McDonald’s raises wages in China
BEIJING – US fast-food giant McDonald’s says it will raise the salaries of its workers, including part-time employees, at its 800-plus Chinese outlets, effective from September 1.
About 95% of McDonald’s China “crew” will see a pay increase of 12-56%, or an average of 30%, said Jeffrey Schwartz, chief executive officer of McDonald’s (China) Co Ltd. The remaining 5% are already being “paid very well”. This will involve about 45,000 full-time and part-time workers, including students.
McDonald’s has broadly three types of employees: crew, or the non-managerial staff serving at its outlets; managers; and administrative staff. “We have raised salaries in China many times, but this is the first time there is such a large increase covering so many people,” Schwartz said.
The announcement comes a few months after media reports about McDonald’s and other foreign fast-food operators such as KFC paying their part-time staff less than the local minimum wages (see China’s part-time McWorkers exploited , Asia Times Online, April 20).
But Schwartz said the company’s decision to raise pay has nothing to do with the pay-related bad press it has been getting. “We have been looking at a wage increase for a year. The issue [reports of low pay] only reminded us that we need to move more quickly.”
Under the new wage initiative, pay for McDonald’s “crew” across China will be “much higher than the local minimum levels”.
“It will be 15% higher in both Beijing and Guangzhou, and 12% higher in Shanghai,” said Susanna Li, vice president of McDonald’s China human resources. For example, full-time workers in Guangzhou will see their monthly wages rise 21% to 1,072 yuan ($142).
Though the Labor Bureau of South China’s Guangdong province clarified in June that McDonald’s had complied with the regulations set by the local government, the issue of underpaying part-time employees has dented the company’s image. Many workers had claimed they were receiving the city’s legal minimum wage of 7.50 yuan an hour.
And that’s the last thing McDonald’s would like to see. “China contributes 2% of McDonald’s global sales, which is a significant amount. Annually, McDonald’s opens 100 new stores in China,” Schwartz said. “We don’t want to be thought of in that [negative] way. We want to be the best employer in China.”
McDonald’s managers, who account for 14% of its total local staff, are not included in the wage-increase program, but they have benefited from the “profit-award program” that started last year.
In 2006, 80% of the fast-food giant’s Chinese managers received a bonus of up to twice their annual salary.
(Asia Pulse/Xinhua Information Center)