The federal minimum wage of $7.

25 an hour hasnt increased since 2009, although 29 states

have set minimums above the federal level, as have cities such as San Francisco, which requires
pay of at least $11.05 an hour. Efforts in Congress to increase the pay floor stalled last year. But a
growing number of large employers raising wages could set a de facto minimum wage that is
higher than the federal floor, said University of Michigan economist Donald Grimes.
McDonalds announcement didnt satisfy its strongest critics, who have been calling for much
larger increases and demanding the company take responsibility for pay and other policies at its
franchisees. They say theyre raising wages, but this is nothing near a living wageits just
smoke and mirrors, said Bleu Rainer, a 26-year-old who said he works at a franchise-run store
in Tampa, Fla.

Motivated teams deliver better customer service and delivering better customer service in our restaurants is clearly going to be a vital part of our
turnaround.
McDonalds CEO Steve Easterbrook

Fast Food Forward, a group backed by the Service Employees International Union, has helped
organize nationwide protests at McDonalds and other chains demanding a $15 hourly minimum
and the right to form a union without employer backlash. The next round of protests is scheduled
for April 15, according to organizers. They think this will make us back down, but theyre
wrong, Mr. Rainer said.
In addition to the wage increase, McDonalds said it will enable workers after a year of
employment to accrue up to five days of paid time-off annually.
The company also plans to make subsidies for some education costs available to all 750,000 U.S.
workers, including at franchisees.
Even though it doesnt apply to franchised restaurants, the pay raise also could upset franchisees,
many of whom feel pressure to match McDonalds in order to remain competitive, said
franchisee consultant Richard Adams of Franchise Equity Group. That would mean the
franchisee will have to raise prices, which may or may not cover the increased labor costs, he
said.

McDonalds sets many requirements for franchisees, but not worker wages. It is currently
fighting complaints by the National Labor Relations Boards general counsel that claim
McDonalds has sufficient control over franchisees operations to make it a joint employer
responsible for the rights of franchise employees.