Free Markets, Free People

Former McDonald’s CEO goes one for two

Ed Rensi is the former CEO of McDonalds and he commented on the reality of a $15 minimum wage and how most businesses will handle it:

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.”

He continues, “It’s not just going to be in the fast food business. 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.”

That’s the one he got right.  Here’s the one he got wrong:

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.

Good grief, Mr. Rensi, why not let the market handle it?  You know, supply and demand?  What the heck is wrong with you?  You wouldn’t even be discussing this if government hadn’t intruded and decided unilaterally that you should pay your employees a certain amount of money for their labor.  It is because of government you’re even discussing automation above.  And now you think government – even state government (you know like California or New York?) – would be the solution?


And you were a CEO of a major corporation?



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5 Responses to Former McDonald’s CEO goes one for two

  • Pretty sure the wage categories is not unrelated to black market labor (from illegal immigrants). You can pay them less because, off the grid, they need less, and are in a way more desperate. Regardless for the same take home pay they cost the employer much less.

    Even if that’s not what he wants, he at least wants to exploit thing out of a person’s control, like age & years of job experience, to take advantage and undercut them. I know the McD’s around me fire 90% of their workers at least twice a year, I assume because their first 6 mo., their wages are slightly lower. Kind of like the Car insurance scam is if you let your current policy lapse, a new policy from someone else will cost you more than if you moved over while still covered. Taking advantage of your circumstantial desperation and not your actual merits.

  • Yeah, we need another opportunity for graft like a “student wage” like we need four more years of Obama.