Coalition of Franchisee Associations

February 22, 2019

The Robots Are Coming, The Robots Are Coming!

"Longer lines mean potential customers will look for another restaurant, he said."

If only McDonald's corporate leadership could understand this.

At this fast-food drive-through, the person taking your order might not be a person at all


Anonymous said...

McDonald’s employees who picketed for a better living wage (whatever that means) may come to regret that decision. According to a Redditor, a McDonald’s in Illinois replaced their cashiers with machines. The machines appear to be the cousins of the ones found in grocery stores, big box stores, and CVS that allow customers to complete transactions.
How cost effective is replacing an organic employee with a mechanized one? According to an economic blog, and unsurprisingly, the machines likely come out on top in terms of pricing:
• For a location open 24 hours: The cost of human cashiers, not counting benefits, $15/hour * 24 hours * 365 days/year = $131,400
• For a location open 6AM to Midnight: $15/hour * 18 hours * 365 = $98,550.
• For the machine to be cost effective, all it needs to do is cost less than $100,000 a year to buy and maintain.Who could’ve possibly seen this coming? Forbes. They predicted this exact scenario last July.
Doubling of labor costs will simply increase a fast food restaurant’s incentives to adopt technology like this. And if fast food wages doubled everywhere it would spur the development of these technologies even faster.This is all basic economics, really. As costs of labor increase the added cost must be offset. In order to satisfy operating costs, produce a product consumers want to purchase, and still turn a profit, it’s perfectly reasonable for a company like McDonald’s to look for cost-cutting alternatives. As Forbes pointed out, the added pressure to increase wages only serves to expedite technological solutions.

Anonymous said...

Id take a robot over a lazy, rude, shiftless and unreliable crew person demanding $15/hour EVERY TIME !

Anonymous said...

NYC Implemented Minimum Wage Hike For Fast Food Workers. Now They're Looking For Jobs.
Greatest plunge in restaurant jobs in roughly 20 years

By Hank Berrien
March 1, 2019
In July 2015, New York’s Fast Food Wage Board, appointed by New York governor Andrew Cuomo, agreed with the labor movement and recommended a $15 an hour minimum wage for fast food workers working for companies with at least 30 stores nationwide.

That plan looks like it was a disaster, because following the implementation of that recommendation, New York City showed the greatest plunge in restaurant jobs in almost 20 years.
The 2015 recommendation meant that wages among fast-food restaurant workers in New York City would rise to $15 an hour by December 2018. A survey published near the end of 2018 found “76.50% of full service restaurant respondents reduced employee hours, and 36.30% eliminated jobs in 2018 … 75% of limited service restaurant respondents report that they will reduce employee hours, and 53.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018 … When the tip wage increased 50% in 2015, and since doubled, annual employment growth dropped from 6.67% to less than 1% as of November 2018.”
In mid February, economist Mark Perry of the American Enterprise Institute wrote:
December 2018 restaurant jobs were down by almost 3,000 (and by 1.64%) from the previous December, and the 2.5% annual decline in March 2018 was the worst annual decline since the sharp collapse in restaurant jobs following 9/11 in 2001. As the chart shows, it usually takes an economic recession to cause year-over-year job losses at NYC’s full-service restaurants, so it’s likely that this is a “restaurant recession” tied to the annual series of minimum wage hikes that brought the city’s minimum wage to $15 an hour at the end of last year.

It's not just New York City; in August 2016, reports surfaced that the raise in the minimum wage had hurt employees in Seattle. The Washington Post wrote, “Although some workers are earning more, fewer of them have a job than would have without an increase. Those who do have a job are working fewer hours than they would have without the wage hike.”

Anonymous said...

While a push for higher wages for low-skill work has led some fast-food restaurants to begin installing kiosks to replace cashiers, another issue is causing teenagers to lose out on first-time jobs: A terrible work ethic.
Bloomberg reports that senior citizens are now taking jobs that traditionally went to teenagers — flipping burgers and waiting tables at dining chains and fast-food restaurants. Senior citizens are actually being recruited for these jobs because they’re more reliable than teenagers today.
“Restaurants are recruiting in senior centers and churches. They’re placing want ads on the website of AARP, an advocacy group for Americans over 50,” Bloomberg reported. “Recruiters say older workers have soft skills—a friendly demeanor, punctuality—that their younger cohorts sometimes lack.”