Chick-fil-A Ups The Minimum Wage

The Lempert Report
August 27, 2018

Chick-fil-A Ups The Minimum Wage

The Washington Post reports that the owner of a Chick-fil-A restaurant in Sacramento plans to go ahead and raise the wages of his employees well ahead of the California increase of $15 an hour - offering a huge bump to $17 to $18 from the $12 to $13 he pays now.

The sizable raise represents a possible new high-water mark for fast-food workers, say restaurant industry analysts, at a time when competition for even unskilled labor is rising amid low unemployment, greater immigration scrutiny and fewer teenagers seeking to work in fast-food jobs.  

Eric Mason, owner of the Chick-fil-A location in Sacramento, told a reporter for the local ABC news affiliate KXTV that he raised his workers' pay from $12 to $13 an hour to $17 to $18 an hour starting June 4, referring to the increase as a "living wage." In California, the minimum wage is $11 for employers with 26 or more workers and will go up $1 a year until 2022.

Mason is investing in a long term approach. He told the reporter "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."

His approach could be a win – with 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 Bureau of Labor Statistics data — it could be agreat investment to avoid the cost of retraining and building a more solid work force in an era where there are less qualified candidates for these minimum wage jobs.

That's particularly so, the Post writes, for a chain like Chick-fil-A, which has a reputation for its 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. You need people who’ve been in their job for a while. That’s Chick-fil-A's reputation, and that’s very true across the country." 

Smart and good business.