Minimum Wage Massacre: Wendy's Unleashes 1,000 Robots To Counter Higher Labor Costs

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May 22, 2005
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Behind Enemy Lines
#1
In yet another awkwardly rational response to government intervention in deciding what's "fair", the blowback from minimum wage demanding fast food workers has struck again. Wendy's plans to install self-ordering kiosks in 1,000 of its stores - 16% of its locations nationwide.

(Excerpt) Read more at zerohedge.com ...
 
May 22, 2005
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Behind Enemy Lines
#2
I understand a robotic arm costs around $30k and can replace at least 3 employees. So in a typical fast food joint 3 of these devices would work out just fine. It would cost around $120k/yr, factoring in maintenance, repairs and upgrades, as opposed to shelling out over $300k in salaries and benefits. Plus, robots don’t call out sick, or show up for work drunk or high. They don’t need FMLA and they can’t sue for workplace discrimination. Unless Robotic American becomes a new protected class. HMMM, better keep my big mouth shut. Don’t wanna give the SJW’S more dumb ideas.
 
Jul 15, 2010
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Dallas and Istanbul
#5
Minimum Wage Is Racist, Kills Jobs And Doesn't Help The Poor — Apart From That, It's A Great Idea

Labor: Burger-chain Wendy's plans to install automated self-ordering kiosks at 1,000 stores in an effort to cut labor costs, killing thousands of low-wage jobs. Thanks loads, minimum wage hikers.

Wendy's is not alone. Low-cost labor may soon be put on the endangered species list, thanks largely to a spate of minimum wage hikes across the country, and the threat of a national "fight for $15" minimum wage hike.

Advocates like to say that mandated wage hikes of 39% or more are needed to "reduce inequality" for low-wage workers. In fact, as Wendy's and other fast-food chains are showing, a forced minimum wage hike acts more like a tax on low-wage workers — a tax the workers themselves end up paying by losing their jobs.

Wait, you say, don't the workers make more money? Sure, some high-productivity workers who don't lose their jobs will reap the reward of a higher wage. But others will simply be replaced by machines.

In Wendy's case, it will put the 1,000 computer kiosks into high-volume stores, with about three kiosks per store. The investment will pay off in about two years, meaning Wendy's will then basically be paying only for the upkeep and electricity used by the kiosks. And no ObamaCare mandate. Try to compete with that.

Sadly, thousands of Wendy's workers will lose their jobs, while others — in particular, low-skill minority youths — will never even get the chance to have an entry-level job. They will be priced out of the market.

Minimum wage advocates often claim that a minimum wage is needed to lift struggling families out of poverty. Not true. As the Bureau of Labor Statistics has noted, the majority of minimum wage workers are teenagers, college students, or the second-earner in a two-income family — not a poor household head struggling to support his or her family.

But one group that is overwhelmingly represented, as we noted above, is minorities. They tend to be less educated and have fewer skills than the population at large, and thus will be the first fired when minimum wage hikes kick in.

This is no accident, by the way.

As economist Walter E. Williams notes, "Our nation's first minimum wage law, the Davis-Bacon Act of 1931, had racist motivation."

His evidence? "During its legislative debate, its congressional supporters made such statements as, 'That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.' "

Also during the hearings, says Williams, American Federation of Labor President William Greene warned: "Colored labor is being sought to demoralize wage rates."

So much for the pure motivations of those who back higher minimum wages.

And make no mistake, the economic damage will be significant. In 2014, the Congressional Budget Office estimated that raising the national minimum wage from $7.25 an hour to $10.10 an hour in 2016 and then allowing it to rise by inflation from there would cost as many as 1 million workers their jobs. One million.

Yes, wages would go up by a big amount: $31 billion. But only 19% of that would go to families earning below poverty. Fully 29% would go to families earning three times the poverty rate. So raising families from poverty isn't a real argument for a minimum wage hike. It's a false emotional appeal.

Now, just imagine what an immediate hike to $15 an hour would do. Fear of this, by the way, is a big reason why companies like Wendy's and CKE are moving to automate. Faced with the possibility of a massive minimum wage rise, fast-food restaurants will have only two choices to stay in business: either raise prices to consumers sharply, or automate.

Labor economist James Sherk of the The Heritage Foundation has estimated a $15 an hour minimum wage would raise prices by 38% while cutting jobs by 36%. That's the equivalent of about 7 million lost jobs. Is that what we really want?

Yes, some quite good jobs would be created by those that make and service the automation equipment. But few if any of those who lose their jobs will have the training, skill or education to fill those jobs. They will be a new underclass — the minimum-wage unemployed.

Unions will no doubt go on the attack against Wendy's and other fast-food companies like them who have no choice but to automate, making them out to be heartless, greedy capitalists who don't care about their workers.

Don't believe it. If the big unions and others that materially profit from the misery of the low-skilled underclass get their way and jack the minimum wage to a job-killing $15 an hour, the numbers of America's working poor will soon be expanding dramatically. Blame the minimum wage hikers, not Wendy's.

http://www.investors.com/politics/e...lp-the-poor-apart-from-that-its-a-great-idea/

 

State

Russian Bot
Mar 15, 2007
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#6
I understand a robotic arm costs around $30k and can replace at least 3 employees. So in a typical fast food joint 3 of these devices would work out just fine. It would cost around $120k/yr, factoring in maintenance, repairs and upgrades, as opposed to shelling out over $300k in salaries and benefits. Plus, robots don’t call out sick, or show up for work drunk or high. They don’t need FMLA and they can’t sue for workplace discrimination. Unless Robotic American becomes a new protected class. HMMM, better keep my big mouth shut. Don’t wanna give the SJW’S more dumb ideas.
https://www.youtube.com/watch?v=DHyUYg8X31c



Kurzgesagt – In a Nutshell is a pretty awesome YouTube channel, btw.
 
Jun 18, 2010
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Where else but Stillwater
#7
Meanwhile, in Denver where the minimum wage is $9.30 an hour, the unemployment rate is 2.6%. Compare that to Tulsa where the minimum wage is $7.25 with unemployment rate at 4.8%. OKC is 4%. So a local economy can be so strong that the minimum wage becomes considerably less relevant. But in 2020 when Denver minimum wage must be at $12, it will be interesting to see if the unemployment rate will still be lower than in Oklahoma City and Tulsa where the min. wage will probably still be at $7.25.

 

State

Russian Bot
Mar 15, 2007
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TX
#8
Meanwhile, in Denver where the minimum wage is $9.30 an hour, the unemployment rate is 2.6%. Compare that to Tulsa where the minimum wage is $7.25 with unemployment rate at 4.8%. OKC is 4%. So a local economy can be so strong that the minimum wage becomes considerably less relevant. But in 2020 when Denver minimum wage must be at $12, it will be interesting to see if the unemployment rate will still be lower than in Oklahoma City and Tulsa where the min. wage will probably still be at $7.25.

It's almost as if Denver is a more expensive and more desirable place to live.
 

kaboy42

Territorial Marshal
May 2, 2007
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#9
Meanwhile, in Denver where the minimum wage is $9.30 an hour, the unemployment rate is 2.6%. Compare that to Tulsa where the minimum wage is $7.25 with unemployment rate at 4.8%. OKC is 4%. So a local economy can be so strong that the minimum wage becomes considerably less relevant. But in 2020 when Denver minimum wage must be at $12, it will be interesting to see if the unemployment rate will still be lower than in Oklahoma City and Tulsa where the min. wage will probably still be at $7.25.

Soooooo... Honest question here Townie...

Would you rather:

A) live in Denver and make $9.30/hr?

OR

B) live in OKC/Tulsa and make $7.25/hr?



:popcorn:
 
Jun 18, 2010
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Where else but Stillwater
#11
Soooooo... Honest question here Townie...

Would you rather:

A) live in Denver and make $9.30/hr?

OR

B) live in OKC/Tulsa and make $7.25/hr?



:popcorn:
Denver. But would rather it be Colorado Springs where the cost of living is lower and the scenery is just as pretty, if not more so. Also would enjoy no sales tax on groceries. Colorado is just a much better run state, period. And according to U.S. News and World Report, Colorado has the number one economy in the country.
 
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Jul 15, 2010
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Dallas and Istanbul
#13
Love all that heavy bumper to bumper traffic congestion, huh?
Set my hours at work to miss all rush hour traffic. Glad my company allows me the opportunity to do that. Otherwise, you are correct, Dallas traffic does suck. Would trade some of the mild weather to be in Stillwater. Don't know what you have until it's gone, as they say.
 

kaboy42

Territorial Marshal
May 2, 2007
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#14
Denver, by far. But would rather it be Colorado Springs where the cost of living is lower and the scenery is just as pretty, if not more so. Also would enjoy no sales tax on groceries. Colorado is just a much better run state, period. And according to U.S. News and World Report, Colorado has the number one economy in the country.
So you'd rather live in Denver and afford less... than live in Oklahoma and afford more and provide more for yourself and/or your family? :confused:
 
Jun 18, 2010
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Where else but Stillwater
#17
So you'd rather live in Denver and afford less... than live in Oklahoma and afford more and provide more for yourself and/or your family? :confused:
But jobs pay more in Denver to reflect the higher cost of living. Per capital income Denver: $36,792, Oklahoma City: $27,727. Once, again, if one doesn't like the high cost of living in Denver, it's lower in Colorado Springs and Pueblo. Does no sales tax on groceries not mean much to you? Maybe house and auto insurance is lower in Colorado.
 
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steross

he/him
A/V Subscriber
Mar 31, 2004
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#20
Well, if the idea here is that minimum wage should be lower than the cost of robots or they should just be replaced by robots, don't look now, but it appears it will not be too long before the rest of us find our wages are too high also:

http://bigthink.com/philip-perry/47...will-disappear-according-to-oxford-university
47% of Jobs Will Disappear in the next 25 Years, According to Oxford University
  • December 27, 2016
by PHILIP PERRY

The Trump campaign ran on bringing jobs back to American shores, although mechanization has been the biggest reason for manufacturing jobs’ disappearance. Similar losses have led to populist movements in several other countries. But instead of a pro-job growth future, economists across the board predict further losses as AI, robotics, and other technologies continue to be ushered in. What is up for debate is how quickly this is likely to occur.

Now, an expert at the Wharton School of Business at the University of Pennsylvania is ringing the alarm bells. According to Art Bilger, venture capitalist and board member at the business school, all the developed nations on earth will see job loss rates of up to 47% within the next 25 years, according to a recent Oxford study. “No government is prepared,”The Economist reports. These include blue and white collar jobs. So far, the loss has been restricted to the blue collar variety, particularly in manufacturing.

To combat “structural unemployment” and the terrible blow it is bound to deal the American people, Bilger has formed a nonprofit called Working Nation, whose mission it is to warn the public and to help make plans to safeguard them from this worrisome trend. Not only is the entire concept of employment about to change in a dramatic fashion, the trend is irreversible. The venture capitalist called on corporations, academia, government, and nonprofits to cooperate in modernizing our workforce.

To be clear, mechanization has always cost us jobs. The mechanical loom for instance put weavers out of business. But it’s also created jobs. Mechanics had to keep the machines going, machinists had to make parts for them, and workers had to attend to them, and so on. A lot of times those in one profession could pivot to another. At the beginning of the 20thcentury for instance, automobiles were putting blacksmiths out of business. Who needed horseshoes anymore? But they soon became mechanics. And who was better suited?


Not so with this new trend. Unemployment today is significant in most developed nations and it’s only going to get worse. By 2034, just a few decades, mid-level jobs will be by and large obsolete. So far the benefits have only gone to the ultra-wealthy, the top 1%. This coming technological revolution is set to wipe out what looks to be the entire middle class. Not only will computers be able to perform tasks more cheaply than people, they’ll be more efficient too.

Accountants, doctors, lawyers, teachers, bureaucrats, and financial analysts beware: your jobs are not safe. According to The Economist, computers will be able to analyze and compare reams of data to make financial decisions or medical ones. There will be less of a chance of fraud or misdiagnosis, and the process will be more efficient. Not only are these folks in trouble, such a trend is likely to freeze salaries for those who remain employed, while income gaps only increase in size. You can imagine what this will do to politics and social stability.

Mechanization and computerization cannot cease. You can’t put the genie back in the bottle. And everyone must have it, eventually. The mindset is this: other countries would use such technology to gain a competitive advantage and therefore we must adopt it. Eventually, new tech startups and other business might absorb those who have been displaced. But the pace is sure to move far too slowly to avoid a major catastrophe.

According to Bilger, the problem has been going on for a long time. Take into account the longevity we are enjoying nowadays and the US’s broken education system and the problem is compounded. One proposed solution is a universal basic income doled out by the government, a sort of baseline one would receive for survival. After that, re-education programs could help people find new pursuits. Others would want to start businesses or take part in creative enterprises. It could even be a time of the flowering of humanity, when instead of chasing the almighty dollar, people would able to pursue their true passions.