“Don’t cut off your nose to spite your face” is an adage your grandma used to tell you. It’s a simple thing that those people marching around in our streets today holding signs and “demanding” a $15 an hour minimum wage become law just cannot seem to grasp. Because they’ve been fed a steady diet of ‘everything’s free’ for so long, many have forgotten or were never taught basic economics. The number one expense of most businesses is labor and in a free market if you increase expenses, businesses make adjustments to compensate.
Meet “Flippy,” a robotic kitchen assistant that’s the creation of Miso Robotics, an engineering firm specializing in “adaptable robotics” for commercial kitchens. The goal is to develop technology that can handle hazardous, tedious and time-sensitive aspects of cooking, from flipping burgers to frying chicken, cutting vegetables or final plating, according to press materials.
CaliBurger, a California fast food chain recently announced that it plans to begin using Flippy at more than 50 of its locations by the end of 2019. The current minimum wage in California is $10.50/hour, last year the California legislature introduced and passed a law phasing in state-wide minimum wage increases that will ultimately reach $15.00. CaliBurger is far from alone in the quest for wage expense savings.
Dublin, Ohio-based Wendy’s has said it will have installed self-serve ordering kiosks in 1,000 of its restaurants by the end of this year. Panera Bread has said it plans to add touch-screen kiosks to all its restaurants within a few years. McDonald’s also aims to roll out kiosks where diners can customize their burgers at all its U.S. locations. One cafe in San Francisco serves coffee brewed up by a robotic barista.
With minimum wages continuing to rise, these kinds of self-serve machines and related technology are inevitable as businesses look for ways to cut labor costs.
“Lots of restaurants, not just fast-food chains, are really trying to mitigate the costs of higher wages,” said Lauren Hallow, concepts analyst at Technomic, a restaurant market research firm.
COO of Wendy’s, Robert Wright, told investors that the machines, along with other forays into automation, will help reduce labor costs, which rose 5 percent at the company last year as a number of states—including Alaska, California, and Massachusetts—raised their minimum wages. Replacing human labor with machines is logical, predictable and fast becoming a common response to raising wages by fast food executives.
Andy Puzder, head of Hardee’s and Carls Jr.’s parent company (and briefly President Trump’s nominee for Labor Secretary), said in a 2016 interview that higher minimum wages made restaurant automation more attractive, adding that robots are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”
After McDonalds announced a plan to roll out self-serve kiosks in its US stores, Bennigan’s CEO Paul Mangiamele said on Fox Business that “We have to address somehow the rising costs of operating in our businesses.”
When it comes to the $15 minimum wage demands another wise proverb your grandma used to use is also fitting, “Be careful what you ask for, you just might get it.”
[Note: This article was written by Derrick Wilburn]