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A Look Inside Incentivized Hiring Practices

Recently, a new trend has begun. Certain businesses are trying unusual tactics to get individuals to either apply to the company or work there. McDonald’s is a perfect example.

Some McDonald’s franchises are offering “free iPhones” to individuals who will agree to start working there. Some people call this incentivized hiring. The reason McDonald’s and some other fast-food franchises and similar establishments are having trouble hiring people is that they are offering very poor starting wages.

Will this tactic work? That’s not entirely clear, but it’s fascinating to watch this epic tug-of-war between corporations and would-be workers. Let’s talk about what’s happening in a little more depth.

The Fight for Fifteen

In some states, there has been a “fight for fifteen” going on for several years. Bernie Sanders talked about it during his presidential runs. Other politicians have also advocated for it.

As someone who’s in the job market and trying to support yourself, there are all kinds of ways you might attempt to make a living. You can try to make money on your own by taking on freelance assignments or creating membership sites if you’re the creative type. Many Millennials and Gen-Z members are also trying to become influencers, monetizing their Instagram and Twitch feeds.

Plenty of other people don’t know how to do any of that, though, so they have to at least consider taking on fast-food and retail work. The problem is that the federal minimum wage is stuck at $7.25 per hour, just as it has been for many years.

The “fight for fifteen” means that workers and certain politicians are advocating for $15 per hour minimum wage. Other politicians, though, are digging in their heels and doing everything they can to prevent that.

Why Do Some Politicians Block Minimum Wage Raises?

You might wonder why a politician would block a minimum wage increase, either in their state or at the federal level. Often, they do it because there are lobbyists from the various corporations that want to keep the minimum wage lower who are leaning on them.

These lobbyists help get these politicians elected, and then they use their influence to get them to vote against minimum wage increases. That’s a huge reason why the federal minimum wage has not budged for years, even though inflammation has made the price of everything else keep rising, from food to healthcare to housing.

What’s a Fair Minimum Wage?

You could argue that even if the federal minimum wage went up to $15 per hour, that’s still nowhere near enough for most individuals to get very far above the poverty line. If the federal minimum wage is $15 per hour, and you’re working 40 hours per week with no vacation or time off during the year, that still only equates to $28,800 per year, and that’s before taxes.

You can’t live on that in virtually any major city in the country. That’s why so many people can’t get out of debt and why so many individuals are clamoring for student loan forgiveness.

Realistically, a decent living wage would be more like $25-30 per hour. Still, it seems as though the likelihood of that happening anytime soon is practically nonexistent.

The Fast-Food Restaurant Conundrum

In spite of the federal minimum wage remaining stuck at $7.25, some fast-food restaurants, such as McDonald’s, Wendy’s, and others, have had to raise their starting worker wages at least somewhat. That is because they simply can’t attract any workers unless they do. No one seems willing to work for less than $10 per hour anymore, and many of them are doing all they can to demand more than that.

What’s interesting, though, is that many of these fast-food franchises and retail stores seem willing to try just about anything to attract some potentially interested workers, short of raising their starting pay. That’s why some McDonald’s locations are offering a “free iPhone” to those employees who sign up with them right now.

However, there are some pretty significant caveats. The iPhones aren’t new. They’re models from several generations ago that McDonald’s probably bought from Apple in bulk. Also, many workers feel like McDonald’s will use the phones to have these new employees on call so they can come in on their day off if someone else calls out.

McDonald’s is trying a different tactic than Costco, for instance, which has universally higher starting pay, and therefore, much better worker morale. Only time will tell which strategy proves more successful.