Edward Rensi, the former CEO of McDonald’s Corporation announced and speculated on Tuesday that, if the $15 minimum wage really does go into affect, the country will see massive unemployment and the emergence of robotic workers. It will be a simple matter of basic economics, Rensi says. Companies can place robots that will end up costing them less in labor costs.
“I guarantee you that if a $15 minimum wage goes across the country you’re going to see a job loss like you wouldn’t believe. It’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour to bag french fries.” Rensi said.
Rensi has seen the future when he attended the recent National Restaurant Show. He was amazed at the technology and robotics that has already made its way into the fast food and restaurant industry especially in China. He believes that if the $15 minimum wage is embraced, it will likely destroy a middle class that is already hanging by its proverbial fingernails.
Rensi is not the only one who see’s the movement. Wendy’s has already begun rolling out self service kiosks at their restaurants and is already working their due diligence to look for further ways to slash their labor costs. Rensi, who ran McDonald’s from 1991-1997, thinks there should be a more regional approach to the minimum wage. He believes that wages should be calculated to account for the cost of living in a particular city, town or region.
“We’ve got unemployment in the black community that is staggering,” Rensi said, “Young black men at over 50% unemployment and we’re talking about a $15 minimum wage? It’s nonsense. These are entry level jobs.”
The unions, of course, applaud the $15 minimum wage as a chance for workers to make a livable wage. What they fail to see is what history has always presented. If history is, indeed, any indicator, when wages go up, layoffs ensue in an effort to cut costs. Also, companies and corporations simply raise prices to offset the wage gains so that their profit margins stay secured while worker earning power remains the same or shrinks.
PHOTO CREDITS: Reuters