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.)
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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.
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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.
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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.
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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.
McDonald’s Workers Get $20
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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