Former McDonald’s CEO Argues $15 Minimum Wage Would Reduce Job Opportunities

• June 1, 2016 12:56 pm


Former McDonald’s CEO Ed Rensi warned against raising the federal minimum wage to $15 an hour, arguing that the shift would hamper the entry-level job experience needed for career advancement.

In an op-ed published on Fox News Wednesday, Rensi said that the wage hike would force job creators to offset higher labor costs through price increases on consumers, staff cuts, or a transition to automation.

Rensi wrote:

Most restaurant businesses—including McDonald’s and Famous Dave’s of America—are run by individual franchisees who by and large operate independently of corporate headquarters. These franchises are faced with slim profit margins, with business expenses like staff and rent offsetting a large chunk of revenues from sales. As such, franchisees are ill-prepared to pay their employees more for the same work if they hope to keep hiring new people and expand their business. A $15 hourly wage would effectively make employees more expensive without increasing revenue, eating away at the profits job creators need to stay afloat.

McDonald’s has already installed self-service kiosks in roughly 600 U.S. locations to cut costs, he said, and the company is planning to place them in 400 more locations by the end of the year.

He argued that such a shift would most heavily impact inexperienced employees who most need entry-level career opportunities.

"The real tragedy here is that more machines mean fewer employees acquiring the tools they need to succeed," Rensi wrote. "Entry-level work at restaurant businesses is meant to teach once-inexperienced employees the skills they need to move up the career ladder."

The Fight for $15 campaign, which advocates for a $15-an-hour minimum wage, protested the McDonald’s shareholder meeting in Illinois last week demanding the fast-food company raise its base pay.

The protestors claimed that the pay raise was necessary for struggling families to make ends meet, but Rensi hit back and said the steep increase would instead be detrimental to upward mobility for entry-level employees.

Published under: Economy, Minimum Wage