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Barry Ritholtz

The Empty Feeling of McDonald's Pay Raise

McDonald's minimum-pay raise for workers in some of its restaurants probably isn't enough to wean them from public aid.
Maybe the message got through to headquarters.

Maybe the message got through to headquarters.

Photographer: Justin Sullivan/Getty Images

There has been surprising news across minimum-wage land: Paychecks are beginning to rise. Earlier this year, Wal-Mart raised its minimum pay to $9 an hour, then Target matched. Now McDonald's has improved on those rates. Starting July 1, McDonald’s will pay at least $1 an hour more than the local minimum wage for workers at the restaurants it owns in the U.S., the Wall Street Journal reported.

As always, the devil is in the details. And while those details have been far less dramatic than the headlines, they are worth exploring. The motivations of the companies are even more intriguing. Before we delve into why McDonald's did this, let's look at a bit of recent history.