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Burger flippers are about to get paid!
American icon McDonald’s (MCD, Weiss Ratings: C+) said it would boost hourly wages for around 90,000 workers, beginning in July. The move will increase average pay to $9.90 from $9 now. It will be followed by another increase to more than $10 per hour in 2016.
That’s a roughly 10 percent increase, and McDonald’s is far from alone. Retailers Wal-Mart Stores (WMT, Weiss Ratings: B) and Target (TGT, Weiss Ratings: C) announced similar steps recently. McDonald’s and its peers say the increases are designed to improve employee morale, which would theoretically improve customer service. The Golden Arches also plans to introduce paid time off and education assistance.
|The McDonald’s pay hike only applies to company-owned locations, not franchises.|
The problem? The move only applies to its 1,500 company-owned restaurants, not franchised locations. That means 90 percent of McDonald’s U.S. workers are at the mercy of franchise owners. If they decide to act like Scrooge McDuck, their employees won’t get a penny more!
The increase also leaves wages far below the $15 level that protesters have been agitating for. Meanwhile, the federal minimum wage hasn’t budged in six years — remaining stuck at $7.25. Many states and cities have taken matters into their own hands and jacked their minimums up. But momentum on the national level remains elusive.
Bottom line: Every little bit helps, when it comes to American workers finally getting a bigger piece of the profit pie. But McDonald’s and other corporate icons will need to go a lot farther to make an impact on the economy as a whole. Wage growth has been anemic in this recovery, even as the stock market has been making higher highs for the past several years.
|“McDonald’s and other corporate icons will need to go a lot farther to make an impact on the economy as a whole.”|
Now it’s your turn! Do you think McDonald’s is making a smart move here? Will it make a real difference in the lives of the company’s workers … and what impact will it have on investors in Mickey D’s shares? Do you believe even more American companies will follow suit, and what kind of impact will that have on the economy?
Here’s the link again to the Money and Markets website. Speak up when you have a chance!
|Our Readers Speak|
Meanwhile, the discussion on the dollar, inflation and other topics is going strong over at the website.
Reader Chuck B. asked the following in regards to the greenback: “How can the currency of a nation which officially owes more than $18 trillion be rising so sharply? Makes no sense — unless other nations’ debts are even worse. In a few cases they are, in GDP terms, at least, but not all cases by any means.”
Reader Joan said prices are still a problem, regardless of what the government numbers show. Her view: “Inflation in the U.S. easing? Obviously, you don’t shop at Whole Foods (WFM, Weiss Ratings: B+). I walked in there yesterday to pick up an item and went into sticker shock at the meat counter.
“Beef, pork, fowl jumped like 25 percent! For example, pork chops were up a dollar more a pound. Same thing with turkey thighs and beef — out of sight.”
Reader Jim noted that there are quite a few bargains in beaten-down sectors, and are worth looking at even if the recovery takes a while. His take: “The most difficult part of investing is making yourself buy when they have a sale. No matter when you think oil or gold may turn, someday they will. Buying companies that are holding up in a bear market and continuing to increase production in a cost effective manner seems a smart way to do this.”
Jim cited oil and gas producer Synergy Resources (SYRG, Weiss Ratings: A) and Canada’s Richmont Mines (RIC, Weiss Ratings: B-) as names he likes. If you have any thoughts on them, or other stocks in those sectors, fire away at the Money and Markets website!
|Other Developments of the Day|
The U.S. and its negotiating partners allowed multiple deadlines to slip during the Iranian nuclear talks this week. Then late in the day today, they announced that after meeting for several days, they had an agreement that basically says everyone will keep meeting. Yes I’m serious.
Specifically, the broad statement says that if all the parties can agree later on detailed limits on centrifuge operations, research activities, and monitoring, then sanctions will gradually be rolled back. But nothing will actually happen until at least June 30, when a final deal is supposed to be signed. And that’s assuming everything doesn’t fall apart between now and then, which would be par for the course given the failure of multiple rounds of negotiations over the past few years.
While much of the focus remains on Middle East terrorist groups, African affiliates of al-Qaeda and ISIS remain active. Several militants with links to the Al-Shabaab group in Somalia stormed Garissa University College in Kenya and gunned down students overnight. The death toll had risen to 147 by late today, and could rise even higher.
It’s dry in California. So dry in fact, that Governor Jerry Brown just ordered local water boards to slash usage by 25 percent. That will lead to a wide range of restrictions on business and home water use.
The crisis stems from a multi-year lack of precipitation. That has resulted in an anemic snowpack in the mountains, starving California’s coastal and inland cities and towns of a vital source of water.
Tomorrow’s “official” March jobs report will be a bit of an oddity, since it comes on a stock market holiday. Bond and currency markets will have a chance to react in an abbreviated trading session, though.
Investors are watching closely to see if the report will confirm the weakness that ADP’s data hinted at. In the meantime, we just learned that initial jobless claims fell 20,000 to 268,000 in the most recent week. That was a better reading than economists expected, and a nine-week low.
Want to weigh in on the job market? Iran? The epic drought? Then here’s the link to the website.
Until next time,