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Thursday, May 12, 2016

Fight For 15% Unemployment: Wendy's Moving To Self-Service Ordering Kiosks

by JASmius

The Big Labor bulldoze to jack up the minimum wage to economically absurd levels is certainly part of this decision, but not all of it:

Wendy's said that self-service ordering kiosks will be made available across its six-thousand-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.

It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.

McDonald’s has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

i.e. Labor without a surfeit of tattoos and bad attitudes.

It’s not surprising that some franchisees might face more of a labor-cost squeeze than company restaurants. All 258 Wendy’s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated. Likewise, about 75% of two-hundred-plus restaurants in New York are run by franchisees. New York’s fast-food industry wage rose to $10.50 in New York City and $9.75 in the rest of the State at the start of 2016, also on the way to $15.

Companies have to control their costs to stay in business because, to cite Wendy's example, consumers are, on balance, unlikely to take out a home equity loan to purchase a triple with cheese combo meal.  If any or all of the jurisdictionally relevant levels of government inflict a huge mandatory increase in their labor costs, companies are going to look for ways to reduce that labor cost by reducing their labor force, and automation is a ready and short-, or even medium-term cost-effective alternative.  And, apart from cost control, burger-flipping simply is not worth over thirty grand a year - that's why it's burger-flipping.

But as Leon Wolf observes today, in the big picture, the move towards automation is inevitable apart from the "Fight for $15," because it represents, pun intended, "progress":

On the whole, this is a net benefit for society. The invention of the automatic ditch digger means better ditches can be dug faster and cheaper, and isn’t it great that we don’t have to dig ditches in the hot sun every day?  But if you’re a person who’s never learned to do anything for a living but dig a ditch, it’s a problem.

The problem is only made worse by fundamentally dishonest politicians who are peddling false dreams to people who need to come to grips with economic reality. Donald Trump stands in front of huge rallies in West Virginia and promises laid off coal workers that he’s going to get them back to work again, but he can’t. Fracking has made natural gas cheap enough that coal simply can’t compete on price, so unless Trump plans to outlaw it and drive up energy costs, there simply aren’t enough people who want coal for that to happen. And even if they did, mountaintop removal processes have made it so much quicker (and less human labor intensive) to mine coal that there simply isn’t a massive demand for human coal miners anymore, even if the whole world ran on coal.

The "creative destruction" of capitalism sometimes destroys things we would prefer it left alone - like our jobs.  That might seem cruel or ironic, but it really isn't.  The freedom to achieve and attain whatever you can through your wit, skills, experience, and hard work also means the freedom to fail and starve through witlessness, ignorance, and sloth.  Human nature being what it is, people want all the gain and none of the pain, and when they experience any of the latter, they want the government to intervene to rig the "game" in their favor.  And since everybody doesn't have the same goals and objectives, and they're pretty much all at conflicting cross-purposes with one another, now you can see why we are suffocating beneath the federal leviathan that is crushing us, and why the country is shattering apart at the seams.  There's hardly anybody left in America today in either party who doesn't believe and insist that everybody else owes them a living and that they would have it if not for "them," and are convinced that by electing a Hillary or a Trump who promise to screw "them" using the power of the federal government, they can have it.

One more factor that proves how tiny a minority constitutional conservatism in this country really is.

At any rate, in lieu of a Rodhamoid or Trumpist police state banning any further technological advances, automation consuming entry-level jobs will continue.  It is inevitable, as I wrote about at considerable length here.

1 comment:

Flores Morris said...

Very nice article and thanks for the posting and sharing.

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