Fast Food workers, don’t go banging a drum for $15 an hour. You might get replaced by a robot.

In the current debate over potentially increasing minimum wage, a number of fast food workers have recently hit the streets in several cities for one day strikes in the attempt to call attention to their plight.  Which is they don’t make enough money to make ends meet.  Many libertarians and conservatives have scoffed at these protesters and in many comment sections you can read the various “I’d fire ‘em”, “get back to work you lazy bum”, or the always effective “that’ll teach you for having six kids and not going to college” counter-arguments.  While these comments may have some validity, we shouldn’t lose sight of the fact that it is indeed hard to make ends meet working a minimum wage job.  Empathy can and does make you a better person.  However, this doesn’t mean we should compromise and agree that the minimum-wage should be increased.  It simply means your arguments must come from the heart, not from your angry place.

But I digress…….

 

There are libertarians out there that can articulate the economic/political consequences of an increased minimum wage much better than I, so I will let them.  You can find their articles and blogs.  Google can help you with that.  What I will touch on is another effect of increasing minimum wage for fast food workers.  They will be replaced by advancements in automation, or robots if you may.

 

Fast food restaurants are normally franchises.  Individually owned and operated.  McDonalds Inc. doesn’t pay the wages at your local McDonalds, most likely the franchisee (i.e. the owner) pays those wages.  In exchange for a franchise fee and usually higher start up costs, the franchise owner receives numerous benefits in the form of training, support, marketing, and specialized equipment.  Next time you’re in a local major fast food franchise take a look at the equipment and setup you see in the kitchen.  Now compare that to your local mom and pop burger joint, and you’ll know what I’m alluding to here.  This of course doesn’t mean mom and pops are inferior to major chains (I much prefer a burger at a mom and pop to a major chain taste wise).  just imagine which of the two could better handle a sudden rush of 100 guests.

 

The corporations behind fast food chains need franchise fees in order to be profitable.  Franchisees need a business model that can make their investment worthwhile as well.  If an increase in minimum wage is imposed on these two parties, they will seek the easiest path to reestablish their profits, which will be through improved automation and different business models that simply do not need as many or no human workers at all.

 

Take a look at a few videos here…………..

Automation in the fast food industry has traditionally rolled out at a leisurely pace and generally resulted in a better dining experience for the consumer and a safer working environment for the employee, with the loss of few jobs.  The emphasis of the automation was to increase efficiency and quality, not necessarily to replace human workers.  Giving the crew of 8 the ability to handle a lunch rush of a 100 guests an hour.

 

Attempts to increase minimum-wage will disrupt this model.  Look for an increase in automation at the expense of the number of workers need to fully staff a franchise.  You’ll go into your local McDonalds, there will be 4 people working total, surrounded by a myriad of new technology designed so that they indeed will be earning that coveted $15 an hour.  The other 4 former crew members, you guessed it, will join the ranks of the unemployed.  Maybe they could take part of their unemployment check and buy a vending machine pizza.

 

Comments

  1. That is certainly compassion and empathy right there. If minimum wage workers who cannot make ends meet do not stop demanding a better wage, threaten to replace them with robots like they will be, but not right away. Got to keep the costs low till the machines come in.

    The libertarian way might have been to let the free markets rule. Let people demand what they feel is their prerogative, and let the people they are dealing with respond. Supply and demand.

    Instead we have this Republican response. “STOP ASKING FOR HANDOUTS, YOU’RE LUCKY TO HAVE A JOB YOU BUM”

    Then, even though no wages are raised, but the technology gets better in a few years to get in the robots, you can switch to “SEE, IF YOU HAD NOT BEEN DRINKING LIBERAL KOOL-AID, YOU WOULD STILL HAVE A JOB”

    Seriously?

    1. The increase in automation in fast food service in the past was to increase the productivity of the worker, not to replace them. Its been that way for years, and if wages are left alone will continue to be that way.

      An increase in wages to $15 an hour will shift the focus of automation to replacement.

      Additionally, Mom and Pops will fall off the Earth. It takes 5 to 6 years for the automation available to chains to filter down to Mom and Pops, in that period many of them will close.

      1. The focus is always towards automation, at least it is for any business that is looking to improve its profitability. If a business is not doing that, you can rest assured that its competitors are. So yes, you will see Mom and Pops go out of business as they have been over time in face of larger, far better efficiencies-of-scale operations that big businesses usually are. At least for fast food.

        And if you want to look beyond fast food, when is the last time you bought, say, a DVD from a mom and pop store rather than from Amazon?

        So it is a given that McDonalds will be looking to automate its processes even if workers were paid today at $1 an hour. Why? Because if you can replace that worker with a faster and/or cheaper process, you’ll do it. If you do not, you are not working to maximize the profitability of the business.

        So no “The increase in automation in fast food service in the past was to increase the productivity of the worker, not to replace them” is simply not universally true. Yes, in some cases it is to improve the productivity of the worker, but not always. A local franchise sells, say, 2000 burgers a day. Making the worker more productive will get them to sell more burgers a day? Only in places that are awfully crowded and demand is way higher than supply, or if the automation also saves on costs. What happens when that is saturated? You would not try to make it more profitable?

        At any rate, my argument is left unaddressed. If libertarianism is about letting free markets dictate pricing and wages, then why is it the LP of OC is even commenting on this? Why not let workers (private, not government) demand more wages from the employer (private)? Two private parties negotiating, and if that results in one of them losing, then so be it. Free markets, remember?

        Heck, libertarians should have nothing to say in the matter. That is simply Republicans looking out for corporatism. They want to dissuade workers from asking for a living wage now so that they have time to replace them with robots — technology is not fast enough for it.

        1. 1) You can disagree with me if you like, automation in fast food was focused on increasing worker productivity, not replacing the worker. My point is that will change with a significant increase in minimum wage. That is my point, disagree if you like.

          2) Who buys DVDs? Duh.

          3) Unaddressed? The first comment you left was unclear.

          4) The workers are pandering primarily to political forces now for an increase in wages, since their employers will not provide one. Workers have failed to leverage their labor as it is easily replaced. While your free market argument is fundamentally correct, it does not apply given the current actions of the actors involved. There are politicians advocating $10, $15, and $17 an hour minimum wages for these workers. As it is a political issue involving force, a Libertarian can and should express their grievances.

          1. Please explain how, if you say my free markets argument is fundamentally correct it has an exception to a negotiation between two private parties. You say that workers are easily replaceable. I say let them find out. It is a political issue if the issue was about raising the state or federal minimum wage. It is not. It is private sector workers asking private sector employers to do so.

            Since when did it become libertarian to take sides in that debate.

            The fact that you would ask who buys DVDS indicates that you missed the concept of an analogy. But more importantly you make the same mistake of advocating who should refrain from buying what kind of goods. Would Blu Ray discs or computer memory sticks have been better for you to understand the concept of how mom and pop stores that used to sell these are fast being replaced by places like Amazon?

            Seriously, the LP of OC is being run over by rejects from the GOP

  2. I have to agree with Tom on this one; this debate is not between two private parties regarding wages for employment. The minimum wage is set by government (state & federal); that third party involvement negates a “free market”. The government has set up the rules employers have to follow to hire labor. These “activists” aren’t protesting against the fast food companies; they are protesting for the progressives (both Dems & GOP) in government who feel the only solution is another program.

    The impact of any increase in minimum wages is more than offset by the readjustment in prices which comes in the aftermath. Unless you are planning to couple your increase in wage with a freeze in prices these workers will remain exactly where they are now financially.

    1. The minimum wage is set by government (state & federal); that third party involvement negates a “free market”.

      But this is not about “increase in minimum wages”, Chad. Not as imposed by government.

      This is between two private parties, one of whom wants to negotiate for $15 an hour, and unless you are one of them, you are no libertarian, just a shill for the OC Republicans.

      This is what is wrong with our Libertarian party. It is overrun by rejects from the GOP who parrot Republican, pro-corporatism talking points.

Leave a Reply

%d bloggers like this: