Former McDonald’s CEO Ed Rensi says the fight for a $15/hour wage will backfire on workers because companies will simply replace them with robots.
Andrew Pudzer, CEO of CKE Restaurants, which includes Hardee’s, Carl’s Jr., Green Burrito and Red Burrito, made similar statements about the fight for a living wage for workers.
“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 said during an interview on the FOX Business Network’s "Mornings with Maria." “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.”
The statement comes amid a simmering national debate across the country when human rights advocates are fighting to raise the minimum wage of a person to $15 per hour. Advocates believe such a move could help alleviate poverty but critics believe it would instead encourage companies to automate their processes, resulting in even less employment opportunities.
Rensi claims he saw some robotic arms at a National Restaurant Show on Monday and said if low-skilled employees insist on having increased income, employers will be left with no option but to replace them with more efficient, cost-effective robotic innovations.
“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,” said Rensi. “It’s just common sense. It’s going to happen whether you like it or not. And the more you push this it’s going to happen faster.”
Rensi also believes that the country should do away with a federally mandated minimum wage and should let the states decide the cap for their income, referring to the fact that states have different costs of living and any changes to the minimum wage might impact each differently.
His views echo a similar one by Donald Trump, who also added the competition between the states would yield better results. Yet Jake Sullivan, the top advisor for Hillary Clinton, refutes his statement, saying it would unleash “a race to the bottom.”
“If the federal minimum wage were to be eliminated, there would be a number of states in this country, where millions of workers live, where the minimum wage would drop immediately,” Sullivan said.
The current federal minimum wage is $7.25. California and New York became the first states to raise their minimum age to $15 on April 4. A multi-step model in Seattle that ensures the minimum wage will steadily rise to $15 by 2020 has also improved working conditions of some low-income earners.
The former exec also added that a nationwide hike in minimum wage would keep people “on the government dole” but, in reality, the current minimum wage is not enough by half and creates an even higher demand for government welfare.
McDonald’s workers are now preparing to protest for the right to unionize and $15/hour pay.