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Automation Coming To Restaurants, But Not Because of Minimum Wage Hikes
dcblogs writes: McDonald's this week told financial analysts of its plans to install self-ordering kiosks and mobile ordering at its restaurants. This news prompted the Wall Street Journal to editorialize, in " Minimum Wage Backfire," that while it may be true for McDonald's to say that its tech plans will improve customer experience, the move is also "a convenient way...to justify a reduction in the chain's global workforce." Minimum wage increase advocates, the Journal argued, are speeding along an automation backlash. But banks have long relied on ATMs, and grocery stores, including Walmart, have deployed self-service checkouts. In contrast, McDonald's hasn't changed its basic system of taking orders since its founding in the 1950s, said Darren Tristano, executive vice president of Technomic, a research group focused on the restaurant industry. While mobile, kiosks and table ordering systems may help reduce labor costs, the automated self-serve technology is seen as an essential. It will take the stress out of ordering (lines) at fast food restaurants, and the wait for checks at more casual restaurants. It also helps with upselling and membership to loyalty programs. People who can order a drink refill off a tablet, instead of waving down waitstaff, may be more inclined to do so. Moreover, analysts say younger customers want self-service options.
"automation backlash" aka increased productivity is fantastic for the economy .
This goes further to demonstrate that automation will take over many menial jobs in my lifetime. This leaves us with a problem - what to do with all the unwanted and unskilled labor? Skilled worker's salaries have not kept up with productivity gains, as such there is no chance they could support service-based economy to offer unskilled workers a living wage.
Sadly, the likely outcome is drop in the quality of life for everyone involved.
Maybe the handwaviest hand wave in the history of Slashdot. The author of the introductory text claims McDonald's didn't make the change in response to increasing minimum wage levels, but what is their evidence for this? Citing, for example, banks and ATMs is hardly convincing, because bank tellers are not minimum wage employees.
Dog is my co-pilot.
Currently, the way it's implemented in european country, McD doesn't use it to reduce workforce (you're still required to walk up to a clerk to retrieve your order).
McD uses it to accelerate it service and increase the "number served": by the time you finish typing your order and have confirmed, the order is already broadcast to employee's screen. By the time you finish paying and walk to the queue, your order is already ready.
This cuts drastically the waiting time, and european McD's use to cram more customer served per minutes.
In the long run such stategies won't neceessarily reduce the workforce that much, but on the other hand, they will be used to propel "fast food" to a whole new definition of "fast".
On the other hand, that will probably be quite alienating for the workforce: no more breaks between customers, no more small talk while ordering. Work experience is going to be Charlie Chaplin's "modern times"-style: read the screen, pack the bag, hand over the bag, as fast as possible and repeat so the next customer doesn't need to wait.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
You are not misremembering, at one point WSJ published a lot of insightful business and economic commentary, and kept politics contained in the opinion pages. Now political narrative dominates all aspects and as a result business and economic aspect suffer.
I stopped reading it for this reason - profit has no ideology, moment you view data through a lens of politics is the moment you stop noticing opportunities.
I think this is still in the Journal's ballpark. What was not economical for McD's to do before (automate ordering) possibly becomes so when you're getting forced to pay someone $15/hr to stand at a counter and push buttons.
This is what the minimum wage hike advocates never seem to understand - when you raise the labor expense, many more options become economical to the employer.
(This post is not an opinion on whether the minimum wage should be raised or not, so don't flame me. It is simply an opinion on the possible consequences.)
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
Except the minimum wage hasn't actually increased anywhere but Seattle, Washington(and even there it's still being phased in), and more-over, one of the big principles that undercuts this argument is: "once you can automate away a job, is there any wage at which you wouldn't?"
Now, I'm not so thick-headed as to imagine that they wouldn't come up with something like this to help franchises with wage costs, but I'm also aware that this tech is coming to all sorts of places other than Seattle where the minimum wage actually went up.
The fact is that it's going to happen regardless of where minimum wages are set, or even if there are legally-mandated minimum wages (as opposed to the market-determined real minimum wages). Anyone who thinks most unskilled jobs aren't going away is crazy. The question is at what rate this change will occur, and it seems quite clear that high minimum wages will make more automation economical sooner, pushing the rate of change.
We're edging towards a major economic restructuring driven by widespread automation. We've had automation-driven restructurings in the past, and dealt with them, and this too will be handled. But when you're talking about widespread elimination of old jobs and creation of new jobs, speed kills. Retraining, and even just adjusting to the new reality, take time, and in the meantime millions upon millions of displaced workers are a huge drain on the economy, not to mention miserable.
I think it's pretty clear that high minimum wages are a forcing function for this transition, and I don't think it's something we really want to force. Ideally, it would be better to slow it down, at least in terms of the human cost, though the most obvious mechanisms for slowing it (labor subsidies) may also dangerously distort the economy.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
I actually do really like it, for exactly that use case. Considering that the process of settling the bill at a restaurant consists of:
1. Get the server to pay attention to you, and ask for the check
2. Have them deliver the check, and (as if by policy) say "take as much time as you like" and vanish
3. Have them notice that you've put down a card, and take it
4. Have them return with the receipt, you sign, and leave.
Usually steps 3-4 are near instance. However, steps 1-3 can take way too long sometimes.
(I wish doing 2 and 3 within the same minute was possible, but that's rare.)
Peter Schiff wrote a very eloquent piece explaining why minimim wage hurts the economy, job growth, and especially the young, unskilled and minorities. Here is part of it:
Low-skilled workers must compete for employers’ dollars with both skilled workers and capital. For example, if a skilled worker can do a job for $14 per hour that two unskilled workers can do for $6.50 per hour each, then it makes economic sense for the employer to go with the unskilled labor. Increase the minimum wage to $7.25 per hour and the unskilled workers are priced out of their jobs. This dynamic is precisely why labor unions are such big supporters of minimum wage laws. Even though none of their members earn the minimum wage, the law helps protect their members from having to compete with lower-skilled workers.
Employers also have the choice of whether to employ people or machines. For example, an employer can hire a receptionist or invest in an automated answering system. The next time you are screaming obscenities into the phone as you try to have a conversation with a computer, you know what to blame for your frustration.
There are numerous other examples of employers substituting capital for labor simply because the minimum wage has made low-skilled workers uncompetitive. For example, handcarts have replaced skycaps at airports. The main reason fast-food restaurants use paper plates and plastic utensils is to avoid having to hire dishwashers.
As a result, many low-skilled jobs that used to be the first rung on the employment ladder have been priced out of the market. Can you remember the last time an usher showed you to your seat in a dark movie theater? When was the last time someone other than the cashier not only bagged your groceries, but also loaded them into your car? By the way, it won’t be long before the cashiers themselves are priced out of the market, replaced by automated scanners, leaving you to bag your purchases with no help whatsoever.
The disappearance of these jobs has broader economic and societal consequences. First jobs are a means to improve skills so that low skilled workers can offer greater productivity to current or future employers. As their skills grow, so does their ability to earn higher wages. However, remove the bottom rung from the employment ladder and many never have a chance to climb it.
So the next time you are pumping your own gas in the rain, do not just think about the teenager who could have been pumping it for you, think about the auto mechanic he could have become – had the minimum wage not denied him a job. Many auto mechanics used to learn their trade while working as pump jockeys. Between fill-ups, checking tire pressure, and washing windows, they would spend a lot of time helping – and learning from – the mechanics.
You can read the entire thing here:
http://www.europac.net/comment...
Potentially wealthy my ass. Every working-class schmuck I meet in the US thinks they're potentially wealthy. It ain't gonna happen.
I write sci-fi for metalheads
You are not misremembering, at one point WSJ published a lot of insightful business and economic commentary, and kept politics contained in the opinion pages. Now political narrative dominates all aspects and as a result business and economic aspect suffer. I stopped reading it for this reason - profit has no ideology, moment you view data through a lens of politics is the moment you stop noticing opportunities.
I've read the WSJ daily for decades and have yet to detect a conservative editorial bias on the non-opinion pages. It's the only readable paper any more because it does actual reporting and isn't puffed up with fluff and torn-from-the-AP-feed canned drivel.
You do realize that people aren't, you know, actually, like, supposed to be able to support themselves with the lowest-paid jobs in the country? These are the kind of jobs that used to be done by kids still living at home, not those who expected to make a career and raise a family by saying 'Do you want fries with that?' a thousand times a day?
But with today's fucked economy, that's the only type of job many adults with kids, rent and car payments can find.
Our society has deep structural problems relating to automation that have been ignored for forty years and those chickens are coming home to roost. One of those major problems is that we've given preferential tax treatment to capital gains over income (labor).
We can either have egalitarian democratic society, or we can be like Mexico. I hope the walls on your gated community are high enough and you pay your private security contractors enough not to steal from you.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
I'll have to stand behind said idiot while they try to figure out what buttons to push
Kiosks are cheaper than employees and are "always on". They don't take breaks, they don't call in sick, and their shift doesn't end at 8pm. So instead of standing in line waiting for one human order taker, you will have a choice of six or eight kiosks. If you are there in the middle of the lunch hour rush, when all the kiosks are busy, then you can order on your cellphone. Even better, you can order, and pay, on your cell before you arrive, so your order is ready for pickup when you arrive.
After auto-ordering is established, the fast food joints can change their drive-through-window policy to be pre-order only. So you pre-order, and pre-pay, on your cell, get a beep when your order is ready, then pull up, grab your bag, and go. The transaction time will be reduced from minutes to seconds, saving people time, and most likely boosting business for the restaurants.
Comment removed based on user account deletion
I am going to give some examples and while they are not 100% percent verifiable, let' just roll with this and see what you think.
1. Presently my girlfriend is 30 years old and lives with her parents and has a child. She is making more than minimum wage, but can't afford to move out. Drives a hatchback that is more than ten years old. She has an iPhone, but she purchased it because it was free with a contract. This is a story that I can find several times over with various people I know that are making more than minimum wage.
2. If I remember correctly, SNAP doesn't allow for fast food. This might not apply, but in a great many cases, fast food joints are unable to participate in these programs.
3. Most of the people I know have jobs and fall under this category called the, "Working Poor." They work a full time job, but require government assistance because they are still below the poverty level. Please backup your claims though, because now I am curious where you are getting your facts from.
The lower income families spend more money because that's what they do. They are the majority of your consumers. Give them money to get by and we can actually start to cut aid to them. If we don't have to spend as many tax dollars for welfare programs, then we can start to lower taxes. You have a choice. Either take care of the poor by having them work for their income, or provide their income from taxes.
Australia currently has the highest minimum wage, but their unemployment rate is two tenths of a percent higher than ours. Up until very recently they maintained a lower unemployment rate than ours.
Thanks Obama?
Place something witty here