In the run-up to nationwide demonstrations for a $15 minimum wage, aka the Fight for $15, the former president and CEO of McDonald’s USA says “I told you so.”
Earlier this year, Ed Rensi warned that the $15 minimum wage would be self-defeating in that it would kill thousands of entry-level fast-food jobs when small-business employers implement self-service touchscreen kiosks to reduce headcount and payroll.
Although the federal minimum hourly wage is still $7.25, several states and municipalities have “supersized” it to $15 in their jurisdictions, which equals to about $31,000 for a full-time worker, although many don’t work full time.
As the Inquisitr recently noted, fast-food workers and others in the service economy who support the Fight for $15 rallied on November 29. According to CNN, cops arrested about 100 protesters around the county who were taking part in the demonstrations for a $15 minimum wage.
In a follow-up Op-Ed in Forbes, Rensi claimed that the automation scenario played as he expected, and he was by no means taking a victory lap by declaring in print that “I told you so.”
“It brings me no joy to write these words. The push for a $15 starter wage has negatively impacted the career prospects of employees who were just getting started in the workforce while extinguishing the businesses that employed them.
“Let’s start with automation. In 2013, when the Fight for $15 was still in its growth stage, I and others warned that union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real. Earlier this month, McDonald’s announced the nationwide roll-out of touchscreen self-service kiosks…Of course, not all businesses have the capital necessary to shift from full-service to self-service. And that brings me to my next correct prediction—that a $15 minimum wage would force many small businesses to lay off staff, seek less-costly locations, or close altogether.”
Rensi also observed that other fast-food and fast-causal chains are also implementing self-service kiosks and/or the equivalent, and that “the real faces of the Fight for $15 are the young people and small business owners who have had their futures compromised,” rather than the street protesters and the media bystanders.
Separately, Amazon just launched a grab-and-go grocery store in Seattle with no cashiers or checkout lines at all that keeps track of your purchases via an app and sensors. A rollout of up to 2,000 such Amazon Go stores may be on the horizon, the Wall Street Journal reported.
President-elect Donald Trump has said that he supports minimum wage reform with the addendum that a minimum wage hike should be left up to each state to decide rather than federally mandated. Indeed, in the November general election, four states voted to increase their minimum wage.
No one would dispute that hardworking individuals in all sectors of the economy deserve to make more money, and some unscrupulous employers may be taking advantage of the situation. The minimum wage also needs to be high enough to incentivize individuals to enter the workforce rather than rely on public assistance.
Regardless of whether or not you think the Fight for $15 is admirable, a government-imposed, one-size-fits-all, hourly minimum wage rate, whether set at $15, $10.10, or at another benchmark, was originally designed as an entry-level pay grade rather than an endpoint. It also doesn’t distinguish between robber barons and good-faith employers who are struggling to keep their doors open.
In the normal course of things, minimum wage employees — which generally applies to a younger cohort — pick up work experience, new skills, and get promoted to higher-paying positions or land at another company that offers better opportunities.
Do you support the Fight for $15? If so, does Ed Rensi’s prediction about employers reducing labor costs through automation technology have merit?
[Featured Image by AP]