Chipotle raises wages amid expansion plans, as companies compete for workers

May 11, 2021

The fast-casual food chain Chipotle Mexican Grill announced on May 10 that it is raising wages for workers amid a big hiring push based on expansion plans.

The move comes as restaurants nationwide debate worker availability and pay levels, The Washington Post reports.

 The company said it plans to hire 20,000 new workers and open 200 new locations this year. In line with those ambitions, Chipotle will institute a wage increase of about $2 an hour per employee—meaning that salaries for its crew will average $15 an hour by the end of June, although entry-level wages at the company will remain at $11 an hour.

The company joins the ranks of many others offering incentives and higher pay to lure workers back into the workforce after the pandemic year, including Costco, Target, and Walmart, among others.

The Post notes that many businesses, particularly those offering lower-wage, hourly positions, like restaurants, have complained that they are having trouble finding workers—even with high levels of unemployment—which has raised concerns that a worker shortage could hamper the economic recovery.

Job growth in April came in well-below expectations, with only 266,000 jobs added as the country seeks to regain the more than 8 million more jobs it had in February 2020. The Bureau of Labor Statistics said that the wage increases found in the survey reflected the increased demand for labor.

Chipotle CEO Brian Niccol told CNBC on Monday that the current labor market was among the tightest he’d ever seen in his career—saying the company was hoping to highlight the appeal of the brand and the employee growth potential. Workers also are being offered a $200 referral bonus for employees and a $750 referral bonus for managers.

 “We are sharing with people that it’s not just a job right now, but it’s actually a job that can lead to a meaningful career,” Niccol told the outlet. “I’m glad that we’re a company that’s got the growth, and frankly the strength, to increase wages and start talking more about how the job leads to your future growth with our company.”

In Washington, D.C., lawmakers have seized on the matter for political purposes, with Republicans complaining that the labor supply issues are the direct result of overgenerous stimulus measures passed by Democrats earlier this year.

But labor economists, worker advocates and some business groups say the issue is far more complicated, with many workers forced to juggle child-care with many schools yet to fully reopen, lingering questions about workplace safety for vaccine-avoiders and others with complicated health considerations, and many workers having moved on or rethinking career plans.

“Chipotle is committed to providing industry-leading benefits and accelerated growth opportunities; and we hope to attract even more talent by showcasing the potential income that can be achieved in a few short years,” Marissa Andrada, a company executive said in a statement Monday. “We’re looking for people who are authentic, passionate and want to help cultivate a better world through real food and real personal development.”

CFO Jack Hartung told investors earlier this year that raising its salary average to $15 an hour would cause menu prices to spike at least 2%  to 3%. The company did not respond to an immediate question from the Post about whether it would raise its menu prices to pay for the voluntary wage hike.

Research contact: @washingtonpost

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