The Latest: Tulipshare began its living income engagement with McDonald's in March 2024; click here to read Tulipshare's open letter to McDonald's regarding living income and sustainable sourcing practices.

Review the Interfaith Center on Corporate Responsibility’s Investor Statement of Support for a Living Wage for U.S. Workers here. 

Why it Matters:

Paying a living wage is a cornerstone of building a resilient workforce, which is documented to promote retention and the well-being of employees. A recent study by Northwestern Mutual highlighted that one-third of Americans say they do not feel financially secure – the highest measure of financial insecurity recorded in the study's history. Ample research demonstrates that long-term investments in the workforce result in reputational benefits for companies, improved worker morale, motivation, and productivity, and better recruitment and staff retention. Additionally, whether employed directly by a company or indirectly as contingent or contract workers, workers contribute significantly to building tangible and intangible shareholder value. Companies and investors will benefit from taking steps to better understand the impacts current wage policies and practices have on their workers and to consider pathways toward the payment of a living wage.  

Millions of workers are struggling to pay the bills. A recent study by Northwestern Mutual highlighted that one-third of Americans say they do not feel financially secure – the highest measure of financial insecurity recorded in the study's history. Particularly within the U.S. context, where deeply ingrained inequalities based on race and gender continue to persist, and where women and Black and Hispanic workers remain disproportionately represented in the low-wage workforce, living wages are a practical solution to issues of systemic inequality with direct and broad economic impacts. 

Currently, 34 states, territories, and districts have minimum wages above the U.S. federal minimum wage of $7.25 per hour,  along with nearly 50 cities and counties that have already enacted minimum wages higher than the federal minimum of $7.25.

Additionally, recent labor strikes have resulted in higher pay for union workers and boosted wages for non-union workers, which may be setting a trend toward higher wages in the future. 

Indeed, the Economic Policy Institute reports that recent polls show 67% of Americans approve of unions and that a majority of workers in the U.S. across all sectors—59%—support unionization in their own workplaces. 

Poverty wages, insecure hours and alleged abuse at work led McDonald’s workers to come together in “McStrike.” In 2017, McDonald’s workers in “McStrike” made history when they joined the Bakers, Food and Allied Workers’ Union (BFAWU) and went on strike for the first time, winning McDonald’s workers across the UK their biggest pay rise in over ten years. But their work is not done, McStrike workers are now calling for a real living wage of £15 an hour, guaranteed hours, and recognition of their trade union. Meanwhile, hundreds of McDonald’s workers in California have joined a new union that is the first of its kind, The California Fast Food Workers Union. According to the Washington Post, the “union outlined priorities that include raising the minimum wage by 3.5 percent over the next three years, protecting workers from being fired without a valid reason and establishing rules to guarantee workers are scheduled enough hours to make enough money to sustain themselves. The union will also advocate for workers who experience retaliation for organizing, which labor leaders say is common in the industry.”

This retaliation has been common not just in the industry, but within the McDonald’s community as well, exposing the company to reputational and regulatory risks. In 2023, a McDonald’s franchisee admitted to conducting an unlawful five-year campaign to de-unionise its workforce. Senior managers at the franchise encouraged staff to quit the union, barred members from promotion and threatened to cut permanent workers’ hours unless they shifted to casual employment. Alarmingly, this is not an isolated incident. Vice reported that McDonald’s has, for years, spied on activists and employees engaged in labor organizing and the Fight for $15 campaign. The Vice report revealed the company has been concerned with gathering “strategic intelligence” on workers involved in efforts to secure higher wages, better working conditions and a union, using data collection software to monitor employees and their networks through social media and “a team of intelligence analysts in the Chicago and London offices.”

As the demand for improved human capital management disclosures helps to drive more precise tracking of workforce data, companies ahead of regulatory developments will be better positioned to set long-term strategies for providing a living wage across the workforce. The Securities and Exchange Commission’s Investor Advisory Committee (IAC) recently voted to recommend a new workforce disclosure rule, which may set rules for companies to gather and track relevant information about their employees, including the total cost of a company’s labor and the number of people employed, broken down by whether those people are full-time, part-time, or contingent workers.

McDonald’s is one of the world’s largest global employers, with over 2.5 million employees and over 41,800 locations worldwide. Thus, while a shareholder proposal may focus solely on US operations, McDonald’s is exposed to regulatory and reputational risks globally. Regarding its human rights commitments, McDonald’s states, “We believe businesses like McDonald’s have a responsibility to respect human rights within their spheres of influence. We know we can be a force for good in communities and empower our partners to do the same. We take our responsibility to respect human rights throughout our value chain seriously.” Standardizing a living wage would not only streamline the company's policies and operations, but would position McDonald’s as a global leader in the living wage movement and fulfill the company’s commitment to being “a force for good.”

Given the current economic environment and growing pressure to raise wages, McDonald’s is uniquely positioned to stand as an industry leader should the company set a long-term strategy for providing a living wage across its workforce. As a long-term investor, Tulipshare is calling on McDonald’s to proactively engage with shareholders and improve the salient risks identified in the company’s current human capital management system. 

We will continue to engage with the company on this issue and will keep you informed on the progress of our engagement. 

Engagement Timeline:

10/24/1938- Minimum wage established through the Fair Labor Standards Act of 1938. 

7/24/2009- Federal minimum wage increased from $6.55 to $7.25.

1/26/2021- Raise the Wage Act of 2021 introduced. Set to raise minimum wage to $15 an hour by 2025.

4/27/21- President Biden signs an Executive Order to raise the minimum wage paid to workers in connection with covered federal contracts to $15.00 per hour.

1/18/22- President Biden makes a statement supporting the $15 minimum wage for federal workers and contractors going into effect. “I continue to urge Congress to raise the federal minimum wage to $15 an hour, so that American workers can have a job that delivers dignity.”

7/25/23- Raise the Wage Act of 2023 introduced. Set to raise minimum wage to $17 an hour by 2028. 

11/15/23- ICCR’s Investor Statement of Support for a Living Wage for U.S. Workers released.

2/5/24 & 2/9/24- Legal and General Investment Management co-files proposals at Walmart and Target calling for the companies to establish living wage policies.

3/5/24- Tulipshare began dialogue raising the issue of living wage to the McDonald’s Investor Relations team.

6/20/24- Most recent engagement sent by Tulipshare to McDonald's.