What Is Ed Renesi's The Ugly Truth About A Minimum Wage

As fast food workers continue to clamor for a hike in wages to $15 dollars an hour. Ed Renesi, the former president and chief executive officer of McDonalds USA, argues in his Op-Ed article published on Forbes.com “The Ugly Truth About a Minimum Wage” that a $15 minimum wage will wipe “out thousands of entry-level opportunities for people.” Renesi begins his op-ed by building his credibility on the issue through his knowledge in insider information on the business practices of McDonalds USA and successfully employs strong emotional appeals to further convince his audience to see his side of the argument. Ed Renesi sets the state of his argument by talking about the Service Employees International Union, a union that has recently expanded

He argues that while his opposition claims “they’re making millions while millions can’t pay their bills, suggesting there’s plenty of profit left over in corporate coffers to fund a massive pay increase at the bottom.” While the truth, according to Renesi, is the opposite as “nearly 90% of McDonald's locations are independently owned by franchisees who aren’t making “millions” in profit.” Renesi, argues that franchisees keep “six cents of each sale dollar” after accounting for operating

Specifically, Renesi ‘breaks down the math’ by noting that a “typical franchise sells about $2.6 million worth of burgers, fries, and Happy Meals each year, leaving them with $156,000 in profit.” He argues that if a franchisee has 15 part-time employees on the schedule earning minimum wage, a “$15 hourly pay requirement eats up three-quarters of their profitability.” Renesi, notes that a “$15 minimum wage wipes out their entire profit.” He further argues that fast food customers are very sensitive to the price increase on menu items. Renesi also makes a strong logical reasoning that if employee wages are cutting into what is left of profit for franchisees - workers could be replaced by a self-service computer aided kiosk. He also notes that the self-serve kiosks are already in use in some European countries and that the company “ordered more than 7,000 of them (kiosks) to replace entry-level employees.” While the statistics provided by Renesi in his article might enhance his logical reasoning the statistics he incorporated are not sourced leaving the reader to do further research into the matter therefore somewhat weakening his