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25 May, 2016 16:19

Buying robots would be cheaper than hiring at $15 an hour – former McDonald’s CEO

Buying robots would be cheaper than hiring at $15 an hour – former McDonald’s CEO

A robotic revolution is set to happen in the fast food industry if a $15 minimum wage is put into place, according to a former McDonald’s CEO.

In a Tuesday interview on Fox Business Network’s ‘Mornings with Maria’, former McDonald’s CEO Ed Rensi warned that an increased minimum wage would foment massive job loss thanks to the relatively low cost of replacing workers with intelligent machines.

“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,” Rensi said.

Even without a $15 per hour law, Rensi said that he thinks that franchising-model businesses are moving toward automation, since they are dependent upon low-skill workers to grow.

“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,” the former McDonald’s chief said.

Many McDonald’s locations already have self-serve kiosks that replace cashiers by allowing customers to order and pay for their food without interacting with a human, and new technologies could automate the actual burger-making process in a similar way.

Rensi may be onto something. A study by London Business School management professor Lynda Gratton and futurologist David A. Smith predicts that such a massive shift could occur within the next 20 years, and its effects would be much further reaching than unskilled labor like fast food jobs.

“Advances in machine learning [mean] the task of interrogating large amounts of data is likely to become fully-automated, making jobs with any systematic component vulnerable,” Smith told the Daily Mirror, adding that jobs in law, medicine, architecture and communications are expected to be taken over by machines.

Gratton even suggested that that a third of jobs in Europe could be replaced by technology over the next two decades.

“As middle-skilled roles disappear, workers may find that the ‘rung’ above them no longer exists, and that the career ladder may begin to look more like a career web,” she told the Mirror.

One of McDonald’s competitor’s, Wendy’s, said this month that it was planning to install self-service kiosks at its restaurants. The company cited the rising cost of labor, especially following California’s and New York’s decisions to raise minimum wage to $15 per hour in the next several years, to explain their decision. The fight for $15 movement is strong in other states as well.

Chinese tech giant Foxconn, which manufactures electronics for Samsung and Apple, recently replaced 60,000 factory workers with robots.

"We are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees, and through training, also enable our employees to focus on higher value-added elements in the manufacturing process, such as research and development, process control and quality control,” Foxconn said in a statement to the BBC.