Former president and CEO of McDonald’s USA Ed Rensi has “a simple message” for the union-backed Fight for $15 wage “protest organizers and the reporters covering them: I told you so.”
“It brings me no joy to write these words,” Rensi continues in an op-ed for Forbes. “The push for a $15 starter wage has negatively impacted the career prospects of employees who were just getting started in the workforce while extinguishing the businesses that employed them. I wish it were not so. But it’s important to document these consequences, lest policymakers elsewhere decide that the $15 movement is worth embracing.”
Those consequences include a recent nationwide rollout of self-service kiosks which replaces cashiers with automated touchscreens that take customers’ orders.
“It’s not just McDonald’s that has embraced job-replacing technology,” Rensi states. “Numerous restaurant chains (both quick service and full service) have looked to computer tablets as a solution for rising labor costs that won’t adversely impact the customer’s experience.”
When the Fight for $15 was just getting its feet wet in 2013, Rensi said he issued a series of dire warnings to aggressive unions that workers will be replaced with machines if they continued to fight for a high minimum wage.
“At the time, labor groups accused business owners of crying wolf,” he said. “It turns out the wolf was real.”
There is another consequence that affects smaller businesses that can’t afford high-priced gadgets in their stores. Again, Rensi warned, as did others, that this would lead to layoffs and business closures. That scenario hasn’t played out much worse than it has in California:
They include a bookstore in Roseville, a pub in Fresno, restaurants and bakeries in San Francisco, a coffee shop in Berkeley, grocery stores in Oakland, a grill in Santa Clara, and apparel manufacturers through the state. In September of this year, nearly one-quarter of restaurant closures in the Bay Area cited labor costs as one of the reasons for shutting down operations. And just this past week, a California-based communications firm announced it was moving 75 call center jobs from San Diego to El Paso, citing the state’s rising minimum as the “deciding factor.”
But businesses in Washington, Colorado, Maine and Arizona are feeling the pinch after each stated voted for a $15 wage increase on Election Day:
In the immediate aftermath, family-owned restaurants, coffee shops and even childcare providers have struggled to absorb the coming cost increase—with parents paying the cost through steeper childcare bills, and employees paying the cost through reduced shift hours or none at all.
Who deserves the most blame, according to Rensi, is the labor unions who sat back and basked in the extra media coverage and fundraising dollars while ignoring the voices of everyone telling them a wage hike like this is unsustainable:
The out-of-state labor groups who funded these initiatives aren’t shedding tears over the consequences. Like their Soviet-era predecessors who foolishly thought they could centrally manage prices and business operations to fit an idealistic worldview, economic reality keeps ruining the model of all gain and no pain. This brings me to my last correct prediction, which is that the Fight for $15 was always more a creation of the left-wing Service Employees International Union (SEIU) rather than a legitimate grassroots effort. Reuters reported last year that, based on federal filings, the SEIU had spent anywhere from $24 million to $50 million on the its Fight for $15 campaign, and the number has surely increased since then.
This money has bought the union a lot of protesters and media coverage. You can expect more of it on November 29. But the real faces of the Fight for $15 are the young people and small business owners who have had their futures compromised. Those faces are not happy ones.
