September 21, 2023

Epic Law

The Law Folks

Fast Food Restaurants, Minimum Wage And The Department of Labor

Politics sure are interesting and the 2016 Presidential Election was certainly able to make the grade. Now that Donald Trump kicked Hillary Clinton’s political rear-end we see he’s busy filling up his Presidential Cabinet with corporate business people, who he believes will ‘Make America Great Again’ and they just might. His pick for the Department of Labor secretary is Andrew Puzder, CEO of CKE Restaurants (parent company to Hardee’s and Carl’s Jr.) and that makes a huge statement about minimum wage laws. It also sends a big message to labor unions in the US – namely, no more obstructionism or BS.

Minimum Wage at $15.00 would be unsustainable for most small businesses and franchising companies, besides that it isn’t viable for human vs. robotic labor. If $15/hr. becomes the new norm, then businesses will rapidly employ robots to do many of those jobs at the bottom of the pay scale. That includes fast-food restaurants, agricultural labor, and car washes (something I know a bit about).

There was an interesting article in The Post – A Conservative Perspective titled; “McDonald’s: Robots Waiting in the Wings, If Minimum Wage is Increased,” on the 30th of May 2016, by Kerry Lear, a Guest Writer

The article stated; “The restaurant industry is the second largest in the country. In 2013, 3,653,168 were employed in fast food alone. The profit margin for restaurants is roughly 5-6%. Most operators spend 33% of their revenue on employee salaries and wages. With that being said, it’s not surprising that restaurant brands are gravitating to more cost-effective labor. Wendy’s will be installing more than 6,000 kiosks in their US stores by the end of the year and the chain Panera Bread already have these self-serve kiosks available in their stores,” and “I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry – 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 are not going to believe,” said former McDonald’s (MCD) USA CEO Ed Rensi during an interview on the FOX Business Network’s Mornings with Maria.”

Let’s face it, many of us hit the grocery store now and use the self-checkout system instead of getting in line for a cashier. Likewise we often hit the ATM rather than waiting for a bank teller. Soon, consumers will opt for the lower prices without the labor, and business owners will make more money and have less hassle, fewer lawsuits, and more profits. Dear Minimum Wage Debaters, beware of your unintended consequences.