Fast food franchises are doling out bigger bucks as they continue to battle with the government handouts to recruit workers.
The combination of state and federal unemployment benefits have made it more attractive for some to stay on the sidelines during the pandemic, though the federal benefits are beginning to expire around the country.
Until then, fast food franchises are pulling out of all of the stops to push a hiring frenzy in the industry.
Axios reports that one McDonald’s in Arlington, Virginia, is offering a $500 sign-on bonus for new employees.
Wendy’s is offering $100 signing and referral bonuses to new hires, in addition to same-day pay.
Chipotle is increasing the pay of restaurant workers to an average of $15 an hour.
In Ohio, White Castle has started to boost hourly pay from $11.50 to $15, according to The Columbus Dispatch.
Federal unemployment benefits are supposed to end by Labor Day across the country, but in some states, they’re ending early.
CBS New York reports that Maryland and Tennessee are among the states set to see them expire next, on July 3.
Wendy’s is among the fast food chains offering new benefits to get employees in the door
Some employers (such as this fast food chain) are offering same-day or next-day pay
A hiring sign is seen in front of a McDonald’s branch, as many restaurant businesses face staffing shortages
‘Everybody is trying to figure out what they need to do to get people in the door,’ president of Employment Solutions Columbus Charlie Carter said.
The changes come as the hospitality industry is currently facing a severe labor shortage.
In April, there were 349,000 job openings in the food-services industry according to data from the Bureau of Labor Statistics leading some restaurants to raise their wages in an effort to attract workers.
In March 2019, the average weekly payment to an unemployed person was $348 when combining federal and state unemployment payments. That nearly tripled to $938 in April 2020. Now they’re still $638 -a-week – $300 more than they were before. It means, someone who was working 40 hours a week before the pandemic now gets nearly $16-an-hour to do nothing at home, which is more than double the federal minimum wage of $7.25
Meanwhile, the unemployment rate sat at 5.8 percent in May – well above the 3.5 percent achieved by Donald Trump at the height of his presidency, just before COVID hit.
McDonald’s said recently that it wanted to hire 10,000 employees at company-owned restaurants and would raise pay at their locations.
Entry-level employees would earn at least $11 to $17 after the increases while supervisors would earn an hourly minimum of $15 to $20.
Non-managerial employees at company-owned stores earlier this year earned an average of nearly $12 an hour with supervisors earning $16 to $18 an hour.
Part of the reason for the ongoing labor crisis is because of the ongoing COVID-related unemployment benefits being offered by many US states – some of which pay considerably more than an entry-level job would.
Nearly 15 million people claimed some form of unemployment insurance benefits in late May, up from about 2 million before the pandemic.
In eight states, the unemployed can earn at least $600 per week in benefits. Massachusetts offers the most generous benefits
Massachusetts and Washington are the most generous states, offering those on unemployment benefits up to $850-a-week, although those handouts will end in September as the economic recovery gathers pace.
In March 2019, the average weekly payment to an unemployed person was $348 when combining federal and state unemployment payments.
That nearly tripled to $938 in April 2020, when Trump passed CARES – a temporary economic plan that boosted weekly unemployment payments by $600 and also gave employed people one-off stimulus checks. It expired in last summer.
The number of Americans applying for new jobless aid rose 37,000 to 412,000 two weeks ago for the first time in two months, the Labor Department said
Now, the average weekly unemployment check is $638 – still $300 more than before the pandemic, and it’ll stay that way until September 6 at least.
It means, someone who was working 40 hours a week before the pandemic now gets nearly $16-an-hour to do nothing at home, which is more than double the federal minimum wage of $7.25.
Dozens of US states have already ended, or are in the process of ending those benefits to encourage people back to work, with the latest hold-outs set to end their COVID unemployment programs on September 4.