$15 minimum wage will lead to robots, says McDonald's ex-CEO. Will it?
The former chief executive spoke while 'Fight for $15' protesters marched in front of McDonald's headquarters outside of Chicago.
As hundreds of protesters descended on McDonald’s headquarters in Illinois to demand higher wages and the right to form a union, a former executive of the hamburger chain gave them a sobering warning: If the minimum wage is raised to $15 an hour, you will be replaced by robots.
“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,” said Ed Rensi, the former chief executive and president of McDonald’s USA, in an interview on Fox's “Mornings with Maria.”
“It’s going to cause a job loss across this country like you’re not going to believe,” said Mr. Rensi. Instead, he advocated for a “multi-faceted” wage program regulated at the state level, which he said could include separate pay scales for teens or entry-level employees.
Rensi’s warning reflects the increasing tension between fast-food chains and their employees in the “Fight for $15” movement, as well as fallout of raising the federal minimum wage.
Some, like Rensi, emphasize the need to find a slow, sustainable way to increase wages and working conditions for America’s lowest-paid workers.
Others consider his rhetoric a threat to force the rank and file back in line.
“If automation would save them money, they would have done it already,” says Terrence Wise, a McDonald’s and Burger King low-paid worker and a leader in “Fight for $15,” in a phone interview with The Christian Science Monitor.
Mr. Wise, of Kansas City, Mo., was outside McDonald’s headquarters in Oak Brook, Ill., while shareholders were scheduled to meet on the corporation’s campus.
Wise says he has visited McDonald’s restaurants in Paris and Brazil with self-ordering kiosks.
“Yet, they have the same amount of workers as in America,” he says.
Automation isn’t beyond the realm of possibility. For years, fast-food chains have tried to automate food delivery, says Lee Adler, a labor and civil rights expert who teaches at Cornell University, in an interview with the Monitor.
For example, Andy Pudzer, the chief executive of Carl's Jr., has expressed interest in an entirely robot-staffed restaurant, PC Magazine reported.
Pizza Hut Asia is already halfway there, with plans to bring Pepper, a robot that can interact with customers, into restaurants by the end of the year. In addition to taking a customer’s order, Pepper could recommend daily specials and give calorie counts or other nutritional information, reported the Monitor’s Madison Margolin.
But Professor Adler believes Rensi’s comments should be interpreted as a “veiled message,” he says.
“ 'You better get back in line and oppose this in spite of yourself. You’re going to hurt yourself if you seek so much more than you actually deserve,' ” deadpans Adler.
“Can they attempt to automate as extensively as robotizing? Yes. If they could pull it off, they will,” says Adler, adding, “it’s important to separate the reason they’re saying this right now, in this context.”
“Fight for $15” marched on McDonald’s campus outside of Chicago on Wednesday, forcing McDonald’s to close its headquarters the day before its annual meeting, Reuters reported. The union-led national movement, now heading into its fourth year, has organized protests across the world and driven the minimum wage up in cities and states across the country.
Now, it has set its sights on raising the federal minimum wage to $15.
“Critics say today’s gains are mortgaged to lower future employment, as it becomes more expensive to hire,” wrote the Monitor’s Simon Montlake earlier this month. “Raise the minimum wage too high and a career ladder falls away for young and low-skilled workers.”
Reni's proposed tiered models have already been explored by several states, including New York and Oregon.
Regardless of Rensi's actual intentions for warning of a robot takeover, Adler says he imagines McDonald's shareholders are looking out the "corporate glass" right now at "Fight for $15" protesters, as lawmakers across the country consider raising the minimum wage.
The call to improve pay and working conditions has grown too loud for executives to ignore, says Adler.
“All these different parts of society are saying, ‘You better do something about this. If you don’t, we will.' "