Current, Former McDonald’s CEOs Squabble Over Automation
McDonald’s President Steve Easterbrook argued automation is unlikely days after the former president warned a $15 minimum wage could force the company to replace workers with robots.
Former McDonald’s President Ed Rensi warned Tuesday workers are likely to be replaced with cheaper computers and robots if the minimum wage goes up to $15 an hour. Easterbrook countered the claim at the company’s annual shareholder meeting in Illinois by noting automation would be limited.
“[We] will always have an important human element,” Easterbrook said Thursday, according to The Guardian. “If we were able to automate certain non-value-added processes in the restaurant, we would do that because that’s a smart thing to do. But then that gives us more opportunity to bring back that manpower to the front of the house where we can offer a better dining area experience.”
Some lawmakers and labor advocates have successfully made the $15 minimum wage a popular political issue in recent years. Advocates claim the policy could help address poverty while critics warn it could also lead to less employment opportunities. Businesses may be forced to reduce their workforce to overcome the added cost of labor.
“Frankly, technology is something that our customers are embracing,” Easterbrook also noted. “We want to adapt to that. It is not actually meant to be labor replacement. We can just reapportion that labor into that more service-oriented roles.”
Rensi sees the push to enact a $15 minimum wage as much more harmful. He saw some of the robotic innovations firsthand Monday during the National Restaurant Show. Robotic arms costing about $35,000 were doing many of the tasks low-skilled workers are currently doing.
“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,” Rensi told Fox Business. “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.”
Employers could be left with few options to overcome the added costs of labor if the minimum wage goes too high. Replacing low-skilled workers with computers and robots is one solution to be more cost efficient. Automation has already occurred in some McDonald’s and other fast-food restaurants along with retail stores.
“It’s not just going to be in the fast food business,” Rensi continued. “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.”
The Fight for $15 has been at the forefront of the minimum wage push, utilizing media marketing campaigns and protests to garner support for the increase. The movement has been protesting against the company outside its shareholder meeting since it started Wednesday. The company decided April, 2015, to raised wages to $10 an hour for corporate stores.
The nonpartisan Congressional Budget Office (CBO) found any increase of the minimum wage could result in at least some job loss. New York and California both became the first states Apr. 4 to raise the minimum wages to $15 an hour. Advocates have also seen victories on the city level, starting with Seattle in June 2014.
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