This series will intermittently consider the future of commercial activity within U.S. municipalities.
First…. fast food.
Recent news coverage of the McDonald’s low-pay budget snafu and demands by some fast food workers for a $15/hr minimum wage has fueled conversations about living wages, profit margins and sustainable business practices. In response, fast food chain flacks have ominously touted the machines as the final outcome of such activism. This potential for automation in reducing some of these fast food jobs, as reported on by NPR, is very real in the near future.
Forces beyond labor cost may push automation forward*. Continued progress on eliminating corporate and first-in-line farmer subsidies along with increased global demand for beef, dairy and corn-based products will increase fast-food chain supply costs. Expansion of consumer preference for natural meat products (grass-fed, antibiotic free, etc.) into median and lower income brackets is likely. While profits remain high for some (McDonald’s, YUM!), others are struggling in the face of increased competition and tighter consumer budgets.
*For a more extreme version of this hypothetical, imagine some degree of restrictive immigration reform passes in 2017-2020, removing a key labor constituency for fast food.
Something has to give.
While automation is over hyped at this point, it is viable in fast food. I ate often at Pepper Lunch and similar restaurants in Japan where I ordered my meal on a computer screen or vending machine. If the order was not automatically received by the cook, I would give the ticket to a worker who helped in the kitchen or with cleaning as well, and waited the same amount of time for my food as I would have if I had placed my order with a human.
Pepper Lunch franchises in Hong Kong and Singapore are notoriously slower in service and ordering, precisely because they lack this automated ordering system.
Installation would not be a prohibitively expensive proposition for most chains, though franchisee concerns would drag adoption notably in the beginning. Not only inside restaurants but in drive-thru lanes & via mobile apps, this ordering scheme would reduce labor costs and uncertainty.
Would the varying popularity of certain chains at different times of day be altered by the absence of a front-end person? I doubt it. The elderly would still congregate for conversation and gossip in the morning, workers on lunch breaks would still line up for a quick bite, and high schoolers and families with young children in the afternoon would still need an odd timed bite to eat. Ditto for the evening services.
What would change then?
For one, there would be less demand for low-paying jobs. Automation of fast food could be a bellwether for automation of retail and other services, leading either to the chance for a Las Vegas compromise between management and labor or the more likely continued under-compensation of skilled service workers .
While the idea of 75-80% of fast-food jobs being automated is dubious, a 25-35% reduction is not unfeasible. As we suffer through a critical skills abyss at the bottom of the labor pool (math and reading comprehension, writing ability, self-discipline, etc.), this would not be a good outcome since we already have so many more workers in this labor cohort who lack viable jobs.
That however is a conversation for another day.
Update: McDonald’s in the EU region has already begun its automation process.
“The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.”