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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."

  • Wages for entry-level jobs will rise to between $11 and $17 an hour and shift manager wages will range between $15 and $20, depending on the restaurant location.
  • McDonald's said it expects the average salary in company-owned restaurants to reach $15 by 2024.
  • The company will also add more benefits for eligible employees, including paid time off, a 401k plan, and free meals.
  • Yes, but: "The pay increases do not affect the 95 percent of the nearly 14,000 restaurants in the United States that are independently owned, only the 650 company-owned restaurants," The New York Times writes.

The big picture: The fast food industry has been struggling to hire new employees. FAT Brands CEO Andy Wiederhorn told Reuters that "most recent stimulus check and unemployment benefits have been a catalyst for people to stay at home" instead of looking for work.

Our thought bubble, via Axios' Felix Salmon: While this policy applies only to McDonald’s-owned restaurants, franchisees will feel a lot of pressure to follow suit. The all-in cost to McDonald’s and restaurant owners is likely to be significantly lower than the amount that wages are increased, thanks to lower turnover.

What they're saying: "The marketplace is forcing stores like Walmart + McDonalds to compete for workers by raising their wages," said Barry Ritholtz, chair and CIO of Ritholtz Wealth Management.

  • "Companies that pay a decent wage CostCo, Trader Joe’s, Target + Starbucks demonstrated you didn’t need to impoverish your staff to be profitable," he added.

Go deeper

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."

2021 economy boomed at fastest rate in 37 years

Source: Bureau of Economic Analysis

The U.S. economy surged ahead with a 6.9% annual growth rate in the final months of 2021 and achieved the strongest growth over an entire calendar year since 1984.

Driving the news: New GDP numbers from the Commerce Department show a remarkable acceleration in economic activity, much faster than the 5.3% growth rate analysts expected.

The Fed isn't the only problem investors are worried about

Illustration: Aïda Amer/Axios

The Federal Reserve will be raising rates, just as the economy is slowing. The markets hate that.

Why it matters: The ugly start to the stock trading year doesn't just reflect Fed-induced agita — investors are also worried about a growth slowdown.