Former McDonalds CEO Says a $15 Minimum Wage Will Give Jobs to Robots

By Denisse Moreno
Denisse Moreno
Denisse Moreno
May 26, 2016 Updated: May 26, 2016

Former Mcdonald’s CEO Edward Rensi warns that raising the minimum wage to $15 an hour will pave the way for robots to take over jobs.

“I guarantee you if a $15 minimum wage goes across the country you’re going to see a job loss like you can’t believe,” Rensi told Fox Business on May 25.

Fast food workers have been strongly pushing for a minimum wage increase, but opponents say the result might be less jobs for humans.

“I was at the National Restaurant Show yesterday and 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—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,” said Rensi.

Robots have already been introduced in some restaurants.

Mastercard announced on May 24 that it will deploy Softbank Robotics’ humanoid robot “Pepper” in selected Pizza Hut establishments in Asia. Pepper will interact with customers, make recommendations, take orders, and accept payments through the application MasterPass.

In Shanghai, fast food chain KFC introduced Dumi, a robot that takes customer’s orders.

The former McDonald’s CEO says robots will be able to take over jobs in all kinds of industries.

“It’s not just going to be in the fast food business,”Rensi told Fox. “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. And the more you push this it’s going to happen faster.”

The Bureau of Labor Statistics (BLS) says 2.6 million workers in the United States earned wages at or below the federal minimum in 2015, and made up 3.3 percent of all hourly paid workers.

The federal minimum wage is $7.25, but 1.7 million people in America earn less that that.

Minimum wage workers tend to be young, according to the BLS. Workers under the age of 25 made up only one-fifth of employees paid hourly, however, they made up half of the number of people paid at or below the federal minimum wage. Among teenagers ages 16 to 19 paid by the hour, an estimated 11 percent of them earned the minimum wage or below.

Employees who make at or below the federal minimum wage work for the fast food industry, retail, and other sectors. 

Rensi suggested that states should decide what the minimum wage is by examining their region.

“I think we ought to have a multi-faceted wage program in this country. 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.,” he said.

Rensi says people living in communities that aren’t as expensive as New York City, for example, don’t need a minimum wage of $15 an hour.

“Maybe the wage ought to be higher in New York,” he said.

Some U.S. areas have already increased the minimum wage.

Fourteen cities, counties, and states approved a $15 minimum wage though local laws, executive orders, and other means in 2015, according to the campaign Raise the Minimum Wage. 

Denisse Moreno
Denisse Moreno