McDonald's Workers Are Lovin' It

McDonald's has announced it will pay workers at restaurants it owns at least $1 above the local minimum wage. The pay hikes would apply to 10% of its workforce, or 90,000 employees.
5:17 | 04/02/15

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Transcript for McDonald's Workers Are Lovin' It
And it's Thursday April 2 the markets in New York her open and are big number this morning is 180 million. That is the amount actually have to pay in the coming year as the company announces penny hikes and at least other at least one dollar above. Local minimum wage for workers not only applied to the restaurant that McDonald's actually owns which is 10% of its workforce or roughly 90000 employees. Hello everyone I'm tie Hernandez in New York in addition to pay hikes McDonald's will also offer paid time off for employees who worked at company for over one year. Here now with. More on McDonald's latest apparent half of Yahoo! finance good morning Aaron good morning time so McDonald's finally upping. The pay for minimum wage workers to this is a response to Wal-Mart in others paying more for low skilled workers. Well I think what Wal-Mart announced and the gap has done prior to that is deafening putting pressure. On other employers you have mostly hourly employees entry level employees and you know it's again a part of a broader could be were having nationally about raising the minimum wage and McDonald's itself has been under a lot of pressure. From. People who want to unionize fast food workers putting a lot of pressure on them to go ahead and make the. Decision that is only covers 10% of workers because 90% of McDonald's restaurants are owned by franchisees so it has moved much ado about nothing in the grand scheme of things. No. I think that's unfair to McDonnell's I think that they can only control the their own stores and on franchisee stores. And I would suspect that they hope that by through moral suasion. That franchisees will also give razors that it raises the entry level employees. As well and and also the reality is if if you're running a franchise like a McDonald's. You're competing with Wal-Mart with the gap with target we TJ Max. With the other places that have announced that they're gonna raise wages for entry level employees say they might have to do it just by the force of the market that there just aren't enough people out there who are. Qualified or you've won a higher at an entry level price. Activists are claiming while this is certainly move in the right direction according to their opinion accompany pulling in over six billion dollars of property you're this is really. A drop in the bucket is this gonna significantly impact McDonald's. I'm it is a drop in the in the bucket for McDonald's again largely because it is just 10% of their their employees. And look you have to remember these are for profit organizations. So every decision they make is gonna have a fought a fact for shareholders and for the customers so there are people out there who are. You know only focused on one of the Regis French U level employees took great let's wait let's raise those we just fifteen dollars an hour. Well the result is going to be first involvement does get a higher a lot less of them scene of more people out of work and probably raise prices which is not going to get for McDonald's customers so that there's a give and take here I would everything in and you know it's easy to bash these companies but there are at least moving in the right direction so I think we should give them some credit for that. Other floors we're seeing a move in this direction is there pressure on other employers of these low wage workers to. Increase their wages. If they're definitely isn't and you know as as said before there's a national debate about the minimum wage the president of the United States has come out and today we needed. And although he's not getting anywhere with congress you have a lot of states that are raising the minimum wage on their own. And you have these workers groups that are protesting again mcdonalds being you know one of the primary targets for them. Wal-Mart has been under a lot of pressure and ultimately I think the market is saying to these companies hey you need to pay. These people more money because ultimately it's better for you. The pace a little bit more money. Then to have to pay somebody new every three months and retrain them there's a B costs associated with that so you have other companies at the electric costs go. Which typically pays a higher we age Braintree level employees then its competitors and they will tell you that that's ultimately better for them better for the profitability as you have. Happier workers who stay on the job longer which is good for customer service and good in retention is very important for any corporation today. This is one of several changes by the news he CEO Steve Easterbrook he's also shuffled the menu you can get breakfast all day at some locations at a McDonald. How Wall Street reacting to some of these new strategic initiatives. We don't. Wall Street is kind of you know giving Easterbrook is as they do would move CEOs and opportunity he's in it I wouldn't say it's a honeymoon phase right now but he's been giving you know a lot of runway to say okay. The company struggled for a couple years now what can you do it Morgan note we're gonna see where your results are gonna bring. I don't think indeed he's done anything it's gotten shareholders think wow this is phenomenal in the you know Morgan. You know go crazy for the stock but you know he's he's been given an opportunity he's trying a lot of different things you just mentioned. They've also. Announced in Germany they're testing out a store where you're gonna have cable service at a McDonald's where you order your food counter in and they bring it to you and maybe that's gonna come to America as well so they're trying on different things there. And we'll Seattle shakes out. All right we'll see Indy errant pass from Yahoo! finance thank you so much for joining us this morning. And it of course keep up with the latest headlines right here on abcnews.com we've been watching the big number uptight Hernandez in New York.

This transcript has been automatically generated and may not be 100% accurate.

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