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Wage Hikes Bring Kiosks to Wendy’s

Wage Hikes Bring Kiosks to Wendy’s

Everything has a price

Being replaced by machines is probably not what the Raise the Wage! crowd had in mind, but here we are. Again.

For almost two years, McDonald’s has been flirting with automated ordering machines, and has introduced the new mechanical overlords to some of its locations.

I blogged about this back in 2014:

This is all basic economics, really. As costs of labor increase the added cost must be offset. In order to satisfy operating costs, produce a product consumers want to purchase, and still turn a profit, it’s perfectly reasonable for a company like McDonald’s to look for cost-cutting alternatives. As Forbes pointed out, the added pressure to increase wages only serves to expedite technological solutions.

Now, fast-food chain Wendy’s is experimenting with automated ordering kiosks. The driving force behind technological expansion? Wage inflation.

Jed Graham of Investor’s Business Daily reports:

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

It’s not surprising that some franchisees might face more of a labor-cost squeeze than company restaurants. All 258 Wendy’s restaurants in California, where the minimum wage rose to $10 an hour this year and will gradually rise to $15, are franchise-operated. Likewise, about 75% of 200-plus restaurants in New York are run by franchisees. New York’s fast-food industry wage rose to $10.50 in New York City and $9.75 in the rest of the state at the start of 2016, also on the way to $15.

For now, Penegor said, wage pressures have been manageable both because of falling commodity prices and better operating leverage due to an increase in customer counts. Still, the company is wary about both wage hikes and a possible recovery in commodity prices and is “working so hard to find efficiencies” so it can deliver “a new QSR experience but at traditional QSR prices.”

In addition to self-order kiosks, the company is also getting ready to move beyond the testing phase with labor-saving mobile ordering and mobile payment available systemwide by the end of the year. Yum Brands and McDonald’s already have mobile ordering apps.

The fast food industry isn’t the only one to feel the pinch of increased labor costs. Recently, UC Berkeley put 500 jobs on the chopping block ahead of California’s $15 an hour minimum wage increase.

[Featured Image from Wendy’s website]

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Comments

This is not a bug, it is a feature. The inevitable progress of history will result in the use of robots to replace all working humans, and so we should start expanding the ranks of the unemployed right now.

This is how the Democrats talk.

The real “minimum wage” is $0. The “social justice warriors” will find that out soon.

    casualobserver in reply to Fiftycaltx. | May 12, 2016 at 7:17 pm

    To SJWs the real minimum wage is the amount the entitlements pay to those poor souls who are displaced by modern technology. If we stupidly allow the third Obama term by allowing Hillary to occupy the WH again, expect that amount to go up.

    it can dip below 0. Consider a grad student working as a TA. He is in grad school because jobs are scarce, and he pays for tuition and room and board. Not all costs are covered by scholarships and whatever he gets out of teaching.
    Internships can be paid for by the intern.

First they came for the coal miners, but I was silent as I wasn’t a coal miner.
Then they came for the burger flippers…….

History repeats itself, don’t you think?

Libtards never learn.

“Now, fast-food chain Wendy’s is experimenting with automated ordering kiosks.”

It sounds like WAY past an “experiment”. It sounds like a chain-wide commitment. Not remarkable.

    persecutor in reply to Ragspierre. | May 12, 2016 at 6:29 pm

    If we’re hearing about it only now, you can bet it’s been on the drawing boards for quite a while.

I’m exploring the kiosk possibility for my business. I pay $8.00/hr. to start in hopes of getting the better workers for my restaurant. And it works. I have a great crew. Honest, I do. But my manager had to teach a 16 year old how to tie a knot last week. He didn’t know how to tie a knot. I had a kid who didn’t know how to use a broom. He pushed it like a snow shovel. And the commies think I’m oppressing them by not wanting to pay $15/hr. for that kind of stellar common sense and wealth of experience.

    Granny55 in reply to windbag. | May 12, 2016 at 6:41 pm

    Sad fact of life is – no one is taught the work ethic anymore. That means chores done at home, doing homework for school, being taught to show up on time in presentable clothing, showered, hair done, etc. That is not part of life for young people anymore. Bad parenting – they are throwing morals out the window when it comes to teaching children respect, manners, morals, etc. Very sad.

      The Friendly Grizzly in reply to Granny55. | May 13, 2016 at 10:58 am

      Part of that problem comes from laws, permits, regulations, and other nonsense. When I was a youngster, many of my friends had paper routes or worked sweeping the floors of a local store after school for spending money. Then came W2s for ALL work. Then also came having to get a mommy-may-I slip from the school district to hire some kid for 8 or 10 hours of simple work per week. More got stacked on, and those “kiddie jobs” went away.

Speedway Gas Stations here in Michigan remodeled many of their old stations and are now called Speedy Cafes. They have kiosks where you can order sandwiches, pizza, breakfast foods, etc. You order by kiosk and it is easy, quick and actually not bad tasting food. Upside, I don’t have to deal with a complete idiot taking my order. Downside you still have to deal with the complete idiot cashier. So – a little bit of progress. Note: I am not condemning all who work in this industry – there are some really hardworking people, however, the Speedway Café closest to where I work – does their shift change at 12:30 pm in the middle of lunch rush hour and that only leaves one cashier trying to handle a line of 10-12 people, so you get your food pretty fast but stand in line an unreasonable amount of time to check out. Poor management and I am sure managers make more than $15/hour.

So kudos to Wendy’s – I will give them my business should kiosks appears – just hope their cashiers and managers are well trained.

Bad news feminists- if your fast food restaurants are anything like the ones I visit those cashiers being replaced by kiosks and iPads are mostly female workers. The dudes in the back frying and grilling the meat are mostly male workers.

#Patriarchy

They actually press a button with a picture of a hamburger on it (and sometimes have to ask for help on how to do that). Please tell me what makes these people think they are worth $15 an hour? I know EMTs and cops in smaller departments that make that much. They don’t seem to understand that the wage is governed by the skill level and knowledge required to do the job. You don’t get to tell the boss how much he’s (sorry feminists for using a male pronoun) going to pay you when you have zero marketability.

ugottabekiddinme | May 12, 2016 at 7:10 pm

As a younger man, I heard a business speaker named Jim Rohn explain how one’s earning power depended upon one actually providing value in and to the marketplace.

This thought recurs at the high end, as whenever I heard griping about the earnings of CEOs, who are responsible for huge enterprises that account for the livelihoods and well-being of thousands of employees and their families, as well as millions or billions in investors’ capital. They are responsible for other people’s money, and their whole lives and careers have been preparing them to render this service.

And nowadays the thought recurs at the low end, too. If there were no law compelling payment of a minimum wage, what would a high schooler starting on the first job of a lifetime actually be worth in the marketplace? Not $15/hour, I betcha.

    JackRussellTerrierist in reply to ugottabekiddinme. | May 12, 2016 at 11:10 pm

    I’m sure there are young people in college or in their mid-20’s making $8-$11 per hour who would be glad to bring their skill set and work ethic to a $15 ph job, putting the drop-outs and recent high school grads on the street.

    I wouldn’t pay any 18 yr.old to do anything except mow and pull weeds, and it wouldn’t be $15 ph.

Outside forces that mess with, muck up and break the mechanisms of Capitalism end up saying, “Look Capitalism doesn’t work. We need Socialism.”

Wait until they see the machine that makes a complete burger from start to finish, including wrapping and bagging

casualobserver | May 12, 2016 at 7:21 pm

This will be a good thing in nearly every way. Faster service. More correct orders. And those fewer employees who are paid more will be more worthy as those who aren’t can be let go. I like it. Great news for my favorite fast food hamburger. I might start treating myself more than the once or twice a month I do now.

Once a sizable outfit like Wendy’s goes to the considerable trouble and expense of automating some operations in states with high labor costs, it would make economic sense to similarly automate in other more sensible states. Once the systems are developed and perfected, the cost of installing similar systems elsewhere are relatively low, as no new R&D would be required.

Result? Low-skilled workers in all states become low-skilled out-of-workers.

California … still a trend-setter.

    RodFC in reply to tom swift. | May 13, 2016 at 1:15 am

    That’s not completely true.

    Two recent examples are: my CPAP machines/masks, my mothers phone in Rx system.

    My second CPAP is a big improvement over my first. It’s smaller, easier to control, and uses SD cards instead of some proprietary thing. OTOH the reservoir was made to complicated and is hard to clean, but I expect them to fix it on the next iteration.

    The mask though shows major signs of improvement. Replacable parts. Instead of doing and undoing velcro each time there is a quick release. Also no gel pack at the forehead, plus the forehead is adjustable.

    When my mother first starting getting her meds through a phone order and mail system, she didn’t have a copay, but she was asked for a credit card number, so she had to talk to someone. Now the system takes care of that automatically. It also has lots of new things ( such as reading back the Rx name ) that it didn’t have before to make things more smooth.

    The point is that once you put in a machine, it is not done. They are constantly refining things.

Many grocery stores, and other big stores like Target and Home Depot are also introducing self-checkout kiosks.
It’s easy, and usually faster than a cashier. They take cash and don’t mess up the change. They don’t give you a smile, that’s true, but they never give you an angry face either.

    RodFC in reply to Exiliado. | May 12, 2016 at 9:03 pm

    I believe Jewel has had them for about ten years. Next to cashiers.

    The Friendly Grizzly in reply to Exiliado. | May 13, 2016 at 11:06 am

    One of the main things slowing checkout via human in a lot of stores is settling conflicts of what is on sale, what was supposed to be programmed into a loyalty card (“on-line coupons”) that sometimes haven’t registered right. Or, there are 6 people in line and the cashier wants to (or is REQUIRED to) get a customer to sign up for a loyalty card right there at the checkout.

    If retailers would cut out all of that nonsense, the lines would go more efficiently.

WalMart has had them for years.

    conservative tarheel in reply to Old0311. | May 13, 2016 at 10:28 am

    I try and avoid self check out at walmart / loses/ homedept.
    and food stores …. someone needs a job, and as long as I can
    I will stand in line and check out and help make sure that person
    has a job.
    flame away ….

      The Friendly Grizzly in reply to conservative tarheel. | May 13, 2016 at 11:08 am

      I will do it as well. I live alone, and interaction with other people is always appreciated. I’m also one of the few customers they will get who is not a sour-puss, and I do what I can to brighten their day. A smile and a “thank you” goes a long way.

I was in a Target today and went to the self-checkout line for faster service. The people ahead of me were clueless. It was slower than the manned checkout lines. Once I got to an open checkout station, I was finished in less than 30 seconds. People have to step up and get up to speed in order for self-checkout to work. For most, I don’t see this happening. Fast food checkout might be no different.

The push for minimum wage increase has nothing to do with seeing that Burger Flipper Bob earns a decent living and instead has everything to do with raising the prevailing wages of public sector unions. Nothing more.

A when the legal min wage goes up an automatic increase goes to public sector unions who’s wages are tied to the minimum wage, and the contriubtions to the democrats increase with it. Meanwhile Burger Flipper Bob, the one that unions where supposedly fighting for, loses his job to an automated kiosk because its now more economical to buy a robot instead of paying a person.

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