It’s no secret that increasing the minimum wage has been a hot topic of debate across the country recently. States like California and Washington have already taken the step of raising minimum wage among workers. One hazardous side effect of this increase in minimum wage is that some companies will now look to automation in order to make up for the difference in expenditures. Some industries will be affected more than others, and that is evident with the restaurant industry, which makes up 10% of the overall U.S. workforce.
The fast-food industry in particular could see a rapid decline in jobs, mostly due to the fact that they offer various entry-level jobs which are more easily replaced by automation. McDonalds, Wendy’s and Jack in the Box have announced plans to install self-ordering kiosks as soon as next year.
“As we see the rising costs of labor, it just makes sense to consider adding new automated technology”, CEO Leonard Comma said at the 2018 ICR Conference.
Labor has long been known to be one of the highest costs for companies, and that is true in the fast-food industry as well.
“Probably the most challenging thing we’re facing in the industry right now is labor costs,” Red Robin CFO Guy Constant also stated.
The rise of minimum wage may be helpful to those employees that can reap its benefits. But, with the rise of automation making employees more expendable, it is possible fewer employees will be able to do that. This truly is a double edged sword.