Earlier this year, low wage workers from two of America’s most notorious bad-actors — Wal-Mart and McDonald’s — were promised pay increases. This was great news for the hundreds of thousands of low-wage workers around the country who expected to see a raise. But, those raises did not come without fine print.
Wal-Mart announced that its starting base pay would increase to $9 an hour, and in 2016 it would go up to $10. While this was a welcome policy change for workers, Wal-Mart stood to benefit, too: Higher wages lead to higher productivity, which leads to fatter wallets for shareholders. But to offset the $1 million expense of raising employees’ wages (and also providing employees with extra training), Wal-Mart actually cut hours, asked employees to leave shifts early, and asked them to take longer lunches.
McDonald’s announced a plan to raise worker pay $1 above the federal minimum wage. As just another piece of the fast food giant’s effort to improve public perception, this turned out to be a major disappointment: The raise only applied to employees of company-owned restaurants. The 90% of McDonald’s employees who work at franchise-owned restaurants around the country (roughly 750,000 workers) will continue to be paid an unlivable wage.
These situations highlight how big companies like Wal-Mart and McDonald’s — companies that many of us financially support — wield their power over workers, and exploit opportunities to improve the lives of their workers in order to keep their bottom lines intact and their public perception favorable. Unfortunately for workers, that still means working for impossibly low pay.
When it comes to implementing workplace policies that would significantly improve workers’ lives — like giving low-wage workers a raise — there are two ways to do so. There’s the big business, PR stunt approach, and then there’s the approach that some smaller companies take. Recognizing the need for a higher starting pay, local grocery chain New Seasons decided to substantially raise theirs, even though it comes at a significant cost to their bottom line. While this bold action may end up with New Seasons getting some good publicity, we’re pleased to see the company taking real action for their workers, with no exploitation, and no loopholes to offset costs.
Unfortunately, when it comes to big business, if it seems too good to be true, it probably is.