Former McDonald’s CEO Just Explained How a $15 Minimum Wage Would Blow Up in Workers’ Faces

Workers replaced by a screen won’t be better off.

Proponents of a federal $15 minimum wage like progressive Senator Bernie Sanders argue that it would lift millions of workers out of poverty. But the former CEO of McDonald’s just warned that artificially spiking the cost of labor could hasten the drive toward automation and instead leave many workers replaced with machines.

“They’re going to force the cost of labor up, which means it’s going to force management to find alternatives, which means they’re going to lose jobs,” Ed Rensi told Fox Business

The former executive said that while mandating higher wages might sound great at first glance, companies like McDonald’s would respond either by hiking prices or finding ways to cut costs, such as increased automation. 

Per Fox, Rensi argued that “consumers will ultimately end up carrying the costs associated with the wage hike, and that the push toward automation is aimed at maintaining the convenience and speed of fast food. He also warned that automation will allow ‘institutional big guys’ to take over the industry at the expense of small business.”

Indeed, economic research has shown that McDonald’s across the country have raised prices to offset nearly all the costs associated with past minimum wage hikes. Basically, average people were no better off. At some point, if they are unable to keep raising prices, stores will instead be incentivized to start aggressively pursuing automation and cutting current workers out of the picture.