A Chick-fil-A will pay $18 an hour to retain workers
By 2022, the minimum wage in California will rise to $15. But the owner of a Chick-fil-A restaurant in Sacramento plans to go ahead and raise the wages of his employees now, offering a huge bump to $17 or $18 an hour from the $12 to $13 he currently pays.
The sizable raise represents a possible high-water mark for fastfood workers, restaurant industry analysts say, at a time when competition for even unskilled labor is rising amid low unemployment, greater immigration scrutiny and declining demand for fastfood jobs among teenagers. While analysts can’t say whether the $18 hourly wage is the highest in the country for fast-food workers, it certainly appears to be among the higher ones, said David Henkes, a senior principal with Technomic, a restaurant research and consulting firm.
“We’re seeing a lot of operators that are in that $12 to $15 range, especially in higher-price areas like California, but that’s sort of a new threshold,” he said. “In an era of 3.9 percent unemployment, restaurants — which typically are not seen as the most attractive of jobs — are struggling to not only fill jobs but then retain workers.”
The owner of the Chick-fil-A location in Sacramento, Eric Mason, told a reporter for local ABC affiliate KXTV that he would raise his workers’ pay from $12 to $13 an hour to $17 or $18 an hour starting June 4, referring to the increase as a “living wage.” In California, the minimum wage is $11 an hour for employers with 26 or more workers, and it will go up $1 a year until 2022.
“As the owner, I’m looking at it big picture and long term,” Mason said in an interview with the TV station. “What that does for the business is provide consistency, someone that has relationships with our guests, and it’s going to be building a long-term culture.”
A marketing staffer at Mason’s location said all questions were being referred to Chick-fil-A’s corporate office. A spokeswoman for the chain confirmed the wage figures and noted that restaurants are individually owned and operated, leaving wage and benefit decisions to local owners. “Chick-fil-A strives to create a compelling employment value proposition,” she wrote, adding that the company is awarding nearly $15 million in college scholarships to employees this year.
Restaurant analysts said that unlike retailers that have publicized pay increases above the minimum wage, fast-food restaurants tend to be operated by franchisees, making it trickier to set company-wide standards. Many restaurant chains also operate on tight margins, making it harder to raise wages without raising prices for consumers or cutting into profitability.
But the high cost of turnover in the restaurant business — the turnover rate in the restaurants and accommodations sector was 73 percent in 2016, according to federal data — could mean that wage raises are balanced out by savings in training and hiring new workers, said Warren Solochek, a senior vice president at the NPD Group.
That’s particularly true for a chain like Chick-fil-A, which has a reputation for customer service and prides itself on friendly employees, he said: “You can’t have that high level of service when you continually hire people and have to train people.”
Many workers in the industry receive low pay, despite efforts like the Fight for $15 campaign, which has helped raise minimum wages in many states and cities. Median hourly pay for fastfood workers is $8.26, according to PayScale, and benefits for many part-time fast-food workers are limited, forcing even some who work full time to rely on public assistance.
“As the owner, I’m looking at it big picture and long term.” Eric Mason, owner of a Chick-fil-A location in Sacramento
Chick-fil-A prides itself on its customer service, but “you can’t have that high level of service when you continually hire people and have to train people,” one analyst said. With unemployment low, the restaurant industry overall is struggling to...