McDonald’s former CEO, Ed Rensi, spoke to Forbes to give his take on the “fight for 15” movement that has been sweeping the nation.
Democrats and labor unions have been pushing for a higher minimum wage claiming that nobody can survive on a minimum wage paycheck. Rensi drops some real truth bombs in his interview and gives liberals a lot to think about.
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Rensi says, “a $15 minimum wage…will mean wiping out thousands of entry-level opportunities for people without many other options.”
Many companies agree with him, stating that if $15 an hour was implemented nationwide, companies that are trying to stay afloat would have to cut employees and entry-level positions.
Rensi explained, “The $15 minimum wage demand, which translates to $30,000 a year for a full-time employee, is built upon a fundamental misunderstanding of a restaurant business such as McDonald’s”
“In truth, nearly 90% of McDonald’s locations are independently-owned by franchisees who aren’t making “millions” in profit. Rather, they keep roughly six cents of each sales dollar after paying for food, staff costs, rent and other expenses.”
He did the math and proves that the higher minimum wage leaves employees in a bad spot: “A typical franchisee sells about $2.6 million worth of burgers, fries, shakes and Happy Meals each year, leaving them with $156,000 in profit. If that franchisee has 15 part-time employees on staff earning minimum wage, a $15 hourly pay requirement eats up three-quarters of their profitability. (In reality, the costs will be much higher, as the company will have to fund raises further up the pay scale.) For some locations, a $15 minimum wage wipes out their entire profit.”
Rensi isn’t alone in his stance against higher wages for entry level positions in minimum wage jobs.
The CEO of Hardee’s and Carl’s Jr. told Business Insider that he would strongly consider moving away from a manual labor route as it has become too expensive to maintain especially now with the push to increase the minimum wage and move towards opening automated restaurants due to the cost of hiring.
Perhaps $15 an hour isn’t such a great deal for workers after all.