Fast-food giant McDonald’s is dramatically expanding education aid for workers by investing $150 million in support that could reach hundreds of thousands of employees, the latest twist in the debate over equity in lower-wage jobs and how to alleviate poverty in the U.S.
The new tuition aid could help restaurant workers attend a four-year university, community college or trade school and also tap other education support, according to McDonald’s. Family members will also be able to use some education benefits, as part of the investment that will be made over five years.
Benefits and pay among fast-food workers, who too often struggle with fewer benefits and more unreliable schedules than higher-paid workers, is a pressing issue for lower-income families and advocates who support a living wage.
Some fast-food industry leaders have already set a higher bar for benefits. At Starbucks, for example, eligible workers can qualify for health care coverage, adoption assistance, 401(k) matches, and other benefits. Seattle’s famous burger joint Dick’s, meanwhile, starts its restaurant workers at $14 an hour ($16 within the city of Seattle limits), while also offering “100 percent employer-paid health insurance,” help with child care for qualified employees and other benefits.
While laudable, McDonald’s new education benefit is also no replacement for a living wage, said David Cooper, senior economic analyst at the progressive Economic Policy Institute in Washington, D.C. The tuition benefit also likely costs less than raising wages and helps fewer workers, he added.
3 Takeaways on Tuition Aid
- Under McDonald’s tuition plan, crew members could receive up to $2,500 per year (up from $700) and managers could get up to $3,000 per year (an increase from $1,050).
- The investment means nearly 400,000 McDonald’s restaurant workers could use the education benefit.
- The tuition program starts on May 1, but it’s retroactive to Jan. 1, 2018.
— McDonald’s Corp.
“It doesn’t have the same (type) of impact that simply paying higher wages would have,” Cooper said.
Another advocacy organization questioned how some workers could even take advantage of the aid.
“When corporations offering programs like this don’t pay people a living wage, how are the people who work for them supposed to use their time off work to go to college classes when they aren’t earning enough to make basic ends meet?” Adam Shah, a senior policy analyst at Jobs With Justice, a workers’ rights and advocacy group, said in a statement.
The iconic burger company said the new benefits are an investment in its workers that can help them move ahead in their careers, whether at McDonald’s or somewhere else. The company added that it’s lowering the employee eligibility requirement for the tuition assistance to 15 hours so a worker can attend college classes. The company cited the 2017 federal tax law and a more competitive job market as reasons why the tuition program is expanding.
“By tripling tuition assistance, adding education benefits for family members and lowering eligibility requirements to the equivalent of a summer job, we are sending a signal that if you come work at your local McDonald’s, we’ll invest in your future,” McDonald’s Chief People Officer, David Fairhurst, said in a media release.
Even as McDonald’s unveils its new tuition aid, the company is also coming under fire over accusations that it is not committed to a living wage, CBS News reported.
“McDonald’s workers in a half dozen cities took to the streets today to protest McDonald’s corporation after it was revealed that the company has not kept up its promise to pay workers more than $1 over the local minimum wage,” Fight for $15, a grassroots advocacy organization that is helping lead the effort for better pay and benefits among lower wage workers, said in an April 3 statement.
McDonald’s maintained it’s honoring the commitment.
“The increase announced in 2015 was applicable to the local wages on July 1, 2015, and was not a policy thereafter,” McDonald’s spokesperson Terri Hickey wrote in an email reported by CBS News.
In recent years, McDonald’s and other fast-food restaurants have faced employee-led demonstrations, often held simultaneously in dozens of U.S. cities. Workers and advocates for a higher living wage also held protests at McDonald’s corporate headquarters in Oak Brook, Illinois.
Amid these protests and a growing U.S. economy, some retailers, including Walmart, have raised their wages.
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