McDonald’s Veteran CEO’s Weigh in on $15 Hourly Wage



McDonald's Veteran CEO's Weigh in on $15 Hourly Wage

Steve Easterbrook

U.S. restaurant operators would probably not replace workers with robots if they had to pay the $15 hourly wage demanded by protesters, McDonald’s Corp Chief Executive Officer Steve Easterbrook told shareholders at the company’s annual meeting on Thursday.

Outside the meeting at McDonald’s headquarters in Oak Brook, Illinois, about 1,000 fast-food workers and their supporters called for higher wages and benefits. The picketers are part of a national “Fight for $15” movement that, along with an improving job market, has spurred wage hikes at major employers such as Wal-Mart Stores Inc and McDonald’s, though not to the level demanded by protesters.

Current and former fast-food executives have said a $15 hourly wage would force restaurants to replace workers with kiosks, robotic french fry baggers, automatic pancake flippers and other technology.

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McDonald's Veteran CEO's Weigh in on $15 Hourly Wage

Ed Rensi

On Wednesday, Ed Rensi, former President and Chief Executive Officer of McDonald’s USA, said that a $15 minimum wage would wipe out thousands of entry-level opportunities as well as profits for some locations.

“Recouping those costs isn’t as simple as raising prices. If it were easy to add big price increases to a meal, it would have already been done without a wage hike to trigger it,” he said.  “In the real world, our industry customers are notoriously sensitive to price increases. (If you’re a McDonald’s regular, there’s a reason you gravitate towards an extra-value meal or the dollar menu.) Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee.”

“In higher-cost European countries, these kiosks are already the norm. In 2011, the company ordered more than 7,000 of them to replace entry-level employees. They’ve been tested successfully in a number of markets in the U.S., and now the company is even testing self-serve McCafe kiosks where a customer can prepare and customize their own coffee beverage.”

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