Would raising the US minimum wage to $15 an
hour initiate the robot uprising? According
to a former McDonald’s Executive the answer
is “affirmative.”
Ed Rensi, former President and CEO of McDonald’s
USA, recently said on Fox Business that if
the minimum wage in the US rose to $15 an
hour, it would make sense for fast food companies
to buy $35,000 robot arms and replace human
employees. Rensi went on to say that keeping
employee wages to a “reasonable amount”
would delay the robo apocalypse. His definition
of “reasonable” is keeping the minimum
wage at $7.25 an hour. So let’s do the math.
Let’s say the federal minimum wage goes
up to $15 an hour and you’re scheduled to
work a full 40 hours each week. That amounts
to $31,200 before taxes. Employers only have
to buy each robot arm once. They have to keep
paying employees every year. So a little after
a year, the investment would appear to make
sense. Even factoring in maintenance and repair,
an employer would probably see a return on
investment before a second year passes. At
the current minimum wage of $7.25 an hour,
an employee would earn $15,080 before taxes.
If the boss replaced that employee with a
robot, it would take about two and a half
years to see a return on investment. Actually,
it gets way more complicated than that. Many
minimum wage employees can only get part-time
hours, which saves employers on additional
costs. Also, a robot wouldn’t just replace
one employee -- it would replace all the part-time
workers for that particular position. By the
way, Ed Rensi started working for McDonald’s
way back in 1966. Assuming he made the minimum
wage at the time, he earned $1.25 an hour
working the grill. Adjusted for inflation,
that’s equal to $9.23 in today’s money.
Ahem. There’s a lot more to go into here.
For one thing, robots must prove to be at
least as efficient and reliable as humans
in kitchen jobs to be a viable option. For
another, numerous studies show the current
minimum wage in the US is unlivable. Then
there’s the fact that automation is inevitable
for many, if not all, jobs. In that future,
we’ll have to figure out how to separate
work from income. Otherwise, no one will be
able to afford the burgers all those robo
cooks will be flipping.
But that’s an awful lot to tackle in one
video. And so we leave you with this: would
a hike in the minimum wage really result in
catastrophe? Let us know your thoughts. And
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