August 17, 2015

Robotics Firms Will Massively Benefit From $15 Minimum Wage

The people ‘Fighting for $15’ minimum wage don’t seem to get that this is a reality.  Indeed machines could oust workers in fast food restaurants because they’ll be cheaper and more efficient than actual people.
As cities and states actually contemplate passing a mandated $15/hour wage for fast food workers, they never seem to think about the downfalls of doing this.
In Seattle some businesses have opted to close because they simply cannot afford the increase. In San Francisco, even those small business owners who supported the increase in minimum wage have realized what a huge mistake it was.

And now, once again the automation of fast food restaurants is being discussed and possibly move up faster. From the Washington Post:
“The problem with the ­minimum-wage offensive is that it throws the accounting of the restaurant industry totally upside down,” said Harold Miller, vice president of franchise development for Persona Pizzeria, who also consults for other chains. “My position is: Pay your people properly, keep them longer, treat them right, and robots are going to be helpful in doing that, because it will help the restaurateur survive.”
Many chains are already at work looking for ingenious ways to take humans out of the picture, threatening workers in an industry that employs 2.4 million wait staffers, nearly 3 million cooks and food preparers and many of the nation’s 3.3 million cashiers.
Labor isn’t the only ingredient that factors into the price of a Big Mac: There’s also real estate, which has been getting more expensive, especially in the hot urban markets where restaurants are seeking to locate. Wholesale food costs, meanwhile, have escalated 25 percent over the past five years.
The avalanche of rising costs is why franchisers are aggressively looking for technology that can allow them to produce more food faster with higher quality and lower waste. Dave Brewer is chief operating officer with Middleby Corp., which owns dozens of kitchen equipment brands, and is constantly developing new ways to optimize performance and minimize cost.
“The miracle is, the wage increase is driving the interest,” Brewer said. “But the innovation and the automation, they’re going after it even before the wages go up. Why wait?”

The payout for automated kiosks and cashiers is heavy up front but will be cheaper in the long run and far more efficient than the unskilled labor that is currently performing these tasks.
Higher skilled labor will replace these workers to fix and change the machines but those people would already be earning more than $15/hour.
Some businesses are either already putting this into place (you’ve probably seen some in airports across the country) and others are planning on rolling it out like Olive Garden:
The labor-saving technology that has so far been rolled out most extensively — kiosk and ­tablet-based ordering — could be used to replace cashiers and the part of the wait staff’s job that involves taking orders and bringing checks.
Olive Garden said earlier this year that it would roll out the Ziosk system at all its restaurants, which means that all a server has to do is bring out the food.

What the ‘Fight for $15’ crowd is really doing is creating a slew of workers who will be displaced because they lack the necessary skills to actually be ‘worth’ $15/hour.
Not only will this wreak havoc on entry-level jobs for unskilled workers but it will hurt the workers currently in these jobs as companies cut hours and look to replace human workers with robots or technology that is cheaper and more efficient.
People are willing to pay for good service at higher-end restaurants but they certainly don’t expect to pay outrageous prices for a hamburger or fries at a fast food joint.
These businesses must cut costs somehow and thanks to a ridiculous mandated increase in the minimum wage, the workers will be the ones to suffer.

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