Liberal cities such as Seattle and states like California have recently moved to implement minimum wages as high as $15 per hour. Those in favor of such mandatory wage hikes argue they are necessary to provide a sufficient “living” wage. Those opposed have warned that businesses would be forced to increase the prices consumers pay or to reduce labor costs.
It seems the other shoe has dropped. Investor’s Business Daily reported that to address these labor costs Wendy’s will roll-out self-service ordering kiosks starting in late 2016:
“Wendy’s said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages…
McDonalds 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 isn’t the only business moving towards greater automation. Business Insider reported earlier this year on a new restaurant chain, Eatsa, which represents a major shift in the industry with fully automated ordering for their concept of healthy quinoa bowls. Other established chains are taking notice:
Eatsa— and it’s given him some ideas on how to deal with rising minimum wages.The CEO of Carl’s Jr. and Hardee’s has visited the fully automated restaurant
“I want to try it,” CEO Andy Puzder told Business Insider of his automated restaurant plans. “We could have a restaurant that’s focused on all-natural products and is much like an Eatsa, where you order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person.”
Puzder’s interest in an employee-free restaurant, which he says would be possible only if the company found time as Hardee’s works on its northeastern expansion, has been driven by rising minimum wages across the US.
“With government driving up the cost of labor, it’s driving down the number of jobs,” he says. “You’re going to see automation not just in airports and grocery stores, but in restaurants.”
“This is the problem with Bernie Sanders, and Hillary Clinton, and progressives who push very hard to raise the minimum wage,” says Puzder. “Does it really help if Sally makes $3 more an hour if Suzie has no job?”
The movement of the restaurant industry towards automated could mean the elimination of many entry-level jobs, making life difficult for those lower on the employment ladder. As Puzder says, those supporting a higher minimum wage might want to reconsider their policy given its early results.
Read about the Wendy’s story at Investor’s Business Daily.