One of McDonald's former CEOs hinted higher minimum wages may push the fast-food giant towards increased automation. This prediction was made amid petitions from employees to raise minimum wage in the U.S. to at least $15 an hour.
Ed Rensi's statement raised alarms in the industry. In a Fox Business report, he elaborated on McDonald's USA's solutions to compensate for the wage increase, if it pushes through:
"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."
According to the Guardian, Steve Easterbrook, McDonald's current CEO, was quick to assure that Rensi's premise is just an option being considered. Easterbrook did confirm automation may change the nature of jobs in McDonald's restaurants. In a speech at the company's annual shareholders' meeting, he asserts automation does not necessarily translate to job elimination.
Easterbrook noted that even if the company decides to automate non-value-added processes in restaurants, these are considered as the smart and only practical alternative. The decision does not reduce the need for manpower, but reallocates it to the frontlines to offer customers an improved dining experience.
Mounting protest against McDonald's current minimum wage forced the company to close Headquarters Wednesday, a day before the annual shareholders' meeting. According to a Fortune report, the strike is seen as part of a general movement to raise wages in response to an improved economy, with Walmart previously giving in to the pressure.
Easterbrook is credited for the company's improving sales. He was successful with the turnaround plan implemented since he started in January. In contrast to the notable decline in McDonald's sales, US stores are reporting strong figures over the past three quarters.
