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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

California judge: Uber, Lyft not exempt from classifying drivers as employees

Photo: Mel Melcon/Los Angeles Times via Getty Images

A California judge on Friday ruled that a 2020 ballot measure exempting gig companies from providing benefits for its workers is unconstitutional, the Sacramento Bee reports.

Why it matters: California voters approved the measure last November, ensuring gig companies aren't required to make their drivers employees. The victory gave the industry a playbook for facing labor movements nationwide.

Aug 20, 2021 - Axios Twin Cities

Twin Cities employers navigate return to office amid Delta's spread

Illustration: Brendan Lynch/Axios

Companies that push too hard to bring employees back to the office are at risk of losing workers. But so are companies that move to an all-remote model.

Driving the news: Some of the Twin Cities’ biggest employers — Target, U.S. Bank and Wells Fargo — have delayed their September return-to-office plans due to concerns about the Delta variant.

  • Meanwhile, others are still plotting to bring workers back Sept. 7.

The intrigue: How employers handle their return to office is a big factor in how they fare in the so-called “great resignation” that could result in 25% to 40% of employees nationwide quitting their jobs, according to surveys.

  • "I keep hearing from employers that they're sticking to their plan of coming back to the office. And my response to them is, 'Do you realize you're going lose about 10% to 15% of your people?' I don't know what the actual number is, but a certain segment of their employee base doesn’t want that," said Paul DeBettignies, a Twin Cities-based IT recruiter.

State of play: 51% of Minnesota companies are planning to hire for new jobs and another 48% are planning to fill vacant positions, according to a survey by human resources consulting firm Robert Half. In other words, almost every company is looking for workers.

  • "It's a situation where the employees — the talent — are holding a lot of cards that they haven't in prior years," said Kyle O’Keefe, Robert Half's senior regional director for Minnesota.

Between the lines: The 20-something workers are more likely to want to return to the office so they can be seen and advance their careers, DeBettignies said. The mid-career, established professionals are less interested in in-person work.

  • "I hear companies saying, particularly in the tech space, that we're going remote-only. They've got space but employees either don’t need to come in or they come in twice a month," he said. "I try to remind those folks they're probably going to lose 5% to 10% of their people. Because not everybody wants to work for a remote-only company."

The bottom line: Robert Half surveyed employees nationally in April and found that 34% currently working from home due to the pandemic would look for a new job if they were required to be in the office five days a week.

  • "The organizations that remain nimble and flexible will be able to retain, attract and engage their workforce," O'Keefe said. "I would hesitate on bringing some sort of one-size-fits-all approach."

More CEOs get paid to do better

Illustration: Shoshana Gordon/Axios

A rush of companies say they are putting their money where their mouth is. From McDonald's to Wells Fargo, a record number of big businesses say how they fare on a slew of goals — like diversity — will impact part of CEO pay.

Why it matters: It's kicked into high gear in the past year, as companies try to signal they are serious about their role in improving society.