Chipotle raises wages amid expansion
The burrito fast-food chain Chipotle announced Monday that it is raising wages for its workers — a move that comes as the company makes a big hiring push amid a national debate about worker availability and pay.
The company said a wage increase of about $2 an hour means salaries for its crew will average $15 an hour by the end of June, although the entry-level wage will be $11 an hour.
The company also said it plans to hire 20,000 new workers and open 200 new locations this year.
The company joins the ranks of many others offering incentives and higher pay to lure people back into the work force after the pandemic year, including Costco, Target and Walmart.
Many businesses, particularly those offering lower-wage, hourly positions, like restaurants, have complained they are having trouble finding workers — even amid high levels of unemployment — which has raised concerns that a worker shortage could hamper the economic recovery.
Job growth in April came in well below expectations, with 266,000 jobs added as the country seeks to regain the more than 8 million more jobs it had in February 2020. The Bureau of Labor Statistics said the wage increases found in the survey reflected the increased demand for labor.
In Washington, lawmakers have seized on the matter for political purposes, with Republicans saying the labor supply problems are the direct result of overgenerous stimulus measures passed by Democrats earlier this year.
But labor economists, worker advocates and some business groups say the issue is far more complicated, with many workers forced to juggle child care with many schools yet to fully reopen, lingering questions about workplace safety for vaccine-avoiders and others with complicated health considerations, and many workers having moved on or rethinking career plans.
The debate has also resurfaced the larger national discussion about living wages for poorly paid workers.
President Joe Biden pushed to raise the federal minimum wage from $7.25 an hour — about $15,080 a year, before taxes — to $15 an hour, after a more than 10-year gap since the last increase, but the idea was shelved because of procedural rules in the Senate. Many of the companies complaining about worker shortages pay below this threshold, usually at levels below what advocates consider a “living wage” — the amount it takes to live and raise a family in many areas of the country.
Some economists say businesses hiring for lowerwage positions also face increased competition from companies like Target and Amazon that have voluntarily increased starting pay amid plans to expand.
“Chipotle is committed to providing industry-leading benefits and accelerated growth opportunities, and we hope to attract even more talent by showcasing the potential income that can be achieved in a few short years,” Marissa Andrada, a company executive, said in a statement Monday. “We’re looking for people who are authentic, passionate and want to help cultivate a better world through real food and real personal development.”
Chipotle’s labor practices have come under legal scrutiny in recent years.
Officials in New York City last week sued the company for $150 million, alleging about two years’ worth of violations under the city’s 2017 Fair Workweek Law, which added restrictions for companies for things like changing employee schedules without sufficient notice and working consecutive overnight-reopening shifts. Chipotle called the lawsuit “dramatic overreach” and said it plans to contest it.
In Massachusetts last year, the company was ordered to pay $1.4 million in fines over claims that it racked up more than 13,000 child labor law violations.