A Chick-fil-A will pay $18 an hour to re­tain work­ers

The Washington Post - - ECONOMY & BUSINESS - BY JENA MCGRE­GOR jena.mcgre­[email protected]­post.com

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

PA­TRICK FAL­LON/BLOOMBERG NEWS

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...

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