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Former McDonald’s CEO: $15 minimum wage will drive use of more automation

Former McDonald’s CEO Ed Rensi says that fast food franchisees are already replacing workers with automated robots, and the push for a $15-an-hour minimum wage will only speed that process. Rensi’s comments came during a Tuesday interview with Fox Business News, where he argued that the country is in a “lot of trouble” and credited what he saw as a sputtering economy as driving the rise of presumptive GOP presidential nominee Donald Trump.

Rensi was in attendance at the National Restaurant Show, taking place this week in Chicago. Among some of the innovations there are automated systems, some of which cost little more than what a franchisee would need to pay an employee for one year of labor should the minimum wage go up to $15.

“I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry,” Rensi told Fox Business’ Maria Bartiromo. “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.”

Conservatives have long maintained that higher minimum wages will hurt small businesses. At the same time, about 3 million U.S. workers either make the minimum wage of $7.25 an hour or lower. Those making lower wages are typically in the food service industry and receive tips, and in such cases employers are exempt from having to pay them the federally mandated rate.

Rensi argues for allowing the states to decide on appropriate minimum wage levels, although he did seem to admit that in some regions — he mentions New York City in particular — the minimum wage might actually need to be higher than $15 an hour. The panel agreed with him, although one member pointed out that Trump himself has said the current levels are too low.

(Trump has also stated however that minimum wage levels should be left to the states.)

“Franchising is the best business model in the United States. It’s dependent on people that have low job skills that have to grow,” Rensi argued. “Well, if you can’t get people [at] 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.”