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The McDonald’s Vacation Plan Is A Bigger Deal Than The Pay Raise

Forget the paltry McDonald’s raise. The real news is that the fast food giant is going to start offering its workers paid vacation time.

According to The Wall Street Journal, McDonald’s will raise pay and offer paid vacation for about 90,000 workers at its 1,500 company-owned U.S. stores. (The announcement doesn’t affect the far larger number of workers at the 14,350 U.S. McDonald’s stores owned by franchisees.) Starting July 1, the chain will pay at least $1 an hour more than the local minimum wage.

The announcement, which comes on the heels of similar moves by Wal-Mart, Target and other big employers, is the latest piece of evidence that the improving economy is at last trickling down to low-wage workers. But let’s not get carried away. McDonald’s says the new policy would boost average pay by about 10 percent, to $9.90 an hour. That’s shy of both the $15 an hour that union-backed protesters have been demanding and of the $10.10 an hour that President Obama has called for.

The new vacation policy, however, might be a bigger deal. McDonald’s said its workers will start being able to accrue up to five days of paid time off once they’ve been with the company for a year.

Five days of vacation may not sound like much, but it’s a better deal than many similar companies offer. According to the Bureau of Labor Statistics, only 39 percent of workers in the bottom 10 percent of earners get any paid time off at all. Among all part-time workers, the rate is an even lower 34 percent. (In the accommodation and food service sector, 45 percent of workers get paid vacation, but that figure includes everyone from fry cooks up to CEOs. The share among low-wage workers in the sector is almost certainly much lower.) Overall, 77 percent of private-sector U.S. workers get access to paid vacation.

The McDonald’s announcement comes as Obama has been pushing for employers to offer paid leave (although that effort has focused primarily on family leave and sick time, not vacation) and as the Service Employees International Union has spent millions supporting the “Fight for $15” unionization movement among fast-food workers. There’s no way to know whether that kind of public pressure contributed to McDonald’s decision or whether other companies will follow suit.

Ben Casselman is a senior editor and the chief economics writer for FiveThirtyEight.

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