McDonald's CEO Makes a Big Announcement About Wages

May 27th 2016

Alex Mierjeski

When it comes to raising wages for fast-food workers, CEOs have argued that higher pay will lead to human workers being replaced by robots.

But McDonald's CEO Steve Easterbrook isn't buying it.

As thousands of low-wage workers protested outside of McDonald's Corp.'s corporate headquarters on Thursday, Easterbrook refuted that argument to shareholders at the company's annual meeting.

"I don't see it being a risk to job elimination," Easterbrook said of higher wages, Reuters reported. "Ultimately we're in the service business. We will always have an important human element."


The argument goes that higher wages will stretch employer budgets thin, causing job cuts and making low-cost, reliable automation technology like ordering kiosks appealing. In a recent interview with Business Insider, Andy Puzder, CEO of Carl's Jr. and Hardee's, said he wouldn't mind the switch.

"They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case," Puzder said.

Fight for $15

It's not the first time Easterbrook questioned the claim that higher wages are bad for the bottom line. Earlier this month, he cited better wages and employee benefits as factors that contributed to positive sales growth for three straight quarters.

This week, thousands of McDonald's and other low-wage workers turned out to call for a $15 minimum wage and union rights. On Wednesday evening, about 1,000 low-wage workers and their supporters camped out in the rain at McDonald's Oak Brook, Illinois corporate headquarters, ahead of the company's annual shareholder meeting.

Angel Mitchell, a 26-year-old McDonald's employee, told ATTN: earlier this week that workers were "occupying their door steps so that they can't ignore us."

Fight for $15 occupiers

"Poverty wages — or McWages as we call them — are affecting a wide range of workers. We can't get things done and we're unhappy — our McJobs are costing us all," she added, at the time.

Last year, McDonald's bumped up wages to at least $1 above the local minimum wage for workers at U.S. company-owned stores. But the majority of McDonald's are franchise-owned, a protection which shields the company from worker complaints — and also lets franchise owners determine employee wages.

Fight for $15 protester

McDonald's has said it cannot influence wages at franchise-owned stores, but the issue is at the fore of a landmark case currently under examination by the National Labor Relations Board.

"At McDonald’s, we take seriously our role in helping strengthen communities. Every year, we and our franchisees separately employ hundreds of thousands of people, providing many with their very first job," said McDonald's spokeswomen Lisa McComb in a statement about the protests.