Former McDonald’s CEO Credits His Success On Lower Wages
Former McDonald’s President Ed Rensi warned in an opinion piece Wednesday that a $15 minimum wage would destroy the very opportunities that made him successful.
Rensi earned only 85 cents an hour when he joined McDonald’s in 1966 as a part-time manager trainee. His duties included manning the grill and packaging menu items. He was promoted to restaurant manager within a year, and by 1984 became the president for the entire company. Rensi notes younger workers today will likely be robbed of the same opportunities because of the $15 minimum wage.
“If McDonald’s had been inundated with burdensome wage mandates in my youth, I might not have even been given the opportunity to get my foot in the door,” Rensi wrote in an opinion piece for Fox News. “That is now a grim reality for entry-level employees in places like California and New York—where job creators are forced to bear a higher entry-level wage.”
The $15 minimum wage has become more popular in recent years. The Fight for $15 movement has been at the forefront of the policy push by organizing protests and media campaigns — including a protest May 25 to coincide with McDonald’s annual shareholders’ meeting. Thousands of protesters were estimated to be in attendance.
“The chance at upward mobility is the enduring value of entry-level opportunity,” Rensi continued. “Over four million U.S. workers are employed at ‘limited service’ restaurants such as McDonald’s and Famous Dave’s. Even more are yearning for their first taste of the professional world.”
McDonald’s countered the protests by noting it already raised its own minimum wage to $10 an hour. National Center Free Enterprise Project Director Justin Danhof argues the decision only served to embolden movement leaders. Danhof attended the shareholder meeting to warn company executives against giving into their demands.
“This was of course to appease the $15 an hour activist crowd. Well did it work, of course not,” Danhof told The Daily Caller News Foundation. “The point of our shareholder proposal was to really highlight the fact that when you show the activists you’re willing meet some of their demands, they’re going to want all their demands met. Now you’re a bigger target then you were before.”
The Fight for $15 movement didn’t letup when McDonald’s increased its own minimum wage. Nevertheless the internal increase didn’t reach the mark they wanted and only impacted corporate-owned stores. Franchises consists of many businesses that contract with a large corporation so the increase didn’t impact every McDonald’s store.
“When they defend themselves, if and when they do, they’re defending much more than them,” Danhof continued. “They’re defending the market, they’re defending common sense and that’s why we go to them because they are a leader in the industry and they need to do more with that leadership position.”
Danhof said that by emboldening the protesters, it could hurt those companies less capable of overcoming the minimum wage. Employers could be left with few options to overcome the added cost of labor if the minimum wage goes too high. Rensi warned May 24 that replacing low-skilled workers with computers and robots is one method employers are already utilizing.
McDonald’s President Steve Easterbrook argued against the automation claims. He noted at the shareholder meeting in May that vast automation is unlikely — this came just days after the former president warned against a $15 minimum wage. He believes it will instead allow the company to focus on customer service by freeing up kitchen operations.
The National Bureau of Economic Research and The Heritage Foundation determined the impact of a higher minimum wage is especially bad for young and low-skilled workers. The White House Council of Economic Advisers warned in a report Feb. 22 that low-skilled workers are the most at risk of being replaced by computers.
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