty rate and creating employee turnover.
Kempczinski highlighted that the current wage model allows lower- and middle-income patrons to be able to afford eating out. He noticed that his customers are eating less often in restaurants. This shift is occurring just as fast food prices are beginning to soar. To say that fast food is expensive is an understatement—the average price of a meal deal has now topped $10 nationwide. This move has led to increased competition among fast food restaurants and old-school sit-down establishments.
McDonald’s has introduced a host of new Extra Value Meals. These family meals include a discounted price on a second entrée, side, and drink. Kempczinski added that these new meals are purpose-built to attract the financial appetites of lower- and middle-income consumers.
“So right now, there’s an uneven playing field. If you are a restaurant that allows tips or has tips as part of your equation, you’re essentially getting the customer to pay for your labor and you’re getting an extra benefit from no taxes on tips,” – Chris Kempczinski
Kempczinski pointed out that some states like California, Nevada and Minnesota have already required restaurants to provide a full minimum wage before tips on servers’ paychecks. Yet, he noted, most other states have no such requirement. He shared a hope that McDonald’s would ultimately go beyond these three states and require changes in all 50 states to fix this disparity.
In addition to this troubling yet unsurprising response, Kempczinski added that McDonald’s would like to see Congress raise the federal minimum wage.
“We just need to do that, I think, across all 50 states. And we’ve said repeatedly, we’re open to conversations on raising the federal minimum wage,” – Chris Kempczinski
McDonald’s is going all out and doing a complete 180. The company has taken the extraordinary step of recently separating from other industry groups due to differences in public policy direction. The company believes that if more companies advocated for fairer wage practices, it would benefit their employees and consumers alike.
The Association, representing all sectors and professions of the restaurant industry, has once again made clear its dedication to responsible growth and job creation throughout the industry.
To counter, McDonald’s is taking the lead and positioning the company at the forefront of the wage reform movement, while better serving the majority of their customers.
