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By Kitty Testa
Stock in McDonald’s Corp (MCD) rose to over $155 per share for the first time ever in trading today, on news that it will be rolling out digital ordering kiosks at 2,500 restaurants. McDonald’s calls the technology upgrades “Experience of the Future.”
McDonald’s CEO, Steve Easterbrook, insists that the kiosks do not replace employees, but rather repurposes them to providing table service. Given that in a typical McDonald’s store the labor intensive work takes place in the kitchen as opposed to taking orders and making change, having 2-3 people bringing food out to customers instead of working behind the cash register doesn’t sound the technology is going to reduce labor costs very much.
Investors’ enthusiasm in the fast food giant’s tech plans may well spring from a broader embrace of automation in the industry. The CaliBurger restaurant chain has worked with Miso Robotics to develop a robotic burger maker, and Momentum Machines has developed a robotic burger maker that can output 400 burgers in an hour. Both of these developments are taking place in California, where the minimum wage is rising and where the #FightForFifteen movement has a lot of support.
According to former CEO at McDonald’s, Ed Rensi, “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.”
This is rather simple math, but automated technology will also require human labor in calibration, repairs and maintenance. Also, given McDonald’s dedication to the fast in “fast food,” the company would need to develop contingency plans for machine down time when it occurs. Until such problems are worked out in practice, fast food will still require a lot of human labor.
Rising labor costs, which include wages, payroll taxes, workers compensation, and health insurance, will speed the march toward automation in highly competitive, low-margin industries. The true experience of the future will be one in which human tasks are performed by machines. Some of those who are busy fighting for a $15 minimum wage may also want to look into becoming programmers and mechanics who can keep their robot co-workers in good repair, because that’s where the good jobs will be.