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Fast-Food CEO Invests In Machines Because Regulation Makes Them Cheaper Than Employees (yahoo.com)
An anonymous reader writes: The CEO of Carl's Jr., Andy Puzder, has been inspired by the 100-percent automated restaurant, Eatsa, as he looks for ways to deal with rising minimum wages. "With government driving up the cost of labor, it's driving down the number of jobs," he says. "You're going to see automation not just in airports and grocery stores, but in restaurants." Puzder doesn't believe in [the progressive idea of] raising the minimum wage. "Does it really help if Sally makes $3 more an hour if Suzie has no job? If you're making labor more expensive, and automation less expensive -- this is not rocket science," says Puzder. What comes as a challenge is automating employee tasks. This is where he draws the line and doesn't think that it's likely any machine could perform such work. But for more rote tasks like grilling a burger or taking an order, technology may be even more precise than human employees. "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," says Puzder in regard to replacing employees with machines.
Hope those machines buy his crappy food...
Remember how they told us that there would be no IT jobs left in the US because everything can be done so much cheaper in India?
Now it's that there will be no burger flipping jobs left because machines can do it cheaper. Let's wait and see how these burgers taste and whether I don't like them over there at [other burger joint] better even if they cost 30 cents more but taste like a burger and not like the bag it came in.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It's inevitable less qualified humans will be replaced by machines. It's inevitable over time more qualified humans will be replaced. It's extremely short-sighted (or disingenuous) to blame government regulations for doing something that is inevitably going to happen just a few years down the line anyway. As machines catch up to and surpass humans in more areas the percentage of humans who cannot be profitably employedwill approach unity. In my opinion the reasons to reject these changes tend to be bad ones.
You have the traditionalists, who just don't want anything to change. You have the sour grape connoisseurs, who believe positive change is undesirable because they see it as unlikely. Then there's the worst of them, the people who believe experiencing unpleasantness like working is intrinsically valuable. It's happening. The list of things humans can do that robots and computers cannot do is shrinking... and that list never grows longer. It's time to look to a future free of involuntary employment. It's time to make it happen as soon as possible.
If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.
Puzder doesn't believe in [the progressive idea of] raising the minimum wage.
Square brackets are used to modify the original statement only when it would provide contextual accuracy, not when you want to add bias to a statement. If you add bias this way, I instantly think you're a moron, regardless of your views.
The big point being missed is "Who are you planning on selling your cheap to produce burgers to ?"
I'm confident you can replace my job with machines, most jobs with machines and I don't think CEO's will be last against the wall either. Problem being if you do that, well the machines won't be buying your shit food will they ?
A typical fast food restaurant is already full of machines that need to be cleaned, stocked and maintained. This one isn't going to be much worse. The ordering system is just a simple touchscreen, for instance. It only needs to be wiped off once in a while.
If Puzder is going to fire Suzie rather than give her a $3 raise, then his taxes are going to go up to pay for her social safety net costs. It's impossible to have a society where a large fraction of people can't find work that pays a living wage. Those people will vote (or act in other ways) to overturn the system that is making their lives impossible.
I'm always amazed that the rich think they can hide in their gated communities and enjoy the fruits of other people's labor.
"He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
I'm always amazed that the rich think they can hide in their gated communities and enjoy the fruits of other people's labor.
That shouldn't be amazing. No matter what happens in other businesses, or society as a whole, Puzder is still making the optimal choice for himself.
He's arguing against raising the minimum wage because it's pricing human employees out of the market. Okay, so what's the plan in 5 years when the machines cost half as much? Or 5 years after that, when the machines cost half as much again? Are we going to lower the minimum wage to one dollar an hour?
More than that, if minimum wage employees get pay cuts and job losses like he is threatening... who does he think will have the money to buy his robot-made burgers? Cutting the minimum wage means you spend less on payroll, but your customers are somebody else's employees and they got a pay cut too.
This is why basic income is inevitable. Paid for by the corporations through taxes because they put all of the people out of work. There will be no personal income to tax if people don't have jobs. The only thing left to tax will be the corporations.
And the corporations, while they might not paying taxes to give people a basic income will need to. For without the people getting that basic income there are no consumers to consume what the corporations are producing and so they will go out of business.
The corporations will leave and go somewhere else, like China and India you say? Of course they will and they will just do to China and India what they did wherever they moved from, putting everyone out of work and forcing the government to make them pay for a basic income.
What of the country that all the corporations left that now has an unemployed work force but no corporations to pay for their basic income? Probably there will be a new tax to "sellers" of goods and services, so the corporations will pay the tax to keep people in a basic income one way or another. But more likely, a new economy will rise up.
So yeah, keep up the good work you corporate bastards. Looking forward to sitting on my ass while you support me. Well, in fact, I won't be sitting on my ass, but I will be spending my days doing something *I* want to do instead of wasting away 1/3 of my life in your factories.
And unless you continue to support me in that endeavour, you will be unemployed (out of business) too.
Greed is awesome.
He's not arguing anything. He's making a threat - which means he doesn't have a plan, because if machines were cheaper he wouldn't need a jab at minimum wage. He wouldn't need anything - he'd just do it.
Your premise is that a social safety net must exist.
I'm always amazed by the consumer who thinks that he can demand production and enjoy the benefits of other people's capital.
It's impossible to have a society where a large fraction of people can't find work that pays a living wage. Those people will vote (or act in other ways) to overturn the system that is making their lives impossible.
With real wages having gone nowhere for decades, we're arguably well into that scenario now. How much longer do you think we've got ?
When the wealthy have a police state with killbots on their side, what chance do you think the people have ?
I'm always amazed by the consumer who thinks that he can demand production and enjoy the benefits of other people's capital.
I'm always amazed that people think their "capital" has any sort of meaning unless the mass of society can benefit from it. Guess what, the only thing preventing the masses from stringing you up and taking your capital is the basic social contract that allows you to get rich as long as standards for the masses don't fall too far. You violate that social contract no amount of funny money or gold bars or factories is going to save your head from getting blown off as the police officers and military you depend on to live find it expedient to slay you.
Monstar L
Actually you've got that backwards, fighting against minimum wage laws illistrates economic and historical ignorance at the highest level.
Historically they were associated in a huge increase in the middle class. What you're arguing for is the creation and maintenance of an underclass to keep the wealth centralised in the current upper classes.
But you said it best
Your superstitions need to die out, sadly this is taking a long time.
Your assumptions are based on conditions that dont exist in the real world because of a little economic principle called "externalities". Keynesian and Libertarian economists love to ignore externalities because they 1) Aren't immediately apparent on a balance sheet and 2) completely screw up their chosen economic dogma. OK, so lets allow businesses to decide what is the minimum wage, the first thing they're going to find out is that fewer people can afford to buy they're product. This alone will reduce the available workforce because unlike companies, workers can pick up and leave when they cant make a liveable wage. As a result, anyone with any skill, talent or worth will move to a place with wage laws so all that CEO Stingy-pants will be left with are the most uneducated employees, literally the people who cant get. a job anywhere else.
A good historical example was Henry Ford. Instead of paying the lowest wages possible, he paid the highest and what he saw was a huge uptick in sales because his own workers could now afford to buy his cars. It wasn't just Ford that benefited from this, his workers could now afford other luxuries like a refrigerator.
Calling someone a "hater" only means you can not rationally rebut their argument.
My wife's car was broken into several times when she lived in Antwerp for eight months, but never in years of living in Denver, Pittsburgh, Houston or Washington DC. Maybe Belgium hasn't worked out "social peace"?
I am all for automation: start with the CEO and the owners, replace them with voting systems.
Someone else will take his place.
Isn't that the argument that you libertarian fucks always like to use when arguing against minimum wage and the like?
Eat the rich.
Quite the opposite: Detroit is such a basket case precisely because most of its residents already receive a "basic income" from the government.
Yes, that is the future we face if we give government the power to hand out a "basic income", to control private weapons ownership, to restrict entry into markets and businesses, etc. And people like you are working hard to make it happen.
I don't know why more people don't own stock. I have accumulated enough over the years where I cheer this kind of cost cutting. Indeed, I insist upon it! It provides me, as you say, a basic income.
This has ahll been tried, repeatedly. You say "they can possibly", let's look at what people ACTUALLY DO.
> as the profit margin is higher than "the fair profit for money" (in Adam Smith's words), they can possibly reduce their margin and still stay in business
They "possibly could", I suppose. Here's what is in fact happening. Each paycheck, I have a certain amount set aside for retirement, and to buy a house again, because I'm trying to be a responsible adult. That money that is set aside is of course "capital". (it's worth recognizing that in the US, with our system of public companies, the word "capital" mostly means "retirement savings").
So anyway I have this retirement money, or capital, and I need to do something with it. I -could- put my money in a Detroit car company, who pays relatively high wages but makes no money. If I choose to do that, I can retire when I'm 85. Or I can put my savings into another car company which makes cars in Texas, Mexico, and other places with lower regulatory costs, and therefore makes money. If I do that, I can retire when I'm 65.
So retire at 85 via a Detroit company with Detroit costs, or retire at 65 via a multinational with Texas and Mexico costs. Which would YOU choose. Virtually nobody is choosing to put their savings (capital) into companies with high costs and low profits. A few choose their investments based on being a fan of this or that, but most people want to retire sooner rather than later, so their money goes to places that have lower costs.
China and India have had much lower costs than the east coast of the US does, so businesses operating in China and India (and creating jobs there) are the ones doing well. The jobs in Detroit are gone. They HAD very high benefits and wages due to unions and regulation there, and that's why they are gone.
Of course, that fact that legislating higher pay doesn't work is unacceptable to some people; their first instinct is to deny it, though of course it's fairly obvious. What about those poor assembly line workers, warehouse workers, etc.? We have to do something! I'd agree, somewhat. I'd say "we have to do something THAT WILL BE EFFECTIVE." All too often we think "we have to do something" and then politician X suggests plan Z. Well plan Z is something, and we have to do something, so we have to plan Z. Well, no, plan Z has been tried many times and it doesn't work. We need to do something that actually works.
The main thing that actually works is vocational training / education. I started to just write "education", but getting a bunch of people degrees in Russian Literature isn't all that effective; we can get better results from our limited resources with training in welding, IT fields, etc. If someone is 36 years old and they're worth the same wage as a 16 year old, if they haven't managed to improve their skills and knowledge in 20 years, that's something we need to look at.
We also have to recognize a very uncomfortable fact. Gas stations and fast food places around Texas are offering $10-12/hour to start, which, with the low cost of living in Texas, is a decent wage. That's just the starting wage, for teenagers with no experience, show up on time for a year and you start getting raises. Yet there are a bunch of people not working! There are even people getting fired from Taco Bell because they won't show up on time and when they do show up they're stoned. It's a lot harder to help those people. I'm not sure how to help people who won't show up, except I've done one thing that has helped in some cases. I've given them two choices - show up, sober, and get paid well, or don't get paid at all. They'd like to show up drunk or stoned, figuring they are then worth about $6/hour, but I don't give them that option. About half of them then decide they'd rather have a job where they show up on time, sober, for $10, then have no job and no money for beer. The other half - I don't know how to help them.
Honestly, the CEO sounds like a petulant child crying that the other kids are taking their turn. I think this is just a scare tactic, he doesn't have any real plans to automate anything. Fast food automation was tried before and found to be too expensive, way more than an additional $20 an hour total he would be paying his normal wage slaves.
In short, this is just the CEO trying to scare people into voting for Trump.
I read the internet for the articles.
That shouldn't be amazing. No matter what happens in other businesses, or society as a whole, Puzder is still making the optimal choice for himself.
For this moment, maybe.
So now that the optimum situation is to have no employees, we need a plan of what to do with the number one enemy of the corporate state, the human taker.
Do we line 'em up and shoot them?
Do we pay higher taxes to support them?
Then who on earth do we sell our stuff to?
Taxes are almost as unacceptable as employees, so I guess we start lining people up. Investor tip! Fertilizers will be a growth industry. There is an old adage about people eating their seed corn.
Modern corporate "no employees" outlook is like that, only they are purposely getting rid of customers.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
This is a simple problem really.
You work at Mcburgerbelldees and you want 15 dollars/hour cause minimum wage just isn't cutting it.
You're right, but the thing is, you should be working towards a better job, flipping burgers or dropping fries in hot oil isn't and shouldn't be a career goal, nor does it merit 15 dollars/hour.
Minimum wage jobs are there for supplemental income and those who are just starting work for the first time.
I understand, shit's expensive, I've been there and done that. Used to work in convenience for 6 years before I started work with a Fortune 500 company making great money for the area I live in, 7 years later and I've moved into the office as part of the management staff. It's not a hard concept to grasp, but if you're not willing to work hard, towards a goal that doesn't involve doing as little work as possible, you'll never get anywhere.
As an aside, if you go into any Wawa or Royal Farms in this area, they have already done away with the waiters, they have been replaced by an automated kiosk. And guess what, they're always to work on time, always do their job and never get the order wrong unless you entered it that way.
So what makes more sense to you? Paying a snotty over-privileged 20 something 15/hour, or buying a 500~ dollar kiosk that never complains? The decision seems cut and dry to me.
Have you ever fallen asleep at the keybhanusdiog?
So now that the optimum situation is to have no employees
It's the optimum for the business that Puzder is responsible for. Your questions are good questions, but they are questions for society as a whole, not questions for Mr. Puzder to answer. If society allows people to run businesses with no employees, and it makes sense from a business perspective to do so, you can't blame individual business owners for making that choice.
Companies hate their employees. Labor costs are a barrier to higher profits. Employees are treated as liabilities.
This entire thread is based on a false idea that if people are thrown out of minimum wage jobs that they'll be unemployed forever.
This has been proven countless times since the 1700's to be absolutely false.
Once a technological innovation disrupts employment - the loom, the cotton gin, the computer, the combine planter/harvester, the robot - those who were displaced from employment find new jobs in higher paying sectors, at least in the aggregate. How many file clerks do you know? Know anybody picking corn, wheat, or soybeans by hand? Yet unemployment is around 5%.
The people slinging burgers will find new work. They'll have to. New employment opportunities will open up; they always have.
And no other jobs come to fill their places?
By your logic, we'd be at 75% unemployment (figure pulled out of my ass, admittedly, but just making a point here...) right now with all the technological advances since the 1970s. What do you think happened to our economy to achieve our current 5% unemployment rate? Are all those file clerks and bookkeepers still out of work or did they find something else to do?
People made the same arguments you're making for every technological leap forward. The net result has always been people thrown out of low wage, miserable jobs have found higher wage, less miserable jobs, given enough time.
It's called Structural Unemployment. It is a problem for workers who are too old to retrain - think people in their upper 50's trying to sprint to retirement - but for the vast majority of the workforce, it's a net benefit in the long run at the cost of a little short term pain.
The only problem with this idea that the unemployed will find work is that the number of people required to design/operate/maintain technology is much smaller than the number of people required to do the work the technology replaces.
We've gone from 95% of people doing agricultural work to less than 5%. Yet people found new jobs: almost everyone did. Same thing with manufacturing. But somehow not with burger flipping jobs? Those are magic? Seems unlikely.
Socialism: a lie told by totalitarians and believed by fools.
You're an idiot. You're probably some suburbanite born with a silver spoon in his mouth just spouting liberal propaganda from NPR and other highly liberal sources.
I have actually "been there" and "done that".
Now I have an approach similar to the OP. I have tried to take advantage of what opportunities good timing has exposed me to. I have avoided the folly of buying into American consumerism too much.
People do have real choices and they do have self-determination despite what communist wannabes might want to tell you.
It's easier to tell yourself you aren't in control of your own destiny. It conveniently avoids facing up to your own failure and laziness.
A Pirate and a Puritan look the same on a balance sheet.
People have been saying we are about to enter that era for 150 years.
We didn't have cell phones in the 1700s.
There's population versus technology, there's people spending less on food and clothes while buying bigger houses, the increase in non-necessity expenditures as a percentage of income, and all kinds of other data showing we actually do increase the number of people in the economy.
You're right, though: The number of people needed to do a job doesn't increase. That's the point: technology *decreases* the number of people required to do a job, freeing their labor time up for other tasks. That's why we've moved people out of agriculture and manufacture and into construction, medicine, retail, and business services. Somebody has to sell those products from China; somebody has to handle the logistics, the distribution, the shipping; somebody has to drive the trucks; somebody has to run the involved IT systems.
Even after we've reduced the share of labor per product in *all* of these types of jobs, we create more jobs by buying more products. You buy 3 times as much shit, you need 3 times as much logistics. Maybe it takes 1/5 as much labor to provide those logistics, so you have 60% as many people doing that; the other 40% are running Spotify and Netflix.
We don't create higher-class jobs; we reduce costs and improve the standard-of-living of the lowest income earners. We may create more or fewer poor people; those poor people will be objectively wealthier than last generation's poor people, but they're still poor because literally everyone else has more than they do. Some of the replacement jobs are higher-income-class, some are lower-income-class, and we wind up with more things produced per wage-labor hour, more stuff per-capita, and more luxuries in the hands of everyone as their basic needs become cheaper.
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As well as making labor more productive, you get the double whammy of lower prices. As long as regulators stay out of it, that is.
And after the masses string up the producers for their wealth.
Nobody's talking about stringing up the producers for their wealth. They're talking about stringing up the parasites for their wealth. Let's face it, nobody is productive enough to become wealthy from their own productivity - even the best brain surgeons and rocket scientists are barely rich. Those that have become truly wealthy have done so through business - by exploiting the labor of others - or by exploiting markets - simply taking the wealth of others. These people don't make a net positive contribution to society, and yet they're the ones that amass all the wealth. It's the producers that are losing wealth, as the middle class is eroded, and wealth stratification continues to worsen.
If you disagree, can you explain to me how stringing up, say, the Walton family would meaningfully impact society? Would we be lost in a world incapable of conducting retail sales operations without the Waltons? Would the lack of their high-volume low-margin retail empire really result in a world where nobody produces anything, farmers stop farming, cats and dogs start living together? By what mechanism?
Chuuch. Preach. Tabernacle.
Or maybe they'll just shoot you and take your wallet. Desparate people are dangerous and social security nets keep the crime rate low.
"It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
You have failed to understand the entire argument as presented. Running a business with no employees inevitably results in a business with no customers (because people without incomes won't be customers)
No, it is you that have failed to understand my argument. The guy can run a business just fine serving food to people who work at other businesses. Now, you'll probably start yelling that "but, but, but, if every other business did the same thing, then there would be no customers left", to which I will respond that Mr Puzder has no responsibility for those other businesses, and his choices don't affect them. We can be sure that somebody will move to robots, and they'll gain a competitive advantage, either driving Mr Puzder to quit or to do the same thing.