Former McDonald’s CEO Warns Robots Cost Less Than Paying a $15 Minimum Wage
Former McDonald’s President Ed Rensi warned Tuesday that replacing workers with robots is far less costly than hiring new employees at $15 an hour.
Democratic lawmakers and advocates from across the country have fought to raise the minimum wage to $15 an hour. Those in support believe the policy could help address poverty, but critics say it could also lead to less employment opportunities. Rensi noted it will be cheaper for many businesses to purchase a $35,000 robot instead of hiring a new employee at $15 an hour.
“If you look at the robotic devices that are coming into the restaurant industry — it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries,” Rensi told Fox Business. “It’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe.”
Rensi added he saw some of the robotic innovations firsthand Monday during the National Restaurant Show. Employers could be left with few options to overcome the added costs of labor if the minimum wage goes too high. Replacing low-skilled workers with computers and robots is one solution to be more cost efficient.
“It’s not just going to be in the fast food business,” Rensi continued. “Franchising is the best business model in the United States. It’s dependent on people that have low job skills that have to grow. Well if you can’t get people a reasonable wage, you’re going to get machines to do the work. It’s just common sense. It’s going to happen whether you like it or not.”
Rensi believes lawmakers should do away with a federal minimum wage and instead leave it to the states. Republican presidential candidate Donald Trump expressed similar support for a state-based minimum wage policy. States have different costs of living levels, meaning any national minimum wage will impact each differently.
“I think we ought to have a multi-faceted wage program in this country,” Rensi concluded. “If you’re a high school kid, you ought to have a student wage. If you’re an entry level worker you ought to have a separate wage. The states ought to manage this because they know more [about] what’s going on the ground than anybody in Washington D.C.”
The nonpartisan Congressional Budget Office (CBO) found any increase of the minimum wage could result in at least some job loss. New York and California both became the first states Apr. 4 to raise the minimum wages to $15 an hour. Advocates have also seen victories on the city level, starting with Seattle in June 2014.
The Fight for $15 has been at the forefront of the minimum wage push, utilizing media marketing campaigns and protests to garner support for the increase. The movement launched what it claimed was the biggest protest Apr. 14, which involved rallies in cities across the country.
Copyright 2016 The Daily Caller News Foundation