McDonald’s CEO Don Thompson made an unprecedented move by speaking in favor of legislation that would raise the federal minimum wage.
Thompson, who became the fast food franchise’s first Black CEO, said the company would support a bill, proposed by President Barack Obama, that would increase the country’s current $7.25 minimum wage to $10.10.
"You know, our franchisees look at me when I say this and they start to worry: 'Don, don't you say it. Don't you say we support $10.10,'" Thompson reportedly said during talk at Northwestern University's Kellogg School of Management. "I will tell you we will support legislation that moves forward."
The national push to raise the minimum wage to reflect inflation for low-wage workers has been met with much resistance from Republicans and corporations. Companies like McDonald’s and Wal-Mart, in particular, have taken heat for not raising the minimum wage for their employees. This year, McDonald’s workers from California, Michigan and New York filed class-action lawsuits alleging that the company forced them to work off the clock, took time off their time cards and did not pay them overtime.
Thompson, who made $9.5 million last year, has been on the defensive about worker pay since at least last year, when the media discovered McDonald's had a financial-advice website for its employees - which is no longer available - recommending they get second jobs and not turn on their heat.
The Huffington Post reports:
Thompson has insisted that his company pays more than minimum wage. And various estimates put the median McDonald's worker's wage at between $8 and $9 an hour.
But even at $9 an hour, which amounts to about $19,000 per year, the typical McDonald's worker would have to work two months just to make what Thompson makes in one hour (about $3,200, assuming he works 60 hours per week and 50 weeks per year).
This is Ground Zero of the income inequality debate. Soaring CEO pay plus stagnant wages -- the federal minimum wage should really be $22 an hour, adjusting for productivity gains and inflation -- in an economy creating mainly low-paying jobs, equals rising inequality. Those on the conservative side of the debate complain that raising the minimum wage will cause companies to lay off workers and/or jack up prices, hurting the economy. Thompson shot holes in that argument, at least as it concerns a raise to $10.10 an hour.
Thompson says he’s not concerned for the company should legislation pass to increase the minimum wage to $10.10.
"McDonald's will be fine," he reportedly told Northwestern. "We'll manage through whatever the additional cost implications are."
In April, a bill for a minimum wage hike was killed in the Senate after failing to get
enough votes. However, even if the bill is able to advance, it is unlikely to pass in the Republican-controlled House of Representatives.
(Photos from left: Daniel Acker/Bloomberg via Getty Images, McDonalds)