Nov 8, 2011
by Jeff Randall, reprinted from a November 6, 2011 telegraph.co.uk article
America must cut taxes and reduce government spending in order to kick-start an economic recovery, Jim Skinner, the chief executive of McDonald’s, has warned.
“The question is, how can we get the ox out of the ditch?” Mr Skinner said. “In order to create jobs in America, you’re going to have to cut taxes… particularly in the business community.
“We pay some of the highest [corporate] taxes around the world. There needs to be some levelling.”
Asked about federal borrowing, he said: “It’s not a good story… the government has to spend less. We have to grow the economy, grow GDP… and you have to be able to do it in an organic way and not through borrowings and increasing debt.”
McDonald’s army of blue-collar customers need more clarity on core issues, such as healthcare, he said. “Until all of that is all defined and certain… we’re going to continue to have a fragile environment for consumer confidence.”
Skinner’s intervention will be seized upon by President Obama’s opponents amid a fierce debate in Washington over the country’s deteriorating finances and high unemployment. As Democrats and Republicans fire up their 2012 election campaigns, the focus is on the “9pc nightmare”, with both the US budget deficit and jobless total at that level.
Federal government debt has climbed to $15 trillion (£9.4 trillion), about the same as annual GDP. Worse still, America’s credit rating was recently downgraded by Standard & Poor’s.
As the leader of a remarkable turnaround at McDonald’s, Skinner’s comments will resonate across the country. His company is one of only a few big US employers still hiring in significant numbers, with more than 500,000 staff on its domestic payroll.
McDonald’s has just delivered 100 consecutive months of same-store sales growth. It is ranked number one in the Dow Jones Industrial Average for total shareholder return over the past five years, with the share price rising from $12 in 2003 to $93 today.
Skinner joined the company as a trainee store manager 40 years ago and was made chief executive in 2004.