McDonald’s, Minimum Wage and the March Jobs Report

The Bureau of Labor Statistics released the March jobs report this morning, revealing a slowdown in hiring much larger than anticipated. Only 126,000 jobs were added — about half of what economists were predicted.

The good news is hourly earnings rose slightly, beating expectations. That indicates the labor market is tightening — to attract employees, businesses have to pay more. Today, Miriam Sitz started her morning at a restaurant in Harlem to see how jobs report numbers play out in real life. She went to McDonald’s on 125th and Broadway.


Lidia Dominga Cabrera is 19. She works under the Golden Arches, training employees and working her way up in the restaurant’s management.

 

CABRERA: I’m the crew training right now but I’m practice for being a manager.

And there are people for her to train — the restaurant is hiring. Now she works about 40 hours a week

 

CABRERA: I’m like full time right now, 40 hours a week

Making just about minimum wage.

 

CABRERA: Like 8.75, 9…

McDonald’s announced on Wednesday that this summer, it would raise its starting wage to $1 above the federal minimum. I asked Cabrera what an extra $40 a month would do for her.

 

CABRERA: Oh wow that would help me a lot, right now my mom is not working and I’m the one who’s doing everything.

 

An extra $40 would make a real difference to the young woman, who financially supports her mother. But there’s a catch. The McDonald’s wage increase only applies 10 percent of stores — not ones owned by franchisees, like the location where Cabrera works.

 

Still, according to information from the Bureau of Labor Statistics, workers in the fast-food and hospitality industries are seeing wage increases more quickly than the rest of the labor market.

 

Martin Kohli is the chief regional economist in the New York-area for the Bureau of Labor Statistics.

KOHLI: The average wage for the in the industry was $14.23 in March and that’s actually up about 3.6 percent over the year…

 

That looks pretty good compared to average wage growth of 2.1 percent.

 

KOHLI: but it’s still an industry that pays well below the average which was $24.86 an hour.

 

And despite the fact that the 125 St McDonald’s hiring, many others aren’t.

 

KOHLI: The most important thing for people to understand is that the pace of hiring slowed in a number of different industries.

 

And one of those industries where the pace of hiring slowed? Restaurants.

 

KOHLI: Employment in food services which had been growing about 33,000 a month actually increased only about 9,000 a month in March, so that’s a significant slowdown.

Now, the jobs report doesn’t specifically address minimum wage jobs, but…

 

KOHLI: It does talk about industries in which you find a lot of minimum wage workers like food services and it’s telling you that there are some wage increases going on but it’s also indicating that across all industries wage increases continue to be historically low and small.

While only a small number of McDonald’s employees can expect to see the July 1st pay increase, all minimum workers in New York can at least count on a state mandated raise at the end of this year: A whole 25 cents.

 

Miriam Sitz, Columbia Radio News.

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