‘Profit margins are tight and customers still love their value menus; the only way to maintain both is by using tablet-style ordering devices…’
(Joshua Paladino, Liberty Headlines) Ed Rensi, the former president and CEO of McDonald’s USA, warned labor unions about the unintended consequences of demanding higher wages, firing restrictions and scheduling rights.
Rensi, writing an op-ed for Fox News, questioned whether labor unions hurt their employees more than help them. He looked at the ongoing three-week strike of UAW autoworkers at General Motors, during which employees have to live on $250 a week.
While autoworkers stand on the picket lines in Detroit, UAW officials are caught using union money, which should be used to benefit workers, to “finance their lavish lifestyles instead.”
But what have these strikes gained for employees?
“Over the last four decades they’ve seen dozens of auto plants close, and tens of thousands of autoworkers lose their jobs, as the unions’ demands for high labor costs and byzantine work rules hobbled the company,” Rensi wrote.
Rensi does not mention that some of these demands could not be met because of the wage-suppressing effects of outsourcing and immigration.
Rensi said the Service Employees International Union has not helped its members either. SEIU has spent more than $100 million since 2012 in an effort to unionize the quick-service restaurant industry.
“Their demands include a $15 minimum wage, ‘fair’ scheduling, restrictive firing rules, and an easy pathway to get dues payments from hourly employees,” Rensi wrote.
While the SEIU has not unionized fast-food employees, their message has changed the fast-food industry.
“Rising labor costs on the state and local level have forced [fast-food] companies to embrace automated alternatives to customer service,” Rensi wrote. “Profit margins are tight and customers still love their value menus; the only way to maintain both is by using tablet-style ordering devices to reduce the number of employees on staff.”
He cited a study from the Mercatus Center at George Mason University, which found that higher minimum wages are the “predominant factor” in rising youth unemployment.
“I don’t oppose better pay and benefits for today’s workers. But the unions who represent them are often at odds with workers’ best interests,” Rensi wrote. “Rather than moving workers into the middle class, unrealistic workplace demands can block them out of it.”