NEW YORK (CNNMoney) — McDonald’s plans to increase hourly wages by for roughly 90,000 workers — a move that follows in the footsteps of retail giants Walmart and T.J. Maxx and new state minimum wage laws across the country.
Effective July 1st, McDonald’s starting wages will be at least $1 an hour more than the minimum wage set by local law, the fast-food chain announced Wednesday. Meanwhile, all employees up to restaurant managers will get a pay bump as well.
The result: the fast food giant projects that its average hourly wage will reach more than $10 an hour by the end of 2016. That’s $2.75 above the federal minimum wage.
There’s a catch — The raise only applies to the 1,500 McDonald’s-owned restaurants in the U.S. It doesn’t apply to workers at the franchisee-owned stores, which make up about 90% of the McDonald’s restaurants in the country and the bulk of its workforce.
New CEO Steve Easterbrook said in a statement that the pay raise, along with better benefits like paid time-off, was in response to employee surveys and is aimed at improving its business.
“We know that a motivated workforce leads to better customer service so we believe this initial step not only benefits our employees,” he said. “It will improve the McDonald’s restaurant experience.”
The news comes on the heels of a wave of good news for low wage workers, who have staged protests across the country demanding higher pay.
In February, Walmart said it would institute a series of pay raises for workers so they will receive at least $9 an hour this month and $10 an hour next year. The parent company of T.J. Maxx, Marshall’s and Home Goods made a similar announcement the same month.
Meanwhile, minimum wage hikes went into effect this year in 20 states, including South Dakota, Nebraska, Alaska and Alabama and Washington, D.C.
But one McDonald’s worker said the wage hike isn’t enough.
“This is too little to make a real difference, and covers only a fraction of workers,” Kwanza Brooks, a McDonald’s worker from Charlotte, North Carolina said in a statement issued in response to the news. “We’re going to keep fighting until we win $15 and union rights for all fast-food workers and our families.”