McDonald’s Employees Wage Not A Problem In Australia; Macca’s Staff Paid Almost $15/Hr
McDonald’s in the U.S. is having a conundrum of Big Mac proportion these days, and neither the franchisers nor the employees are lovin’ it. But while staff workers of the American burger chain are fighting for higher hourly wage, their Australian counterparts are not crying the same complaints. They are already earning almost $15 an hour, and they are about to earn more.
In late July, workers from fastfood joints like McDonald’s and Taco Bell in a few U.S. cities picketed their restaurants to demand $15 pay per hour, twice of what many of them currently earn.
But in Australia, earning that much isn’t a problem. The minimum wage for full-time adult workers already hits about $14.50. What they are after now is their pay increase for 3.5% every year commencing in June 2013 and expiring in June 2017, which has already been approved by the Fair Workers Commission.
Yet still, Australian McDonald’s, or locally known as Macca’s, does profitable business in the country.
It is perhaps because Aussie franchise also has higher prices compared to the U.S.
But, as The Atlantic has pointed out, not everything gets passed onto the consumers. The Australian McDonald’s franchise also uses tactical employment. Instead of hiring all adult workers, they hire teenagers. According to the labour deal the fastfood has struck with its employees, 15-year-old and under workers are paid around A$7.58 per hour.
As a result, Macca’s rely heavily on their young workers.
It’s also possible that workers in Australia are given more responsibility, allowing managers to get more mileage out of their staff for their wage.
Another theory why Australia’s McDonald’s can pay their workers relatively high wage and yet still manage to profit is because it thinks of ways to draw the higher spending crowd. The country became the first that built McCafe coffee shops in 1993, selling highly profitable gourmet coffees.
Even if the U.S. started to implement Australia’s wage policy, McDonald’s has another problem. Their franchisees are revolting over the corporation’s rising store fees.
Bloomberg reports that the franchisees are complaining that it cost too much to operate a restaurant when running it “is not as profitable business as it used to be.” Some of them are paying up to 12% of store sales in rent, and they want a historic return rate of about 8.5%.