It brings me no pleasure whatsoever to be able to sit here and say: I Told Ya So!
The demands for a $15 an hour minimum wage has done exactly what we said it was going to do. It has negatively impacted the career potential of young employees who are just wanting to start out in the workforce, as well as retirees who are looking for a side gig. It is eliminating not only the positions that these people could have gotten, but it is even eliminating the companies that would have hired them.
I wish it wasn’t the case, but it is important to call these cases out as they are happening so that people remained informed. Informed people cannot deny the fact that a $15 an hour minimum wage is not a good idea!
Let’s start with automation. In 2013, when the Fight for $15 was still in its growth stage, I and others had a warning! We warned that union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with self-service alternatives or would be forced to go out of business. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real.
Earlier this month, McDonald’s announced the nationwide roll-out of touchscreen self-service kiosks. The company released a video to showcase the new customer experience. It’s striking to see employees who once would have managed a cash register now reduced to monitoring a customer’s choices at an iPad-style kiosk.
Guess what! You don’t need as many people watching the kiosk as you do on the registers! Have you ever been to Walmart? They have one person watching 8-10 self checkout registers. How easy would it be to put up 2 or 3 kiosks at the front of the lobby and replace the registers with smaller kiosks. One person monitoring 5 or 6 kiosks is not a hard thing to do!
NEW YORK (AP)
McDonald’s has started testing mobile order-and-pay after acknowledging the ordering process in its restaurants can be “stressful.”
The company says it will gather feedback from the test before launching the option nationally toward the end of the year. It says mobile order-and-pay is available at stores in Monterey and Salinas, California, and will expand to Spokane, Washington next week.
The roll-out comes as customers increasingly seek out convenience through options like online ordering or delivery. McDonald’s CEO Steve Easterbrook has noted the initial stages of visiting can be “stressful,” and the chain is making changes to improve the overall customer experience. That includes introducing ordering kiosks, which McDonald’s says can help ease lines at the counter and improve order accuracy – another frustration for customers.
It’s not just McDonald’s that has embraced job-replacing technology. Numerous restaurant chains (both quick service and full service) have looked to computer tablets as a solution for rising labor costs that won’t adversely impact the customer’s experience.
Eatsa, a fully-automated restaurant concept, now has five locations—all in cities or states that have embraced a $15 minimum wage. In a scene stolen from The Jetsons, the Starship delivery robot is now navigating the streets of San Francisco with groceries and other consumer goods. The company’s founder pointed to a rising minimum wage as a key factor driving the growth of his automated delivery business.
Can’t Afford $15 An Hour Or Automation? “Now Closed”
Of course, not all businesses have the capital necessary to shift from full-service to self-service. Which brings me to my next correct prediction: A $15 minimum wage would force many small businesses to lay off staff, seek less-costly locations, or close altogether.
Tragically, these stories—in California in particular—are too numerous to cite in detail here. They include a bookstore in Roseville, a pub in Fresno, restaurants and bakeries in San Francisco, a coffee shop in Berkeley, grocery stores in Oakland, a grill in Santa Clara, and apparel manufacturers through the state.
In September of this year, nearly one-quarter of restaurant closures in the Bay Area cited labor costs as one of the reasons for shutting down operations. Not too long ago, a California-based communications firm announced it was moving 75 call center jobs from San Diego to El Paso, Texas, citing California’s rising minimum as the “deciding factor.”
Other states are also learning the same basic economic lesson: Customers have a limit to what they will pay for service. Voters in Washington, Colorado, Maine and Arizona voted to raise minimum wages on Election Day. They were convinced of the policy’s merits after millions of dollars were spent by union advocates.
In the immediate aftermath, family-owned restaurants, coffee shops and even childcare providers have struggled to absorb the cost increase. Parents paying the cost through massively expensive childcare bills, and employees paying the cost through reduced shift hours or none at all.
The Unions Are Just Hurting The Workers In An Attempt To Get More Members
The out-of-state labor groups who funded these initiatives aren’t shedding tears over the consequences. Like their Soviet-era predecessors who foolishly thought they could centrally manage prices and business operations to fit an idealistic worldview, economic reality keeps ruining the model of all gain and no pain.
This brings me to my last correct prediction, which is that the Fight for $15 was always more a creation of the left-wing Service Employees International Union (SEIU) rather than a legitimate grassroots effort. Reuters reported last year that, based on federal filings, the SEIU had spent anywhere from $24 million to $50 million on the its Fight for $15 campaign, and the number has surely increased since then.
This money has bought the union a lot of protesters and media coverage. You can expect more of it on November 29. But the real faces of the Fight for $15 are the young people and small business owners who have had their futures compromised. Those faces are not happy ones.