Fmr. McDonald's USA CEO: $35K Robots Cheaper Than Hiring at $15 Per Hour.

[Kaleredar]

I don't understand what the takeaway from this is.

"Paying people crappy wages is a good thing; it makes sure they aren't replaced by robots!"


Seems like a pretty "grasping-at-straws" way to approach avoiding raising the minimum wage.

[Bullettime]

You would still need people to cook the food, at least in the short term. However, replacing cashiers with ordering screens seems reasonable.

What I find interesting is that so few people earn minimum wage. What that means is that the minimum wage is so low that it's under the market wage. It shouldn't be that way. That basically defeats the purpose of a minimum wage.

That being said, a $15 an hour minimum wage is too much. What people forget is that a minimum wage increase causes everyone's wages to rise. If restaurant workers earn $15 an hour, then the higher skilled people currently at $15 an hour would demand a raise, so they can be at a higher status level than minimum wage earners.

To be fair, that's because a significant amount of low wage earners don't make the bare minimum wage but in the neighborhood of 8.

Historically, wages have gone up with minimum wage raises since it gives you more bargaining and negotiating power for your wages. A lot of jobs people are so proud of being paid like 13-14 an hour in the US they would make more far more, even relatively, doing in other countries. A lot of people are underpaid for their work but don't realize it because they're not living in poverty like people who make sub 9 tend to be.

[haxartus]

That's pretty much bullshit, if it's cheaper at $15, it will be cheaper at $10.

[Kapadons]

Robots aren't only happening at McDonald's. I went into Bank of America yesterday to deposit a check and get cash back. The line was long and a bank employee pointed me to a kiosk. The kiosk wasn't really an atm. It had a tv screen and an employee popped up and asked me how I was and what I needed. No doubt he was working in a "call center" and could handle customers as they needed help. I walked away thinking this was the greatest idea. That one guy could possible help people in hundreds of different cities throughout the day. Which means they could cut an employee out of hundreds of locations and save thousands of dollars in wages across the company. Told this story to a friend of mine that works as a branch manager and she said that her location is one of 4 in the city that will test using only remote employees exclusively. They still will have her and another employee in the branch to help with old people and computer illiterates and normal bankers for loan stuff. . But the 3 tellers on the front line and 2 in the drive through have been reassigned to another location during the testing phase. No doubt if it proves successful those employees will be unemployed.

[Glnger]

U

I understand how this can affect people, losing their jobs and all, but I'd much rather have robots working in Fast Food establishments. The employees mess orders ups, don't follow proper hygiene rules and mess with people's food. I know they'll probably still have actual human employees there to make sure everything goes smoothly, but I welcome the day when robots just completely run it.

Now you only have to worry about the same people that clean the McDonald's coffee machines cleaning the meat machines...

I've seen the stories..

[Zoldor]

I don't think so. Corporations will lose out because their will be less franchisers signing up and what is already a mass exodus in trying to sell out. A good friend of my parents owns 23 dunkin doughnut's stores in new england and he has been trying to sell out for a few years now and even with dunkin doughnuts help he hasn't found a buyer for any of his stores. Due to his franchise agreement if he closes one, D&D will revoke his lease on the rest and boof all his equity in the business is pretty much lost including the equipment which he purchased. There is no doubt that corporations will lose but it won't be an uncontrollable loss. Keep in mind a great deal of franchisee's don't actually work their business, it's these people that corporations stand to lose with. If they do not compensate owners for the wage hike they will redline till eventually biting the bullet and closing down.

I'd love to feel sorry for this but I can't. 23 stores. I pity the ability for them to not be able to sell out. Corporations have been pushing max density on franchisees for a long time. Come up with your own business model as the capitalist love to say. I don't feel bead for people who've spent generations profiting on the backs of low income.

[willemh]

So do you have another solution for what to do when there are no longer enough jobs to keep people employed?

Working useless jobs certainly is not a solution, that's for sure. 'Creating' work just so people can 'work' is complete crap.

Before large civilizations existed everyone was simply a 'hunter' or a 'gatherer'. We basically lived like animals where the only purpose in our lives was to eat and to procreate. After we got more effective at gathering food (by starting to farm) we could support a larger population and suddenly we had to find other things to do in our lives then just gathering food and providing our family. Suddenly there was time to start building houses, to start trading, to start inventing, to start building up a civilization. In the thousands of years afterwards we grew and grew as humanity into what we are today. Anyone trying to hold technological advancement because of 'reasons' is fooling himself, it's NEVER a bad thing to be more efficient.

[Daethz]

That's a good thing, so instead of having slave labor mcdonalds will start investing into technology?

[Rezhial]

I have always been a fan of jobs such as these being good for people trying to make it into the working world. High school / college kids, perhaps someone who hasn't worked in years due to whatever reason. It's a good stepping stone to learn responsibility.

However, I don't see how it comes as a surprise that when you almost double the minimum wage, smart business people will look to remove employees altogether. Having such a high minimum wage is an awful idea, and I can't blame big corporations for finding their own way out of paying it.

[Deleted]

the computers your can order food from at mcdonalds are amazing, i use them all the time.
though i agree with the worries that it could cause widespread job losses, specially in unskilled jobs like that.

But that will help the people in question -the low skill low end- as they will have bigger incentive to learn something, to become more valuable to the society. Or it can help them to get the motivation to start their own business, even!

The automation is good.

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That's a good thing, so instead of having slave labor mcdonalds will start investing into technology?

Yup, exactly that. Yet an another benefit.

[Blur4stuff]

millions of adult Americans will simultaneously "pull themselves up by their bootstraps"?

there will suddenly be millions more higher paying jobs and new businesses that succeed?

i think the more likely scenario is additional welfare and crime

[Bryntrollian]

Okay, bagging french fries? I agree.



But I'm not sure what else it could do. I don't think it could run the cash register.

Oh look, a device with that functionality already exists.

[Katchii]

Sounds like bullshit.

A company doesn't have morals besides what makes the most money. If robots where so much cheaper they would get them regardless.

It might be slightly cheaper but the price for maintenance and the complexity involved makes me hard to believe it would be a large gain.

It's not necessarily the gain itself, but the Return on Investment (ROI). If a company can't get a return on the money they spend within a certain amount of time they don't want to do it. Time frame requirements for ROI are different for different companies, ranging anywhere from a few months to a few years. It's really a question of, how long a company is willing to work at a loss before they start making money from the money they spent.

[Gheld]

A robotic arm would be stupid. The process of flipping a disc shaped patty of meat onto a cooking surface could be accomplished with a hopper and a conveyor belt.

You could also get rid of the entire building. A Red Box but with shitty hamburgers.

Except there's one problem: most of these fast food restaurants are franchises owned by individuals with no other affiliations to the brand. These franchise owners can't afford high tech robotics out of pocket.

[melodramocracy]

millions of adult Americans will simultaneously "pull themselves up by their bootstraps"?

there will suddenly be millions more higher paying jobs and new businesses that succeed?

Yes, and yes. Oh, and rainbows and unicorns everywhere.

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A robotic arm would be stupid. The process of flipping a disc shaped patty of meat onto a cooking surface could be accomplished with a hopper and a conveyor belt.

You could also get rid of the entire building. A Red Box but with shitty hamburgers.

Except there's one problem: most of these fast food restaurants are franchises owned by individuals with no other affiliations to the brand. These franchise owners can't afford high tech robotics out of pocket.

The conveyor belt thing is already done... at Burger King at least, there is no flipping or even human monitoring of cooking temp for a patty, and hasn't been for over 20 years. It's all about sandwich assembly, which also will be easy and inexpensive enough to eventually automate. At that point the next goal is to ensure that machines stay running, and are stocked, which is a 1 person part time job (probably driving to multiple locations per day)

[Logwyn]

Okay, bagging french fries? I agree.

But I'm not sure what else it could do. I don't think it could run the cash register.

You mean like the sefl check outs at Walmart, Lowes, Home depot, etc? You just need a person there to man 8 registers if something goes wrong. Also to maintain them.

Aren't there experiments with RIFs where you just load up the buggy and as you walk out it know you took XYZ and takes it out of the account too? Scary for sure but its a thing.

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And this is why I fear capitalism is doomed to fail. Once we reach a certain technological height, capitalism may no longer be sustainable. Communism or some other form of socialism may become a reality and maybe the only possibility in the future.

Wait why would it just fail?

[Ragnarohk]

Big deal, it's called industrialization and progress.

People get displaced from one industry to another when the industry gets more productive / technologically advanced. It happens in almost every field. Look at how some computer algorithms (Watson) promise to replace general physicians at some point. The people that lost their job at said industries will find jobs elsewhere, where they are actually needed, being more productive for society.

[jdbond592]

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 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 (MCD) 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.

http://www.foxbusiness.com/features/...-per-hour.html

So first he claims that he is deeps..t money grabber and then he is trying to empathize with common men by claiming this is bad for workers? Is he Trump?

[unbound]

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 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 (MCD) 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.

http://www.foxbusiness.com/features/...-per-hour.html

And, what do you think is going happen in 10 to 15 years anyways? Seriously, do you think we should lower minimum wage to avoid this?

The reality is that we have a problem of greed. Corporations are unwilling to give up just a portion of their profits to pay reasonable salaries. Corporations are unwilling to pay to retrain their workers for future jobs (whether themselves directly or paying their fair share of taxes). The people at the top of the corporations don't care one bit about the workers and should be viewed as the sociopaths that they are.

But, more importantly, the McDonald's CEO is blowing a bunch of BS out at people. Here's the math for people:

$15 / hr x 52 weeks / yr x 25 hrs / wk (avg hours given to most fast food workers) = $19,500

One thing to keep in mind is that the type of robots that can do the type of work aren't remotely $35k. Tokyo's Robot Restaurant cost about $100 million (yes, US dollars) to build in 2012. Yes, the technology has gotten cheaper...but it isn't anywhere near $35k at this point...and maintenance isn't going to be cheap for the more sophisticated robots.

In other words, stop buying corporate BS. The only thing less trustworthy than politicians are CEOs speaking to things that affect their bottom line.

[Youn]

So, in 1985 Harry Harrison wrote a book called A Stainless Steel Rat is Born. During it the main protagonist is fleeing the law. He hides in a futuristic burger joint. To give a general description of it on the outside of it was an ordering kiosk. Then inside the machine was a series of robotic arms that assembled your food and dropped it into an ordering shoot. Only once a day or so, a guy showed up and loaded the machine with new items to cook and sell.

In the modern day, Assuming each step could be automated. It would reduce a McDonald's down to a single employee per 5-6 McDonalds. At that rate, you could pay him $30-$40/hour. And I am guessing the cost of each Restaurant would be about a million dollars a piece. And since, you punch in your order, it's very unlikely it would ever accidentally put mustard on your hamburger if you didn't ask it to do so.