- Restaurants could hike prices or cut
jobs in response to higher wages, a formerMcDonald's CEO said. - Ed Rensi $4 that fast-food chains turn to automation as it's cheaper than workers.
- McDonald's, for instance, is testing $4 to automate drive-thru orders.
The push for a $15 federal minimum wage could cause fast-food chains to raise prices or slash jobs by turning to automation instead, a former McDonald's CEO said.
McDonald's last month announced it was $4 at corporate-owned stores across the US amid the current $4, and said that it was expected average hourly wages across the US to reach $15 by 2024.
Former McDonald's CEO Ed Rensi $4 that the chain would either lift prices, or turn to automation software - and ultimately cut jobs.
Read more: $4
Rensi said that unions were "going to force the cost of labor up, which means it's going to force management to find alternatives, which means they're going to lose jobs."
"Technology is always cheaper than people," he added.
$4 in 10 of its Chicago drive-thrus so it could automate orders. The fast-food chains plans to roll out the software, which is around 85% accurate, at other restaurants in the future, but current CEO Chris Kempczinski warned that this would be a slow process.
Other chains are also automating their drive-thrus and dining rooms. $4 is adding conveyor belts that deliver orders to customers' cars, while $4 is switching to digital menu boards for both drive-thru and dine-in orders.
Fast food could get more expensive
$4 are already hitting the hospitality industry in response to the $4 and supply chain problems, and $4 told Insider that it could cause them to increase Big Mac prices.
Rensi warned that even higher prices could come if restaurants raised wages.
"You got a choice, you go broke by raising prices or you go broke by losing money because you can't raise prices," he told Fox Business.
$4 have all lifted prices in the past to match wage increases, while $4 said that a 10% increase in wages would force it to increase menu prices by 2% to 3%.