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Illustration: Brendan Lynch/Axios

More hourly workers are getting a pay bump. Thank the new war for employees.

Why it matters: To meet the demand that's only expected to get more ferocious as reopening continues, companies are having to bid up to attract workers.

Driving the news:

  • McDonald's today said it will raise hourly wages — entry-level workers will be eligible for as much as $17 per hour — at corporate-owned restaurants.
  • Amazon says it will pay $17 per hour on average for 75,000 new workers it wants to hire, $2 more than its usual starting wage.
  • Chipotle restaurant workers will make an average of $15 per hour by the end of June, it said earlier this week.
  • Wendy's said it's bracing for higher labor costs during its earnings call.

The backdrop: Although millions are unemployed, businesses — especially restaurants — say workers are hard to come by.

  • Pandemic-era factors — lack of child care, fear of contracting the virus and more generous unemployment benefits — have been cited as the reason.
  • Food-service workers during the pandemic have amplified an ongoing call for better working conditions, ABC News reports.

The companies hope the pay hikes — or generous benefits or bonuses — help lure scores of new workers (and keep the ones they have) in preparation for a busy summer.

  • What to watch: The McDonald's wage hike won't affect the franchisees, who own 95% of its U.S. restaurants, but they'll likely feel pressure to follow suit, Axios' Felix Salmon notes.

The other side: "A lot of companies are wary of offering permanent measures like wage raises" and are opting for one-time incentives instead, James Knightley, ING's chief international economist, tells Axios.

  • The reason: A possibility that when pandemic quirks ease, there will be "a glut of labor," Knightley says.

Go deeper

McDonald's raising hourly wages at company-owned restaurants

Photo: Ben Hasty/MediaNews Group/Reading Eagle via Getty Images

McDonald's on Thursday announced it will be increasing hourly wages for current employees at company-owned restaurants, with entry-level staff eligible to earn up to $17.

Why it matters: The company said it hopes the move will attract new applicants as it looks to hire 10,000 new employees ahead of the "busy summer season."

Updated May 13, 2021 - Economy & Business

The states ending federal pandemic unemployment benefits early

Protesters demand senators support the continuation of unemployment benefits on July 16, 2020 in Miami Springs, Florida. Photo: Joe Raedle/Getty Images

More than a dozen Republican-led states have announced they are terminating their involvement in federal pandemic-related unemployment programs early.

Driving the news: Many of the states' governors cited worker shortages. But some experts say it's the job climate, including pandemic-era factors, and not unemployment benefits that is determining when and how people return to work.

Optimism rises among small business owners even as many struggle to hire

Expand chart
Data: NFIB; Chart: Axios Visuals

Small business owners' optimism improved during April, even as many struggled to fill open positions.

Why it matters: Small businesses were hit hard with closures at the beginning of the pandemic, and an uneven recovery has proved that business owners still face a mountain of uncertainty.