In the U.S., the minimum wage is something that affects millions of workers. In the last couple of years, many companies and several states have increased the hourly payment due to higher cost of living. One of the most commented cases was McDonald’s, with a $15 per hour benchmark at its corporate-owned locations but may see wages exceed $20 per hour in certain areas by 2026.
This change happens because state laws and the cost of living are forcing the adjustment of salaries in certain places. So, let’s learn more about this situation.
Salaries in 2026
The federal minimum wage in the U.S. is $7.25 per hour and it hasn’t changed since 2009. However, many states have decided to establish higher minimum wages to help their residents cover their expenses, which become higher every year.
At the beginning of this year, 19 states increased their minimum wage. So, more than 8.3 million people experienced this increment and, for the first time, there are more workers living in states where the minimum wage is $15 or more than in states where the federal minimum wage of $7.25 is still being applied. Let’s see some clear examples:
- California: $16.90 per hour since January 1.
- Washington: $17.13 per hour.
- New York: $17 per hour in New York City and Long Island; and $16 in the north of the state.
What’s more, other states have also programmed increments this year, such as: Arizona, Colorado, Connecticut, Hawaii, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, Ohio, Rhode Island, South Dakota, Vermont and Virginia. Some states will raise their salaries in the middle of this year, like Alaska, Florida, and Oregon.
All of these increments reflect that states are adjusting the minimum wage to adapt it to the higher cost of living.
McDonald’s
In the case of restaurants, not all of them work the same way. There are two ways:
- Corporate-owned restaurants.
- Franchised restaurants owned by independent operators.
At company-owned locations, McDonald’s reached an average hourly wage of about $15 by the end of 2024, meeting its internal goal. However, most McDonald’s restaurants are franchised. Franchise owners can set wages based on local labor market conditions and state laws, which means pay can vary depending on location.
As of January 2026, entry-level hourly pay at McDonald’s ranged between about $13 and $17 in many parts of the country. In more expensive states such as Washington and New York, workers are already earning between $17 and $18 per hour because state laws require it.
California has taken an additional step. In April 2024, the state implemented a $20 per hour minimum wage specifically for fast food workers. As the state continues adjusting wages to account for inflation, estimates suggest that fast food workers in California could earn $20.70 or more per hour in 2026.
It is important to note that McDonald’s has not officially announced a nationwide minimum wage increase. So, any wages above $20 in certain areas are the result of state laws and cost-of-living adjustments.
Other big companies increasing salaries
MacDonald’s is not the only company that has decided to pay more than the federal minimum wage, so let’s have a look at which popular companies are also doing this:
- Starbucks increased the hourly payment of most of its workers by at least 3% in 2024, with larger increases of 4% to 5% for longer-tenured staff. This brought the average entry-level wage to more than $17.50 per hour. Team leaders earned approximately $33.61 per hour in 2024.
- Walmart has also raised compensation, with average hourly pay for field associates currently around $18.25. The company is also transitioning to a new performance-based pay structure for more than 500,000 U.S. workers. Instead of standard raises for everyone, pay increases of up to 5% will be awarded based on merit.
- Costco announced that it will increase pay for workers already earning $20 per hour to $21 per hour.
Minimum wage
The federal minimum wage was created in 1938 under the law known as Fair Labor Standards Act, during the Great Depression. At that time, the goal was to stabilize the economy and protect working-class people.
The first minimum wage salary was 25 cents per hour and now it’s $7.25. Can you imagine working for that small amount of money?
Minimum wage laws are designed to ensure a basic standard of living for workers and to prevent exploitation. They also help stimulate the economy, since higher wages can increase consumer spending.
Currently, there are proposals in the U.S. Senate to raise the federal minimum wage to $15 per hour, including a bipartisan bill introduced by senators from Missouri and Vermont.
So…
There has been no official nationwide wage increase announced by McDonald’s. Instead, higher pay in certain areas reflects local minimum wage laws and economic conditions. As more states raise their minimum wages, companies must adjust compensation accordingly, resulting in higher hourly pay for millions of workers.