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McDonald’s to stop lobbying against minimum wage increases

The company told the National Restaurant Association of its intention to no longer support any push against mandated pay hikes.
Photograph by Jonathan Maze

McDonald’s Corp. will stop lobbying Congress against increases in the minimum wage, a major shift in strategy for the burger giant long considered synonymous with low pay and benefits.

The company told the National Restaurant Association in a letter Tuesday that it would no longer participate in anti-wage-hike lobbying efforts. Politico first reported about the letter Tuesday.

Multiple sources confirmed the report to Restaurant Business.

“Going forward, McDonald’s Corporation will not use our resources, including our lobbyists or staff, to oppose minimum wage increases at the federal, state or local levels, nor will we participate in association advocacy efforts designed expressly to defeat wage increases,” Genna Gent, vice president, U.S. Government Relations at McDonald’s, wrote in the letter to the association.

“We do have a perspective on elements of this discussion. We believe increases should be phased in and that all industries should be treated the same way.”

The move is the latest signal from McDonald’s that it is intent on improving its image among the public and its customers.

The company, the world’s largest restaurant chain, has been a frequent target of protests and complaints from labor groups pushing for a $15 minimum wage.

But it has also raised wages at its company-owned locations, and pay at many McDonald’s restaurants is frequently above local minimum wages as low unemployment makes labor unavailable.

McDonald’s average wage at company restaurants is above $10 an hour, sources said, and operators in many locations pay more than that to lure workers.

McDonald’s was also subject to a lawsuit by the National Labor Relations Board under the Obama administration, which argued that the company was “joint employer” of workers employed by its franchisees—and therefore liable for any labor violations the operators commit.

McDonald’s decision to stop lobbying against the minimum wage could be seen as a blow to the Association, which loses the voice of a key member, and certainly the largest, in an issue central to many restaurant companies.

“The National Restaurant Association is the largest foodservice trade association in the world, representing every aspect of the industry,” Mollie O’Dell, vice president communications and media relations at the National Restaurant Association, said in an emailed statement late Tuesday. “Our members are as diverse as the communities they serve, and $15 an hour is different in New York than $15 in Alabama.”

McDonald’s told its franchisees about its intent to change lobbying weeks ago—an announcement that one operator called “totally unexpected.”

The shift might not sit well with franchisees who say that rising labor costs and company required remodels, along with a push to lower prices, are squeezing margins. Franchisee cash flow has fallen each of the past two years, CFO Kevin Ozan told analysts recently.

And operators have pushed back against some of the company’s requirements, forming the independent National Owners Association last year.

Still, McDonald’s has been signaling its intent to improve its image for years under CEO Steve Easterbrook. He has routinely said that McDonald’s would become a “modern, progressive burger company,” as the company took steps to reduce antibiotics in its chicken and beef and shifted to cage-free eggs.

The company also stopped using Styrofoam cups and joined a group along with coffee giant Starbucks to search for a more sustainable cup. McDonald’s has also taken steps to improve the health of its kid-focused Happy Meals.

By no longer lobbying against minimum wage hikes, the company could be working to improve its image even further.

UPDATE: This story has been updated to include elements from McDonald's letter.

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