McDonald's: Robots Waiting in the Wings, If Minimum Wage is Increased

The restaurant industry is the second largest in the country. In 2013, 3,653,168 were employed in fast food alone.

The profit margin for restaurants is roughly 5-6%. Most operators spend 33% oftheir revenue on employee salaries and wages.

With that being said, it’s not surprising that restaurant brands are gravitating to more cost-effective labor. Wendy’s will be installing more than 6,000 kiosks in their US stores by the end of the year and the chain Panera Bread already have these self-serve kiosks available in their stores.

These types of technologies are bound to be more attractive to the industry if the minimum wage is increased to $15. Both California and New York plan to increase the wage to $15 within the next few years and liberals have been pushing for $15 to be the national minimum wage.

This increase will not only make the business owners suffer, but so will the workers. Businesses will be forced to cut the number of employees, offer less hours and turn to cheaper alternatives for labor.

Most restaurant industry leaders have argued that the effect of this national wage increase would be detrimental. Restaurants would be forced to turn to automation.

“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.”

McDonald’s has also been looking into getting kiosks for their stores. The fast food mogul employs 1.9 million, but many of those jobs would be obsolete if the brand turns to technology like self-serve kiosks.

Think about it, these self-serve terminals will be more accurate and won’t go on strike or miss a shift of work.

With all this being said, does it really work in an employee’s favor if the minimum wage is increased so high that their bosses are forced to fire them and replace them with more reliable technology?