On February 28, 2017 Matt Agorist writes on Activist Post:
For the last several years, the Free Thought Project has been predicting what will happen as government continued to arbitrarily fix wages across the United States. As politicians deceive their constituents into thinking financial success can come through an act of legislation, employers will find a way to offset this cost. It will either come through higher prices or, in this most recent Wendy’s case — robots.
To offset the costs of being forced to pay employees $15 an hour, Bob Wright, Wendy’s chief operating officer told investors last week Wendy’s has found a solution. In the past two years, Wright noted, Wendy’s has figured out how to eliminate 31 hours of labor per week from its restaurants and is now working to use technology, such as kiosks, to increase efficiency.
The automated kiosks serve two purposes: they give younger customers an ordering experience that they prefer, and they reduce labor costs.
“There is a huge amount of pull from (franchisees) in order to get them,” David Trimm, Wendy’s chief information officer, said last week during the company’s investors’ day.
“With the demand we are seeing … we can absolutely see our way to having 1,000 or more restaurants live with kiosks by the end of the year.”
The spike in demand stems from restaurant owners who want to maintain low prices while sustaining profitability.
According to Dispatch.com:
“A typical store would get three kiosks for about $15,000. Trimm estimated the payback on those machines would be less than two years, thanks to labor savings and increased sales. Customers still could order at the counter.
“Kiosks are where the industry is headed, but Wendy’s is ahead of the curve, said Darren Tristano, vice president with Technomic, a food-service research and consulting firm.”
“They are looking to improve their automation and their labor costs, and this is a good way to do it,” Tristano said. “They are also trying to enhance the customer experience. Younger customers prefer to use a kiosk.”
While Wendy’s is ahead of the curve as far as outsourcing labor to robots goes, other fast food restaurants are not far behind.
Last month, the Free Thought Project reported on McDonald’s latest attempt to stave off minimum wage hikes. However, unlike Wendy’s kiosks that simply take your order, the McDonald’s machines do it all — including spitting out a piping hot, 563 calorie, Big Mac.
While automation in the labor market is inevitable as technology increases, laws that dictate minimum wages only serve to speed up this automation. Sadly, many people will read this article and immediately assume that it’s some fascist right wing rant that ignores the plight of the working class. However, that assessment couldn’t be further from the truth.
Raising the minimum wage does nothing to protect the working class. In fact, as we see with these Wendy’s robots, a mandatory minimum wage destroys the working class.
As Nobelist Milton Friedman correctly quipped, “A minimum wage law is, in reality, a law that makes it illegal for an employer to hire a person with limited skills.”
If the economic effects of a minimum wage aren’t convincing enough, perhaps consider the racist background of such laws. As Andrew Syrios points out, most Americans have no clue about the racist intentions and subsequent effects of the original minimum wage.
When Apartheid was collapsing in South Africa, the economist Walter Williams did a study of South African labor markets and found that many white unions were seeking to increase the minimum wage. He quotes one such union leader as saying “… I support the rate for the job (minimum wages) as the second best way of protecting white artisans.” By pricing out less educated black laborers with a minimum wage, white unions were able to insulate themselves from competition.
Indeed, the Davis-Bacon Act, which demands that private employers pay “prevailing wages” for any government contracts, was explicitly passed as a Jim Crow law in order to protect white jobs from cheaper black competitors. And while the minimum wage is supported with much more pleasant rhetoric these days, the effects on black employment, particularly black teenage employment, have been devastating. As Thomas Sowell observes,
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In 1948 … the unemployment rate among black 16-year-olds and 17-year-olds was 9.4 percent, slightly lower than that for white kids the same ages, which was 10.2 percent. Over the decades since then, we have gotten used to unemployment rates among black teenagers being over 30 percent, 40 percent or in some years even 50 percent.
It’s hard to imagine that black unemployment was actually less than that of whites. But that is the effect minimum wage laws can have.
Ending poverty and giving people additional income are praiseworthy goals, but there are no free lunches in this world. And trying to force prosperity through a minimum wage simply creates a whole host of negative and unintended consequences especially for those who are the most vulnerable.
http://www.activistpost.com/2017/02/begins-wendys-installs-robots-1000-stores-counter-minimum-wage.html
http://www.businessinsider.com/wendys-workers-will-lose-jobs-to-robots-2016-5
This is yet another recent article that looks at a future where there will be hordes of citizens of zero economic value as tectonic shifts in the technologies of production destroy jobs and devalue the worth of labor. That is, unless the system can be reformed to empower EVERY citizen to acquire OWNERSHIP in the wealth-creating, income-producing capital assets resulting from technological invention and innovation.
Using common sense, if raising the minimum wage will not kill jobs then why not raise the minimum wage to $25.00 or $50.00 or $100.00 per hour? Of course there are consequences that either are reflected in job elimination or increased prices. Virtually never are the OWNERS of corporations willing reduce profits. If wage levels were not a factor there would be no reason for ANY company to exit production in the United States and move production to foreign lands with significantly less labor costs. Also, there is the impact on pricing levels, as any increases in the cost of production or service always results in pricing increases.
If this were not the case, then no companies would be compelled to seek other more cost-efficient means of production or to move production to foreign countries whose workers are paid far less than Americans. Increasingly, companies are seeking more efficient and less long term costs that non-human technology can deliver to reduce their operating costs, provide higher build quality, automate service, and maximize profits for their OWNERS. As is virtually always the case, the OWNERS of companies do not want to reduce profits.
What the proponents of raising the minimum wage fundamentally are addressing is that low-paid American workers need to earn more income.
Rather than focus on Job Creation, Job Retraining, and a redistributed Minimum Guaranteed Income that holds back technological invention and innovation, our economic policies should focus on wealth-creating, income-producing capital Ownership Creation.
Given that there is no question that robotic technology will continue to expand the productivity and in large measure destroy jobs and devalue the value of human labor, the question that SHOULD be urgently addressed is WHO SHOULD OWN THE FUTURE TECHNOLOGY ECONOMY? Will ownership continue to concentrate among the 1 percent wealthy ownership class who now OWNS America, or will we reform the system to provide equal opportunity for EVERY child, woman, and man to acquire personal OWNERSHIP in FUTURE non-human capital assets paid for with the FUTURE earnings of the investments in our technological future?
