Appearing on Fox News, former McDonald’s CEO Ed Rensi told host Neil Cavuto that raising the minimum wage, as many fast food workers are demanding, would “absolutely” kill jobs and hurt businesses. Claiming that Obamacare is going to shutter 15 to 20 percent of all small businesses, he stated, “If they did this minimum wage thing I’m telling you there’d be another 15 to 20 percent [of small businesses] that are going to go away.” He added, “You can’t afford it.”
There is little evidence, however, that raising the minimum wage kills jobs. Many studies have shown that raising the wage doesn’t have a negative impact on job growth. In fact, it can actually help businesses by raising productivity, lowering turnover, and increasing demand for products from workers with more money in their pockets. An analysis of state minimum wage increases found that those with a raise had above average job growth.
There are also real-life examples of companies that manage to pay higher wages and stay in business. In the fast food sector, the In-N-Out burger chain starts employees at $10.50 an hour. At Dicks Drive-In in Seattle, workers start at $10 per hour. Moo Cluck Moo, a burger chain in Detroit, pays $12 an hour. In retail, Walmart competitor Costco pays $21.96 an hour on average, while Idaho-based WinCo pays more than $11 an hour with good benefits while beating Walmart prices.
The current CEO of McDonald’s has claimed that it has always paid above the minimum wage, but U.S. wage data suggests otherwise. Yet there are examples of the company paying much higher wages while making a profit — all in other countries.
Rensi also defended paying minimum wage by parroting the idea that these jobs are just the first rung on the career ladder. He told Cavuto that the minimum wage “was designed for entry level jobs that teach people soft skills. It was never meant to be a career, it was meant to be a career starter” that “people can grow into real careers.”
But a recent report shows that the reality is just the opposite. It found that there are very few rungs ahead of minimum wage fast food jobs: less than 9 percent of the industry’s employees are supervisors and a mere 2.2 percent hold managerial, professional, or technical jobs. The rest, nearly 90 percent, earn a median wage of $8.94 per hour. Meanwhile, these workers aren’t just teens earning a little extra cash. The majority are people well out of their teens and a third are even trying to support children on these low wages.
The low wages and paltry benefits in the fast food sector has led many of the workers who are struggling to get by to go on strike. Low-wage workers have walked off the job in nine cities, the latest of which were Kansas City and Flint, MI. They’re demanding a $15 minimum wage and the right to form unions.