On Wednesday, McDonald's announced that it will increase wages and offer new benefits to its 90,000 employees in the 1,500 outlets in America. The unveiling acts as a solution to protests made by workers and also to lessen competitive pressure.

McDonald's said that the pay rise will be applicable from July 1 in which the average hourly pay rate of employees will increase to $1 above the required minimum wage. By the end of 2016, the company will increase the hourly pay rise more than $10.

The company also said that it is planning to come up with new vacation benefits for its employees. Those who will not be taking the vacation will receive the payment for the value of time. But a fast food workers organization is not happy and affirmed that the increase is not sufficient.

As per industry experts, the move will help 5% of McDonald's workers, as the offer is applicable on those stores that are operated by the company. It shall be noted that the franchise operated stores that make 90% of the McDonald's stores will not be receiving these benefits.

The announcement brought a 12% decline in the shares of the company. Also, the announcement has come at a time when other prominent national retailer has increased their workers minimum wages.

Christine Owens from National Employment Law Project was of the view, "Fast food workers are rightly demanding a greater share in the profits that McDonald's and other fast-food corporations are earning off their labor," then added, "They are fighting for wages that can lift them out of poverty and support their families".

CEO Steve Easterbrook said that the pay increase will motivate the workers. It is a known fact that motivated workforce results into a better customer service. He also thinks that the entire process will improve the McDonald's restaurant experience.