Democrats' minimum wage hikes will kill jobs, small businesses: Former McDonald's USA CEO
'It just isn't workable from an economic standpoint,' Ed Rensi argues
Democratic presidential candidate Tom Steyer's plan to raise the federal minimum wage to $22 per hour is "absurd," former McDonald's USA CEO Ed Rensi warned FOX Business' Dagen McDowell Monday.
"It will put small businesses out of business; it will be dilatory to job growth in every way possible," Rensi said on "Mornings with Maria."
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Rensi noted small businesses are the biggest ongoing generators of American jobs. Small businesses employ 47.3 percent of the private workforce in the U.S., according to 2019 U.S. Small Business Administration data.
Megan Johnson counts money from a sale at Chagrin Hardware in Chagrin Falls, Ohio. (AP Photo/Amy Sancetta, File)
Restaurants like McDonald's face labor costs of about 33 percent of its sales, which, according to Rensi, is very high. If the minimum wage increases to $22 per hour as Steyer is proposing, he said the costs of labor will increase 50 to 60 percent. This, Rensi insisted, will result in the price of a hamburger increasing from $4 to $9 or $10.
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"It just isn't workable from an economic standpoint," he said. "It's inflationary; it's a job killer, and it’s very depressing to small businesses."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 275.60 | -1.05 | -0.38% |
Rensi argued the minimum wage is not meant to be a living wage, maintaining it's supposed to be an entry-level wage for workers with little-to-no skills.
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"I think some of these politicians are out of their minds," Rensi declared. "You would think by now that they understand that the entry-level worker making minimum wage should progress through mentoring and training into other jobs."
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When asked about the declining participation in the federal food stamp program SNAP, Rensi expressed his hopefulness.
"Most people really would prefer to work for a living and earn the food opportunities that they have and to be able to enjoy the commerce of the United States like everyone else," he said.
He recalled growing up around the coal and steel industries in West Virginia and Ohio where people of "great pride and dignity" were forced by their situation onto welfare. He noted the psychological damage and hopelessness felt by people in such a position.