Entry Level Wages Rise Amid Labor Shortages
Amazon and McDonald’s Boost Hourly Pay
Amazon (AMZN) and McDonald’s (MCD) are among the major companies gearing up to hire thousands of entry-level workers as the economy reopens. Businesses are facing labor shortages and in response they are raising salaries, offering bonuses, and adding other perks to attract hourly workers.
According to the Labor Department, in April, the average hourly wage for private-sector employees increased $0.21 to $30.17. This is notable given that strong hiring trends in the restaurant and hospitality industries typically lower average earnings.
Companies in Hiring Mode
Amazon is in the process of hiring 75,000 employees and is paying $1,000 sign-on bonuses in some areas of the country. The ecommerce giant has been hiring throughout the pandemic to meet unprecedented demand. The average hourly wage for its open roles is $17 per hour, which is up from $15. Meanwhile, McDonald’s is hiring 10,000 workers at its company-owned stores. The restaurant chain plans to increase hourly pay by 10% over the upcoming months.
Other fast-food chains planning to hire tens of thousands of employees include Chipotle Mexican Grill (CMG), Applebee’s (DIN), and KFC (YUM). Chipotle is increasing the average hourly wage to $15 at all its restaurants.
Consumers Could See Restaurant Price Increases
The National Owners Association, a trade group which represents franchisees in the US, is encouraging its members to raise prices for consumers, arguing that sales are booming as consumers venture out again. Chipotle is one of the restaurants to take the advice to heart, recently raising prices on delivery orders.
Restaurants have experienced a volatile and challenging market during the pandemic. As consumers return to pre-pandemic habits, restaurants are rushing to meet their needs with larger labor forces.
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