One of the key issues this election season involves the drive for a $15 minimum wage.
That's a dollar amount only reached by a very select few municipalities and it's more than double the federal minimum wage of $7.25, which has been in place since 2009. The majority of states have a higher minimum wage than the federal minimum, but five don't have one at all, and two -- Georgia and Wyoming -- have state rates lower than $7.25 (though the federal rate applies), according to the Department of Labor.
Still, even Massachusetts which leads all states at $10 (District of Columbia comes in at $11.50), remains well below $15 an hour. If a worker earns the $7.25 federal minimum, he or she would make $15,080 a year (before taxes) assuming a 40-hour workweek for an entire 52-week year. That's actually a little bit above the federal poverty line of $11,880 for an individual, but below the thresholds of $16,020 for a family of two, $20,160 for a family of three, and $24,300 for a family of for a family of four, according to Healthcare.gov.
The federal poverty level however is not a gauge on whether someone can provide shelter and food for themselves and their family, it's a number used determine eligibility for certain programs and benefits, including savings on health insurance and Medicaid. It's an extreme example, but even if a family of four had two full-time minimum wage workers and somehow did not also have a child care expense, that would be family income of $30,160 a year -- perhaps enough to get by some places, but by no means on easy street.
That group, the working poor -- people who hold jobs, sometimes more than one, but can't meet their own or their family's basic needs -- are the ones pushing companies to pay higher wages. That movement has not pushed any major brands to the $15 threshold, but a number of well-known companies have raised pay rates, sometimes for their lowest-paid workers only, and sometimes for a broader range of hourly employees or even lower-level managers.
Here's a look at what some big companies have done.
Starbucks steps up
Starbucks (NASDAQ:SBUX) has been celebrated for its benefits, which include offering a free college education via online classes, health insurance, stock grants, and more, but it has not been a leader in wages. The coffee chain recently announced a plan to increase hourly rates by at least 5% while also increasing its "Bean Stock" program, which grants shares.
"The combination of these changes will result in compensation increases between 5% and 15%," wrote CEO Howard Schultz in a letter to employees.
The company, which pays differing rates depending upon the market, does not publicize its hourly rate, but employer rating site Glassdoor reports that a survey of 2,650 baristas shows that they make $9.43 an hour, while a separate report on nearly 2,000 shift supervisors yields an average $11.65 an hour. If you assume the average worker gets a 10% raise as part of this new deal (factoring in the stock awards) that would put barista pay at $10.37 and hour while shift supervisors would get $12.81.
Chase begins a three-year plan
While banks have not been under fire in the way that retailers and restaurants have been during this national debate on wages, JPMorgan Chase (NYSE:JPM) has decided to increase wages for its lowest-paid workers. The company, which currently has a minimum hourly rate of $10.15, will increase that over the next three years, according to an op-ed written by CEO Jamie Dimon for The New York Times.
"Over the next three years, we will raise the minimum pay for 18,000 employees to between $12 and $16.50 an hour for full-time, part-time and new employees, depending on geographic and market factors," he wrote.
Wal-Mart and Target are paying more
Both Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have raised their wages recently. Wal-Mart gave an increase to more than 1 million of its lowest-paid workers in February, making the minimum wage for existing workers $10 an hour. In addition, any new employees will start at $9 an hour and move to $10 after completing the company's training program.
These move take the chain's average full-time hourly wages to $13.38 an hour while the average part-time hourly wage comes in at $10.58 an hour, according to a company press release.
Target matched Wal-Mart's move in May when it also increased its minimum hourly rate to $10 an hour, Reuters reported. At the same time, the company also gave raises to employees already making more than $10 an hour.
Some McEmployees get a raise
Unlike the other companies on this list, McDonald's (NYSE:MCD) does not control what all of the workers at its locations get paid. Because many of the chain's restaurants are owned by franchisees, the company cannot dictate pay rates. Instead, it can set an example at corporate-owned stores with the hope that franchises follow that lead.
To do that, the company has raised its minimum hourly rate at all corporate stores in the United States.
"On July 1, 2015, starting wages at McDonald's company-owned restaurants in the U.S. will be one dollar over the locally mandated minimum wage," the company wrote in a press release. "The wages of all employees up to restaurant manager will be adjusted accordingly based on tenure and job performance. By the end of 2016, McDonald's projects that the average hourly wage rate for McDonald's employees at company-owned restaurants will be in excess of $10."
That' still at the lower end of the scale for the companies on this list, but it places McDonald's ahead of other fast-food chains, which may be important when it comes to hiring in an improving economy where worker supply has gotten scarcer.
Daniel Kline has no position in any stocks mentioned. His first job paid him $5.50 an hour under the table. The Motley Fool owns shares of and recommends Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.