McDonald's isn't ready to swap workers for robots just yet. According to McDonald's CEO Steve Easterbrook, the fast-food chain won't replace workers with machines—even if restaurant operators have to pay the $15 hourly wage that protesters are demanding. "I don't see it being a risk to job elimination," Easterbrook said on Thursday at McDonald's annual meeting when asked if rising labor costs would force the chain to cut jobs, replacing workers with kiosks and "automatic pancake machines."
Instead, Easterbrook said, the company would look to automating food preparation, allowing more employees to work directly with guests and boosting customer service. "Ultimately we're in the service business, and we're competing with other opportunities for people to eat and drink out," says Easterbrook. "Frankly, we will always have an important human element."
The CEO's remarks come in response to many people—including a former McDonald's CEO—arguing that increasing minimum wage means the end of entry-level jobs at fast-food chains. "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," former McDonald's USA CEO Ed Rensi said in an interview on Tuesday on the Fox Business Network's Mornings with Maria. "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're not going to believe." Rensi served as McDonald's USA's president and chief executive from 1991 to 1997, and has spoken out extensively against increasing the minimum wage.
"I can assure you that a $15 minimum wage won't spell the end of the brand," Rensi wrote of McDonald's in Forbes in April. "However it will mean wiping out thousands of entry-level opportunities for people without many other options." Rensi isn't alone in this belief. "With government driving up the cost of labor, it's driving down the number of jobs," Andy Puzder, CEO of Carl's Jr. and Hardee's, told Business Insider. "You're going to see automation not just in airports and grocery stores, but in restaurants."
However, Easterbrook insists that, even as McDonald's explores automation, workers do not need to be concerned about losing their jobs if minimum wages increase. So far, his track record at McDonald's backs his argument. In the past year, McDonald's increased investment in employee wages and benefits has already had a significant impact on customer service—one of the most problematic parts of McDonald's business. According to Easterbrook, customer satisfaction scores were up 6 percent in the first quarter, compared to the same period last year.
Automation is an increasingly important aspect of the restaurant industry. However, if Easterbrook is correct, the rise of robots doesn't mean the end of fast-food jobs. It simply means business can become more efficient, as employees are more fully dedicated to improving customers' experiences—not just flipping burgers.