Since President Barack Obama announced in his 2014 State of the Union address the need for a federally-mandated raise in the hourly minimum wage to $10.10, many have speculated that the president’s call may ultimately spur an increase in the use of automation to replace minimum-skill jobs. This line of thinking was fueled, in part, by Amazon.com founder Jeff Bezos saying before the speech that his company was working on a way for drones to deliver packages to customers.
“People don’t go into business to create jobs; they go into business to make money,” wrote Jonah Goldman for Omaha.com in opposition to the president’s push to raise the nation’s base pay. “Labor is a cost. The more expensive labor is, the more attractive nonhuman replacements for labor become. The minimum wage makes labor more expensive. Obama knows this, which is why he so often demonizes ATMs as job-killers.”
Those who buy into this line of thought point to Panera Bread’s recent announcement that it will be replacing some of its manned registers with self-help kiosks. Panera’s kiosks will enable customers to look at pictures of the prepared dishes, make their selections from mounted touchscreens and pay for their orders by credit or debit card without the help of a cashier. Customers would then take a pager — which would inform them when their food is ready — and be seated, with a server delivering orders as they are ready. Customers will also be able order tableside, using a smartphone or a tablet.
Panera CEO Ron Shaich, however, insists that this is not being done to reduce labor costs. “The dirty little secret in the food industry is one in seven orders is wrong. We’re one in ten, a little better than average,” said Shaich in an interview. “Half of those inaccuracies happen during order input.” Shaich insists that only one or two registers in each restaurant will be replaced by the kiosks and that the kiosks are meant to improve issues with checkout speed. They would also facilitate food customization to accommodate a growing population of picky eaters.
Complaints of poorly trained or rude fast food workers have proliferated the quick-service restaurant industry. According to a 2012 study for QSR Magazine, one in 10 fast food orders were found to be wrong. Burger King had an error rate of 17 percent, Wendy’s 11.1 percent and McDonald’s 9.1 percent. Such discrepancies have been attributed to workers goofing off and not taking their work seriously.
The move to place the customer in charge of their ordering is one that is gaining traction. Chili’s announced earlier last year the installation of tableside ordering screens in their restaurants, and Applebee’s recently announced a 100,000 tablet self-order conversion of its restaurants.
“Very clearly, our intention is not to replace servers, who provide a personal connection that is invaluable in our restaurants and to our ‘See You Tomorrow’ experience,” Applebee’s President Mike Archer told Forbes. “This is about building on to the experience for the guest, not saving on labor.”
Self-order kiosks are appearing more often and in more places — from supermarkets to airports to restaurants — but most experts agree that they are not a replacement for cheap labor. For example, Panera’s planned kiosk installation is slated to cost $42 million. With the cost of installation, servicing, cleaning and replacing should they break, the cost of these kiosks does not represent a significant savings for the chain. Additionally, serving and hospitality staff would still be needed to deliver the food, clean the restaurant and address technical issues.
While the current fear that the president’s proposed wage hike would immediately lead to automation of minimum-skilled jobs — as seen in a 2013 ad from the Employment Policies Institute that showed an industrial robot cooking, a demonstration later shown to be presented by the robot’s manufacturer under precise conditions that are incapable of being able to be reproduced in a production kitchen — may be overblown, the automation of minimum-skilled jobs is a concern. An Oxford University study published last year shows that servers, order clerks, cargo agents, fashion models and data entry keyers are all at risk of having their jobs eliminated by computerization within the next 20 years.