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Robotics United States

Former McDonald's USA CEO: $35K Robots Cheaper Than Hiring at $15 Per Hour (foxbusiness.com) 1023

An anonymous reader shares an article on Fox Business: As fast-food workers across the country vie for $15 per hour wages, many business owners have already begun to take humans out of the picture. "I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry -- it's cheaper to buy a $35,000 robotic arm than it is to hire an employee who's inefficient making $15 an hour (warning: autoplaying video) bagging French fries -- it's nonsense and it's very destructive and it's inflationary and it's going to cause a job loss across this country like you're not going to believe," said former McDonald's USA CEO Ed Rensi during an interview on the FOX Business Network's Mornings with Maria. According to the Bureau of Labor Statistics, 1.3 million people earned the current minimum wage of $7.25 per hour with about 1.7 million having wages below the federal minimum in 2014. These three million workers combined made up 3.9 percent of all hourly paid workers.
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Former McDonald's USA CEO: $35K Robots Cheaper Than Hiring at $15 Per Hour

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  • by mal808 ( 4546893 ) on Wednesday May 25, 2016 @04:12PM (#52181401)
    I, for one, welcome our new French-fry bagging robot overlords
  • If not now... (Score:5, Interesting)

    by Memophage ( 88273 ) on Wednesday May 25, 2016 @04:14PM (#52181429)

    And in six months buying a $25,000 robot will be cheaper than paying an employee $12/hr...
    And in a year buying a $15,000 robot will be cheaper than paying an employee $9/hr...

    They're going to replace employees with robots anyhow, I don't buy that increasing the minimum wage to whatever has anything to do with it.

    • Hopefully some of those ex-employees go to school, learn to build, program, maintain, and recycle the robots. Most of those jobs should pay better than $15/hr.

      As for the rest, they can spend their time lobbying for UBI.

    • Re:If not now... (Score:5, Insightful)

      by Andy Dodd ( 701 ) <atd7@nOspaM.cornell.edu> on Wednesday May 25, 2016 @04:24PM (#52181581) Homepage

      Yup. This isn't really a valid argument against increasing the minimum wage.

      At worst, it merely hastens the inevitable by a few years, but this is going to happen.

      This is relevant to the current election cycle for multiple reasons - free trade agreements are a major source of contention, and Trump talks about bringing manufacturing jobs back to the US - the problem is, as the recent massive Foxconn layoffs proved, the majority of those jobs are NEVER coming back no matter what you do, unless you enact a New Jersey-style law against automation. (New Jersey requires all gas stations to be full-service, you cannot pump your own gas. One of the reasons for this rather unique law is to create jobs.)

      • Re:If not now... (Score:5, Interesting)

        by lorinc ( 2470890 ) on Wednesday May 25, 2016 @05:07PM (#52182129) Homepage Journal

        Yup. This isn't really a valid argument against increasing the minimum wage.

        At worst, it merely hastens the inevitable by a few years, but this is going to happen.

        This is relevant to the current election cycle for multiple reasons - free trade agreements are a major source of contention, and Trump talks about bringing manufacturing jobs back to the US - the problem is, as the recent massive Foxconn layoffs proved, the majority of those jobs are NEVER coming back no matter what you do, unless you enact a New Jersey-style law against automation. (New Jersey requires all gas stations to be full-service, you cannot pump your own gas. One of the reasons for this rather unique law is to create jobs.)

        But then you won't be able to compete with countries that do not enforce anti-automation laws.

        I think the game is already over. A significant fraction of the population is already useless to the economy, and in 30 year it will be the vast majority. Let's face it, for the past 40k years, we built our societies based on the value of human labour. Today, human labour is worth almost nothing. It's decreasing so fast, we will see it reaching 0 in our lifetime.

        Where do we go from there? Do we fight barbarian style to survive while the 0.1% enjoy the robotic enabled leisure society utopia? It seems so inevitable, it's extremely sad. Look at what happening right now in France: it's obvious all these guys will be replaced by cheaper and more docile robots in less than a generation, what will they do when that happens? Riots, civil war.

        The sad part is, while a few will be happy, the vast majority will not, whereas it could have been to other way around thanks to technology if the right political decisions were taken in the 70s.

      • Re:If not now... (Score:5, Insightful)

        by bluefoxlucid ( 723572 ) on Wednesday May 25, 2016 @05:07PM (#52182145) Homepage Journal

        Yup. This isn't really a valid argument against increasing the minimum wage.

        At worst, it merely hastens the inevitable by a few years, but this is going to happen.

        I addressed this [slashdot.org]. You repeat a line that comes from the thinking that jobs go away forever and no new jobs come. Circa 1790, 90% of American workers were farmers; today that's 2%, and a total of 11% of the workforce (including the farmers themselves) provides all the supporting infrastructure (energy, machines, pesticides, fertilizer, shipping, retail, marketing) to supply our food.

        It's not "Hastening"; it's "Compacting." You're creating a situation where people become unemployed at a higher rate--more jobs lost per month--and replacement jobs come at a lower rate. Instead of shaking a little as we push up to 6% unemployment and then come back down to 5% over 5-10 years, we spike up to 30% unemployment over 2-3 years and then require some 70 years to recover--if our economy doesn't fucking collapse first.

        You will incur enough injuries and blood loss in your life that, were I to take all that blood from your body today, you would die immediately.

      • by geek ( 5680 )

        Yup. This isn't really a valid argument against increasing the minimum wage.

        At worst, it merely hastens the inevitable by a few years, but this is going to happen.

        This is relevant to the current election cycle for multiple reasons - free trade agreements are a major source of contention, and Trump talks about bringing manufacturing jobs back to the US - the problem is, as the recent massive Foxconn layoffs proved, the majority of those jobs are NEVER coming back no matter what you do, unless you enact a New Jersey-style law against automation. (New Jersey requires all gas stations to be full-service, you cannot pump your own gas. One of the reasons for this rather unique law is to create jobs.)

        It's not unique. Oregon does this too.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      This assumes that the Robot can clean itself daily, clean the fryier, and replace the oil.
      And a robot in a hot oil and salt environment will be low maintenance.

    • But who will build the robot? And at what time the robot will build others themselves?
    • Re:If not now... (Score:5, Interesting)

      by boristdog ( 133725 ) on Wednesday May 25, 2016 @04:31PM (#52181673)

      And someone on Slashdot will make a 3-D printed, Arduino-controlled version for $250 that also checks the fry temperature and saltiness, and counts each fry for maximum efficiency.

      Then someone else makes a 3-D printed, Arduino-controlled restaurant that takes raw potatoes, flour, and meat in big hoppers. It creates a burger and fries in a few minutes and is entirely controlled by a smartphone. And the whole thing fits in the space of a standard minivan. Cost? $8500.

      Now McDonalds is out of business because any fool can buy one and put it on a corner.

      BFD.

    • Re:If not now... (Score:5, Interesting)

      by bluefoxlucid ( 723572 ) on Wednesday May 25, 2016 @04:36PM (#52181741) Homepage Journal

      They're going to replace employees with robots anyhow, I don't buy that increasing the minimum wage to whatever has anything to do with it.

      Businesses have risk appetite and risk tolerance. Risk appetite is how much money they want to throw in a hole for a likely conversion to more money; risk tolerance is the point at which they will not throw more money into the hole because the return--whether or not it's coming--is sinking the ship too hard, and they're no longer interested in trying to squeeze out more promised droplets of gold.

      Because of risk appetite, different businesses will implement labor-reducing changes at different times. Sure, you have an $8.25/hr employee now, and the machine costs $8/hr; but next year the machine should compare to a $7.25/hr employee, and in three years it should compare to a $5.50/hr employee. It seems to me that, over the ten-year period, you will come out with a higher profit if you wait three years before deploying expensive machines. These are $35,000 machines replacing $16,500 employees, so you need a little over 2 years to get a break-even ROI (replace benefits with maintenance).

      To some businesses, switching onto machines right away seems like a good idea. Poor foresight I guess. Other businesses will vary between how they roll out--how long to delay, how fast to carry out the roll-out, etc. That means moving everyone out of their jobs and getting machines in here could take a decade or more if wages are competitive with machines and we believe machines will get cheaper. The risk of moving onto machines isn't offset by the 25 cents savings, and the potential return for paying that 25 cents for the next few years is that you turn it into a 4 dollar savings instead.

      This breaks when you suddenly make labor expensive.

      Now instead of $8.25/hr vs $8/hr, you're doing $15/hr vs $8/hr. In one year, avoiding the 25 cent savings means $500 per employee per year; but at $15/hr, you're losing $7,000 per employee per year for not going in right now. That's going to hit risk tolerances a lot faster, and jobs are going away much more rapidly in those conditions.

      It's even worse if machines are *more* expensive than people: you get the price increase that comes with, say, $11/hr (machine) labor, but you fire a bunch of $8.25/hr human labor. Normally, we replace a high-labor process with a lower-labor one and make cost savings, leading to a reduction of prices, leaving more money in consumer pockets, allowing more purchasing [wordpress.com], creating new jobs to make the new stuff we're buying. If the machines are more expensive than wage-workers before the wage bump, then costs go *up*, and consumer ability to buy goes *down*: rather than reacting to the reduction of jobs by creating new jobs, the consumer base reacts to the increase in cost by not being able to financially support the wages of *even* *more* *jobs*.

      In 1790, 90% of Americans laborers (in a ~58% labor force) were farmers; we've replaced most of them with machines, and they now make up 2% of the labor force, and about 11% of consumer spending in total goes toward food to cover those farmers, the people building and maintaining farm equipment, logistics and sales moving that kind of thing, chemical companies making fertilizers and pesticides, and oil mining and refining to get the fuel for energy to drive all this. That means 18% of the labor involved in making food is on the farm, and 82% is in supporting infrastructure. You'll notice we don't have an 82% unemployment rate today; and automated fast food won't destroy our job market unless the method by which we transition is damaging--which this particular method *is*.

      • On target (Score:4, Interesting)

        by Anonymous Coward on Wednesday May 25, 2016 @05:44PM (#52182537)

        In the 1950s, Henry Ford II, the CEO of Ford, and Walter Reuther, the head of the United Auto Workers union, were touring a new engine plant in Cleveland. Ford gestured to a fleet of machines and said, “Walter, how are you going to get these robots to pay union dues?” The union boss famously replied: “Henry, how are you going to get them to buy your cars?”

    • by WheezyJoe ( 1168567 ) <fegg@@@excite...com> on Wednesday May 25, 2016 @05:07PM (#52182137)

      The only news here is a former McDonald’s CEO got some air-time on FOX Business Network’s "Mornings with Maria", saying something that happens to dove-tail with Fox's anti-everything that keeps its audience agitated and receptive to ads for Cialis (for daily use) and other products directed to the aging demographic that sits at home watching cable news all day.

      Flash: There are already automated order-taking machines in McDonald's restaurants throughout Europe. And automated check-out lines in Supermarkets throughout the U.S. And robots welding cars together throughout the world. Progress marching on, regardless some barely adequate minimum wage.

      OTOH, whether people LIKE robot-made-and-served food remains to be seen. The only thing that's certain is robots are far more sexy in the Board Room than people. Nobody gets props anymore for motivating people to be more productive, not when there's a guy with a fancy suit and a toothy grin from Acme Robots showing fancy color pamphlets to a hungry Vice President who wants the Big Promotion.

      By the time the dust settles and McDonald's is shelling out support contracts to third, fourth, and fifth-party vendors who show up as reliably as a Comcast repairman, the VP with the great idea will have moved on, maybe to run HP (another nail in that coffin). And who keeps the McDonald's running when the robots break? That same tired assistant manager you always see picking up the slack at the fryer or turning the key when the cashier fucks up. At least he'll be making $15 whole dollars an hour for his trouble.

    • Re:If not now... (Score:5, Insightful)

      by Shawn Willden ( 2914343 ) on Wednesday May 25, 2016 @05:10PM (#52182171)

      And in six months buying a $25,000 robot will be cheaper than paying an employee $12/hr... And in a year buying a $15,000 robot will be cheaper than paying an employee $9/hr...

      They're going to replace employees with robots anyhow, I don't buy that increasing the minimum wage to whatever has anything to do with it.

      Robots will replace people in lots of professions. Economically this will be fantastic, but it's going to require a serious restructuring of our economy, and the faster it happens the more painful it will be.

      Raising the minimum wage will increase the pace of the transition, which will make it hurt more.

    • Re:If not now... (Score:5, Insightful)

      by adonoman ( 624929 ) on Wednesday May 25, 2016 @06:13PM (#52182807)
      This is why we need to completely drop the minimum wage and bring in a basic income. If something can be done by a robot, then there's no reason a human should be doing it. Productivity will keep going up with fewer and fewer workers needed, but we're still going to have people who need to live and consume.
  • by rjstanford ( 69735 ) on Wednesday May 25, 2016 @04:15PM (#52181433) Homepage Journal

    Guess what? Those $35K robots are also cheaper than paying people $8/hr.

    Human beings are incredibly expensive. They're also the economic engine that turns a single business into part of a functional economy, but I digress.

    There are very, very few positions that could be automated in a way that makes sense financially at $15/hr that wouldn't also make sense at $5/hr. Either a position is automatable, or it is not, and at 4000-5000 hours per year (plus benefits, etc) that's a lot of money for a single position that could be thrown at a robot if that's the way you wanted to play it. Basically, automating that position will either be super-cheap or super-expensive.

    Automation is a very important discussion point. Its disingenuous to tie it to the current debate over moving the minimum wage back up to a living wage.

    • by AtariEric ( 571910 ) on Wednesday May 25, 2016 @04:18PM (#52181473)

      Automation is a very important discussion point. Its disingenuous to tie it to the current debate over moving the minimum wage back up to a living wage.

      The reason they're tying it to the current debate is so they can blame the victim; victim-blaming is practically mandatory these days.

    • by danbert8 ( 1024253 ) on Wednesday May 25, 2016 @04:21PM (#52181521)

      Either a position is automatable, or it is not,

      It is automatable now, or it is not yet automatable. There is no reason to believe that any job is safe from robots/computers in the long run.

      • In the long run, we are all dead.

        What is your point?

        Quite frankly, somewhere along the tipping point, we have enough robots to move away from a scarcity economy.

        Very few people will need to work, but some number will want to work.

    • by JoeMerchant ( 803320 ) on Wednesday May 25, 2016 @04:21PM (#52181523)

      In the 1980s, $3ish minimum wages were also not living wages.

    • by 93 Escort Wagon ( 326346 ) on Wednesday May 25, 2016 @04:23PM (#52181571)

      Automation is a very important discussion point. Its disingenuous to tie it to the current debate over moving the minimum wage back up to a living wage.

      I'm old enough to have been through multiple debates regarding raising the minimum wage - some national, some state-wide (Washington), some city-wide (Seattle and environs).

      The bogeyman of massive unemployment always gets trotted out whenever anyone mentions raising the minimum wage. And guess what we've seen when the minimum wage goes up? A few isolated businesses will lay off a few people (which is trumpeted loudly in the media), but that's the sum total of it - there are no mass layoffs. Prices may go up a little, but that's about it.

      The real "issue" here is that upper class people want to hang onto as much of their money as they can. That's certainly understandable, but it's not a particularly compelling argument.

      • by bondsbw ( 888959 ) on Wednesday May 25, 2016 @04:48PM (#52181901)

        No, the real "issue" here is that the minimum wage unfairly targets particular employers, those who hire unskilled workers. An increase to minimum wage will impact some industries much more than others.

        A better solution would be a universal basic income, with no minimum wage. It would be fair by not targeting particular industries (a progressive tax would pay for it), it would force employers to compete, it could eliminate unemployment (any income you earn, no matter how small, is more than you have and is not needed to survive), and in particular to this discussion it would eliminate much of the competitive advantage of robots.

      • by bws111 ( 1216812 ) on Wednesday May 25, 2016 @05:35PM (#52182455)

        But what actually IMPROVED during those previous hikes? Did people just start making more money at their existing jobs, without an increase in cost of living? Or did many, many jobs go away and people moved to other industries? What I saw happen was this: labor costs go up, factories close and move production somewhere cheaper. Minimum wage factory worker gets a job as minimum wage order-taker, making a little more money. But the factory workers who were making MORE than minimum wage are also now forced to take a minimum wage job, LOSING money in the process. Yeah, the bottom moved up a little, but now there are a whole lot more people closer to the bottom, which is exactly the opposite of what should happen.

        In the 70s and 80s, when the manufacturing sector was imploding, there were low-paying but available jobs, mostly in retail and food service. Those jobs were deemed 'safe' because people need to buy things and eat. Now, we see that those jobs are very vulnerable. Where are the displaced retail and food workers going to get jobs? You can't just say 'unemployment didn't happen in the past so it won't now'. In fact, there was MASSIVE unemployment in certain sectors, it was just that other sectors were able to absorb the workers (although they are making less money).

    • by amiga3D ( 567632 ) on Wednesday May 25, 2016 @04:31PM (#52181683)

      A typical full time position, which fast food generally isn't, is about 2000 hours a year. The fact is that minimum wage employees are less than 5 percent of the workforce and there's a reason for that. You get either kids or the dregs at minimum wage. I know most fast food is run by part timers and a lot of them are under 21. I've seen the kiosks in the local McD's here and I don't think I like self service. I walk by them to the pimply teenager at the register. When they tell me use the kiosk or forget it.....well there's always somewhere else. I'll go home and fix a fucking PBJ first. As for automating the fryers and such there will still be a human overseeing the kitchen. I imagine they can cut some employees but still there will be no way to automate it all.

      • Plus the inevitable stories of:

        3000 McDonalds auto-restaurants hacked this week. Dispensed free food until the doors were blocked by mounds of burgers and fries.

    • by Obfuscant ( 592200 ) on Wednesday May 25, 2016 @05:04PM (#52182097)

      There are very, very few positions that could be automated in a way that makes sense financially at $15/hr that wouldn't also make sense at $5/hr.

      There is an awful lot of automation that doesn't make sense when the workers are cheaper and the payback is far off, and a factor of three is a good bit of money here. If your labor costs double because the minimum wage doubles, then there is a lot more incentive to find ways to automate those jobs. Some people "don't buy" that economic fact, but it's true.

      Basically, automating that position will either be super-cheap or super-expensive.

      The excluded-middle of "costs a little less to automate at a wage of $15/hour but more than $7/hr" still exists. It surprised the heck out of me when I saw my first automatic french-fry machine, but it was obvious that the costs of paying someone to do that job were going to be a lot more than the cost of the machine and paying someone to refill the freezer every so often.

      Its disingenuous to tie it to the current debate over moving the minimum wage back up to a living wage.

      It is disingenuous to claim that the minimum wage ever was, or was intended to be, a "living wage". It is supposed to be an entry-level introduction to employment wage. Saying "moving ... back up to" when it never has been is silly at best.

  • by blueshift_1 ( 3692407 ) on Wednesday May 25, 2016 @04:16PM (#52181435)
    Whoever does it first is going to cause a PR nightmare, but once that settles down - all of the competitors will be soon to follow the new norm.
  • by Isca ( 550291 ) on Wednesday May 25, 2016 @04:16PM (#52181447)
    The robot will be there for the long haul. Sure there will be some maintenance but it'll still be making fries 5 years from now, and efficiently doing so for all of that. Automation is coming and it has little to nothing to do with wages.
    • But, will the robot arm at the drive-through window still sell me drugs?!?
      • Drive thru?
        How quaint.

        I expect nothing less than delivery from a central location by 3D-printed drone direct to wherever I am in 15 minutes or less.
        Boom. Just replaced 15 McD's in the greater metro area, along with 95% of the staff.

        During down times, the robots work on my plan to build [REDACTED] from baby [REDACTED] to [REDACTED] the [REDACTED].
    • by JoeMerchant ( 803320 ) on Wednesday May 25, 2016 @04:23PM (#52181565)

      McDonalds et. al. are about a predictable customer experience - God knows not an excellent one, just predictable. Robots should deliver that much better than high school kids.

  • by MobileTatsu-NJG ( 946591 ) on Wednesday May 25, 2016 @04:17PM (#52181469)

    Minimum wage is a convenient scapegoat, but all businesses move to reduce overhead.

  • by rch7 ( 4086979 ) on Wednesday May 25, 2016 @04:20PM (#52181519)

    This scaremongering makes zero sense, there are plenty of countries with higher income than USA and they don't starve from unemployment, rather the opposite.
    Few positions that can be replaced by robots will be replaced anyway, as robots are getting cheaper and it makes business sense. Somebody capable of working in robotics will get employment and move up the latter leaving low qualification position for others. There are plenty of low qualification positions that can't be replaced.

    • Re:no sense (Score:5, Informative)

      by cdecoro ( 882384 ) on Wednesday May 25, 2016 @05:03PM (#52182089)

      This scaremongering makes zero sense, there are plenty of countries with higher income than USA and they don't starve from unemployment, rather the opposite.

      Citation needed.

      You're correct only if by "plenty" you mean 3-5. There are 5 countries with higher median income [wikipedia.org] than the US: Luxembourg, Norway, Sweden, Australia, and Denmark.

      There are 3 countries with higher average wage [wikipedia.org] than the US: Luxembourg again, Switzerland, and Ireland (according to the OECD). (Though this depends on who you ask: according to the United Nations Economic Commission for Europe, the US is flat-out No. 1 for average income.)

      All but 2 of those (Norway and Switzerland) have higher unemployment rates [wikipedia.org] than the US.

  • by Locke2005 ( 849178 ) on Wednesday May 25, 2016 @04:21PM (#52181527)
    McDonald's already has touchscreen systems where customers can touch pictures of food and run their own card to order, I suspect these will be quickly rolled out in any jurisdiction that raises the minimum wage to $15/hour. Using pictures also gets around language problems. Fully automated, you would still need someone to load the raw materials into stacks and watch the customers, but far fewer employees would be necessary. Using a touchscreen in the drive-through would be an improvement over talking over the intercom, but multiple stations would probably be necessary since people are slow.
    • by mykepredko ( 40154 ) on Wednesday May 25, 2016 @04:52PM (#52181941) Homepage

      This is a case where I prefer interacting with a machine. The big touch board means that I can select exactly what I want to order (in my own time) and I don't have deal with correcting somebody through a 2" speaker or wait for the person in front of me to argue through their order. I know I'm not alone in this assessment of the touch board. I'm sure they're a hell of a lot cheaper than a $35k robot.

      So, if I was McDonalds (or any public service company), my approach would be to only install technology that provides the customer with a better experience and downplay the cost benefit issue (while taking more money to the bank).

  • by cant_get_a_good_nick ( 172131 ) on Wednesday May 25, 2016 @04:24PM (#52181577)

    Also on the front page is how Foxconn is replacing manufacturing with robots. I can guarantee they're not paying $15USD/hr to employees. The talk about minimum wage is just to cut costs until the robots can replace the guys making $8/USD/Hr.

    There's a fundamental conflict in capitalism. As an owner, you want to cut costs, including wages. But wages are also known as "purchasing power". We've gotten past this by growth. Capitalism requires growth. But we're cutting so fast, im not sure we're growing fast enough to cover all the lost purchasing power. We'll see

  • by taustin ( 171655 ) on Wednesday May 25, 2016 @04:29PM (#52181661) Homepage Journal

    Even at $15/hour, it's not a livable wage in most places. You can't survive on it when your pre-tax, gross income is less than the average one bedroom apartment costs per month, as is the case in Los Angeles. So what happens is that people making minimum wage doing scut work jobs are subsidized by family, friends, or, far more often than not, the taxpayer. They can't afford a car, so they go to work on subsidized public transportation. They can't afford medical insurance, so they get subsidized by the taxpayer, or go to the emergency room they can't afford to pay for. They can't afford child care, so they sign up for subsidized versions of that, or their children grow up feral, and the taxpayer pays for keeping them in prison.

    All that so we can buy a cheap, mass produced hamburger for 99 cents.

    The problem isn't paying employees $15/hour, the problem is paying McDonald's a quarter of the true cost of making a Big Mac, so that the corporate investors can get richer.

    All big, national chains are heavily (if covertly) subsidized by the taxpayer. Sam Walton became a billionarire on those subsidies, while his employees were living on food stamps.

    If you can't afford to pay your employees enough to live on without subsidies, then your business model is broken, and you should be driven out of business by pitchfork wielding mobs.

  • by Robotbeat ( 461248 ) on Wednesday May 25, 2016 @04:36PM (#52181739) Journal

    Automation is a good thing. That a livable minimum wage encourages some companies to automate is also a good thing. We MAY need to use other policies to maintain full employment, but at this point, I don't see why anyone should be making just $15/hour.

    A big criticism of a minimum wage is that it's "not a free lunch" and just causes inflation. But if a minimum wage encourages automation, then it actually increases per-person productivity, thus partially paying for itself and keeping a minimum wage from being purely inflationary (there will, of course, be some amount of inflation due to a minimum wage increase, but nowadays a small amount of inflation is actually a good thing).

    If we're paying just, say, $2/hour for people to work menial jobs, which is far below a livable wage, then they are, de facto, being subsidized in some other way. For instance, government assistance through subsidized housing, food stamps, etc. Or perhaps they're living off of charitable organizations. Or perhaps they're living off the good will of their family and/or friends. But paying a sub-livable wage is being subsidized in SOME WAY, perhaps even just being taken from that person's health. It's not a society-optimal solution.

    In our society, even low-skilled workers' productivity has increased due to technology. But because there are so many low-skilled workers, their bargaining power is low, and thus their wages don't increase. Thus something like a minimum wage is necessary in order for those people to make a livable wage and to not be on foodstamps, etc.

    Again, I see automation in response to a wage hike as a good thing. Ultimately, provided we maintain full employment, this will help everyone. Given our modern technology, human labor is worth more than $5/hour even if the workers do not have the bargaining power to get a higher wage. So employing people at below $15/hour in positions that could be automated if they were paid a livable wage is actually a misallocation of human resources. In a sense, by NOT paying workers a livable wage and NOT automating more, companies are, in fact, having their labor subsidized by the rest of society (government, family, friends, charities).

  • by WillAffleckUW ( 858324 ) on Wednesday May 25, 2016 @04:38PM (#52181779) Homepage Journal

    Talk about wasted money. Overpaid senior execs actually reduce the ROI of any business, as numerous studies have shown.

  • by lionchild ( 581331 ) on Wednesday May 25, 2016 @04:40PM (#52181799) Journal

    Let's not fool ourselves, replacing the minimum wage worker at McDonald's with a robot isn't a new idea. They've been working on that since the early 2000's. The increased minimum wage has been a slight, if not small, acceleration to the plan to do so.

    Even when they were paying less than $8/hour, they were thinking they wanted to have a one-time-cost robot to do the work for them.

  • by DavidMZ ( 3411229 ) on Wednesday May 25, 2016 @04:44PM (#52181859)

    Foxconn cuts 60000 jobs, replaces them with robots [slashdot.org]

    That means that robots can be cheaper than a $320/month wage [marketwatch.com]. It's not a minimum wage issue.

  • All talk (Score:5, Interesting)

    by jandrese ( 485 ) <kensama@vt.edu> on Wednesday May 25, 2016 @04:47PM (#52181899) Homepage Journal
    Last time we had a discussion about raising the minimum wage (decades ago) McDonalds actually demonstrated a fully automated restaurant. It promptly went back to wage slaves once the talk died down. Now they're so lazy they're not even bothering with the proof of concept store.

    If these robots were practical at the price he is quoting they would be in use today. Payoff period would be 2/3 of a year instead of 1/2 a year, but that's barely any difference. This is a scare tactic pure and simple.
    • by ledow ( 319597 )

      Is it?

      Other countries have brought in minimum wages much higher without issue from places like McDonald's. UK current minimum wage for over 21's is GBP 6.70 which is about $9.86, for over 25's is GBP 7.20 ($10.59), and it's legally prescribed to rise every year. But even here there are campaigns for a "living wage" higher. There's not really any great fuss from places like McDonald's or other "minimum wage" employees.

      The robots, however, just keep getting cheaper. My bank has gone - in my lifetime - fro

  • by um... Lucas ( 13147 ) on Wednesday May 25, 2016 @05:58PM (#52182683) Homepage Journal

    if McD's cost is $35,000, and they're open 16 hours per day, then it pays for itself in less than a year with employees making less than $8/hour.

    (8 * 16 * 365 = $46,720)

    I know that for myself, I go to McDonalds embarrassingly often, and I would absolutely not go if that were the case, just as when I go to the super market, I intentionally don't use the self checkout lines. I don't care if its cheaper, and even if they extended a fraction of the savings to me, I'd RATHER help kids keep employed and have some money to spend. And even if they're not kids, I'd rather they get paid the money, than just give huge bonus' to the C-level guys for thinking "hey, lets automate away everyones jobs! what could possibly go wrong with that? oh and while we're at it, lets support politicians who want to do away with social safety nets! Like anyone actually needs those things!"

    And I wish I was sarcastic about that...

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