McDonalds answers $15 minimum wage with the Big Mac ATM | Hacker News Reader

McDonalds answers $15 minimum wage with the Big Mac ATM

worldtribune.com

32 pointseplanit52 comments

"Soon the McDonald’s workers Sanders and Democrats promised would get a “fair living wage” to take customers’ orders for Big Macs “will have absolutely no wages at all courtesy of the ‘Fight for $15,’ ” Zero Hedge reported on Jan. 26."

I love how these guys spin things, truly impressive. So Bernie wanted a $15/hr minimum, but didn't even get the Democratic nomination. Hillary sorta backed $12.50/hr, but lost the election. Yet somehow the World Tribune lays the blame for some future job losses in the fast food industry at their feet? Incredible!

We are well and truly in The Zone now ...

TBH, if Zero Hedge accurately reported that the loss of wages was due to the executives who authorized the R&D for this system half of their readers would immediately denounce the site as Communist propaganda.

> TBH, if Zero Hedge accurately reported that the loss of wages was due to the executives who authorized the R&D for this system half of their readers would immediately denounce the site as Communist propaganda.

Not sure I understand; your argument is that automation is the result of sinister executive R&D?

Where are you getting "sinister" from? There's no negative implication in the GP commenter - they were literally just describing the root cause. We're on Hacker News, I think it's safe to say that automating processes/jobs is our bread-and-butter.

The issue is that someone's trying to imply that merely proposing that the US has a modest minimum wage is enough to endanger people's livelihoods. To me that's the only sinister thing here - which is basically what my original comment was hinting at.

I'd argue the root cause is the decreasing utility of unskilled labor in an increasingly automated economy. Automation is inevitable, not the result of a few executives "authorizing" R&D. Describing it that way is a gross mischaracterization.

> The issue is that someone's trying to imply that merely proposing that the US has a modest minimum wage is enough to endanger people's livelihoods.

I didn't interpret the argument that way. To me it read as: look, here's a machine replacing unskilled labor at the current minimum wage, imagine how much more common this will be if it were raised to $15? Unfortunately they didn't provide any actual economic analysis as to the answer to that question and instead just smeared a political party; very low quality article indeed.

> Yet somehow the World Tribune lays the blame for some future job losses in the fast food industry at their feet? Incredible!

I don't think anyone is blaming Bernie and Clinton, it reads to me that they're criticizing the idea of a $15 minimum wage as counterproductive. And mocking the politicians who support it, sure.

Hehe they're pretty direct with their finger-pointing so I think you're being a little charitable with your interpretation. Roast as many politicians as you want for whatever reasons you want, they usually deserve it. In this case though it's a little misplaced, and the "Democrats killed jobs" narrative is a little sneaky.

It makes so much more sense to permanently freeze wages while inflation makes its steady march. What could possibly go wrong?

Are you for real? That is not what minimum wage is - you don't just set the level once and then forget about it forever. The UK has managed to have minimum wage for decades, increasing more-or-less in line with inflation every year.

Edit: ... furthermore at least this way you get some kind of increase. As inflation makes its steady march do you think the fast-food industry (or the service industry overall) have kept up?

I think he was being sarcastic

It's silly to think this is due to a $15 an hour minimum wage. This was coming as soon as the cost of installing the thing was cheap enough to make back the difference.

Automation is coming for all jobs that do not require critical and/or dynamic thinking.

A higher minimum wage may have accelerated the process, but this would have happened regardless.

It's debatable; cheap labour could in theory have indefinitely postponed this.

But I think it is not a loss that less people take orders for burgers.

What is a loss though is there are less easy ways for people to participate in society economically.

Slavery could not have postponed this. Automation is inevitable. We would still have things like the tractor and the combine even if slavery were still permitted.

Interestingly, technology, in the form of the cotton gin, actually made slavery in America more viable. So the relationship between automation and labor demand isn't necessarily trivial.

But I would agree that it seems like in today's society, automation will indeed substantially decrease the demand for labor.

Right, if labor is cheap automation will take the form of augmenting it instead of supplanting it; think call centers instead of kiosks.

Indeed. We have had these things in Europe for a long time already. They tend to be really convenient when you are in a foreign country, since you don't need to be able to speak to them, you just press the buttons, and get what you want, without fear of the order getting "lost in translation".

And given that they are in use in thousands of restaurants in Europe, then you know that the price per machine is only going down, not up. Which means that at some point they will _always_ end up price competitive with humans, unless the humans also keep on accepting wage cuts to stay "competitive".

Forcing people into sub-poverty incomes is not a viable long term solution to this problem of low paid labour.

One of the reasons you see these in Europe is because of high employment costs (and I don't mean minimum wage alone, that one isn't particularly high in Europe).

These things are pretty common in the UK, but on the other hand in Asia I haven't seen those yet, Hong Kong, China, Philippines don't have them despite having on average huge McDonald's stores with considerably more staff and customers than the average Western European one.

It's also worth noting that you can pretty much follow the employment costs in Europe to see where are these things deployed and at any country that is below a certain threshold you won't really see those.

Service automation is a simple calculation of TCO of the automation vs wages, as long as the wages are even marginally lower than the cost of automation there is no point.

I would say tho that while I visit McDonalds maybe 3-4 times a year (I love their fries, even tho you can't get mayo in the UK anymore... because "health and safety") I much rather use the ATM than talk to the person at the counter. They can't hear/understand half of the things you say, and vice versa, orders are often taken wrong, and you some how always get stuck behind a group of 5 people that can't make up their mind.

So all in all they might also get a better customer satisfaction from automated service than from human employees.

McDonald's in China (at least in some branches in Shanghai) has automated kiosks for ordering. They're similar to the ones they've had in the UK for a while now, except that they have a way to scan a QR code from your phone's screen (commonly used for WeChat and Alipay payments via QR code).

Gas stations, if you're up for eating gas station food, have had that kind of computer ordering for many years now.

> A higher minimum wage may have accelerated the process, but this would have happened regardless.

That's precisely the point: a higher minimum wage does accelerate the problem.

Deciding whether a restaurant hires a servant or purchases a vending machine is a decision made purely on cost. If a politician decides to increase the cost of investing in a specific option (hiring a servant) to the point that the alternative option becomes the best option available to the business, that politician needs to be held accountable for his actions.

> ... that politician needs to be held accountable for his actions.

You do realize in this case the politician's action is saying "if you're going to make money off of somebody's labor, you need to pay them enough to take care of their own family.", right?

I still disagree with the premise of the article, but it sounds like you do subscribe to the belief that fair pay is killing jobs. In that case, I just have to disagree. If automation kills jobs because we don't allow businesses to make billions while their employees collect food stamps, I think I'm OK with that.

The next few years will be rough for many. Jobs are likely to be automated away en-masse, and unemployment will spike. Then maybe enough people will be upset about the situation that we'll see the rise of social programs to help people. Keeping the lower class working multiple jobs to feed and clothe their children isn't a solution.

Interesting that the article mentions Democrats. They were the ones who saw the inevitability of automation and tried to make education free to counter it in a real, long term way. The strategy of blaming immigrants instead can apparently win an election in the short term, but technology isn't going away.

Here in Austria McD recently installed the second version of ordering machines. The first one was not bad, but it was deployed inconsistently and seemed like a trial run. Now just about every McD has at least 2 of those HUGE terminals with a reasonably responsive and friendly UI. You can order gluten free options, choose ingredients for every dish, and even choose kids' meal goodies (they call that Happy Meal here). It's also integrated with their smartphone apps, so you can order in the car and then just pick it up. At the same time, they restructured many branches' service counters into two sections - one for ordering with an actual human and one for picking up your finished order. And I think they already reduced active staff by 1 or 2 in the process (for most branches).

I have to admit, it makes for a more streamlined process, and your order is always correct (or it's your fault if wrong). One downside is that staff at the takeaway counter is very stressed since there is no switching between tasks - they become handing-out-food-machines.

Imagine if you will, a modern cafeteria in one of the 48 US states during the 1950's, back when McDonald's was really just a startup with less than 100 outlets, not universally familiar.

This would be in black & white.

There were already well-established positions as handing-out-food-machines in the cafeteria serving line.

These never have been high-paying jobs, but otherwise over the decades evolving levels of stress would seem to be dependent on benevolence of owners when it comes to balancing the gradual benefits of mass production/automation with their employees.

These were usually very low stress jobs back then, so at one time there was a lot to work with.

The minimum wage is a step function -- if the employee is worth less than the minimum wage, then they get $0; if they are worth the same or even slightly more than the minimum wage, then they get only the minimum wage.

The minimum wage essentially says "It shall be unlawful to employ people if they are worth less than a prescribed amount". If they are unemployable because of the law, then welfare will make them dependent on the state, and it will make sure that they are never fully employed.

These are the real consequences to well-meaning but misguided policy.

That's a really interesting way of putting it, and it makes sense.

I'm surprised that those machines are just being set up in the US. We've had them for years here in France at most American fast-food franchises.

I go to McDonalds once every 4-6 months or so. A couple weeks ago i noticed the machines and tried them. As an old fart I prefer the human interaction, also the machines seems slower to me to get all the details of the order right. Also I don't like the extra touching a place where everybody is touching (more so in the soda machine where the button is in the same place), seems very unhygienic.

I did ask the manager if the machines meant there were less people working at the location but he told me that no, same employees as before.

People seem to think that minimum wages are some left wing idea. They're not. People not earning enough to live cost the state money. They cost it in terms of benefits (believe it or not, the cheaper option) or in terms of law-enforcement and the corrosive effects it has on your society. Paying people below a certain level is tantamount to taking government subsidies.

Where exactly that level is is a matter for debate, but everyone should stop pretending like it's a choice between "tough" and "kind".

Paying people below a certain level is tantamount to taking government subsidies.

And the flip side to that: A minimum wage higher than the market rate, is tantamount to employees taking company subsidies which inevitably is passed on to consumers via higher prices.

You won't find any argument from me that higher wages can translate into higher prices. They're separate decisions, but in the case that the principal value comes from the labour, highly linked. So changing the wage of Apple Store staff is unlikely to impact the price of an iPhone too much, whereas I agree a burger is much more likely to be materially affected.

My point is, it doesn't matter what the "market rate" is if the consumer is going to be paying the price anyway, either in terms of taxes or other effects, such as an increased probability of violent crime.

Basically, it's the difference between micro and macroeconomics.

Higher wages will translate into higher prices, until you tie wages to executive pay, make it so no executive can take home more than 80X what the average worker in the company makes - Not including salaries of excutives in the tally - then raising wages = raising their own salaries. When executive pay is tied to employees' -- you'll have surplus because they won't be able to give themselves bonuses or extra pay and will either have to grow the business and hire more employees are just keep it in the company bank vault for a rainy day.

France and Spain have had them for a while, and they're only mildly complicated. Used them twice, no complaints.

Spain has been really eye opening in terms of what's possible in big cities with cost of living. Everything here costs 1 to 3 euros, unless you're eating fancy, in which case 6-12 euros. It's nutty compared to the US. So I'm hesitant to believe we need to raise pay for unskilled, manual labor (no labor?) jobs when we pay so much for basic things (that don't come out of a trade deal or conglomerate pressuring global production to lower its cost with harmful side effects)

That said, they were just protesting in Barcelona against, of all things, tourism. Tourism! You know, the free money a city gets from charging people to stare at a building? Apparently hotel rooms raised property taxes. I'm somewhat of a dunce at tax laws, but I thought the ridiculously high tax rates for hospitality services were meant to help offset this? Either way it sucks that Joe Schmoe can't see the Sagrada Familia, and it sucks that their neighbors can't afford rent. But I think Barcelona is lame, so, meh.

Why don't they just make an app? Seems simpler.

> That said, they were just protesting in Barcelona against, of all things, tourism.

You don't live in Barcelona, isn't? The protests were against the gentrification of the city. People that live or work there are suffering the increase of costs without having any benefit.

If tourism is causing gentrification, protesting the tourism is a bit like shooting oneself in the foot economically. There are better ways to fight gentrification than blocking tourists from sightseeing.

>People that live or work there are suffering the increase of costs without having any benefit.

Some people that live or work there are suffering the increase of costs without having any benefit.

On the other hand many entrepreneurs are making millions off the tourism.

Yes, there are a lot more entrepreneurs than people that doesn't work in the tourist sector, are you serious?

Admittedly my comment was poorly worded and could be easily misunderstood.

I'm saying tourism has opened up huge opportunities for everyone. Many are opting to not take advantage of those opportunities, but it feels hard to argue that they don't benefit from tourism.

And exactly how someone that works in an office in Barcelona, an elderly or a couple that is looking for a flat can take advantage of those opportunities?

I say AMEN -- let's move to automation faster, the faster we get robots and automation the faster we will realize the need for universal basic income.. Bring on the robots so maybe we all can work 30 hours a week so more people can get hours, and have a more productive happier society, and share the leisure that a 75% or higher automated society can bring. There's plenty to go around we can choose to enrich the 80 families at the top, or spread the resources and wealth so everyone can have the necessities of life, and at least a little bit of comfort.

It was only a matter of time until fast food chains did this. I'm more shocked that they didn't do it sooner. Ordering in any language, with zero human interaction, I think society is not only primed for it, but in a weird sort of way, looking forward to it. Give it ten years and companies will starting using the fact that they employ actual people as a selling point. "Stop ordering from machines, and enjoy dinner with a real human being." Until they too are replaced by AI humanoids.....

Why isn't anybody paying attention to the fact that this is a "fake news" site without so much as a mailing address anywhere on its site?

Here's some more info on the World Tribune. Looks like the publisher was at one time associated with the Reverend Moon.

http://www.newyorker.com/magazine/2003/09/08/fit-to-print-2

>"Soon the McDonald’s workers Sanders and Democrats promised would get a “fair living wage” to take customers’ orders for Big Macs “will have absolutely no wages at all courtesy of the ‘Fight for $15,’ ” Zero Hedge reported on Jan. 26."

Because even if there were no fight for increasing wages McDonalds wouldn't automate their restaurants

They maybe would, but many years later, maybe so many, that it wouldn't even matter. Tons of people would get to keep their jobs for a little (or not so little) longer.

And you know that it will by many years later exactly why?

Perhaps governments shouldn't try so vigorously to make it expensive and legally risky to hire people?

Why is this being voted down? It is a simply a restatement of the basic economic concept that when the price of a service goes up the demand will go down. In this case the service is labor.

In general I think labor costs in Europe are higher than the US and the observation in another comment that these sorts of ordering systems are common in Europe doesn't surprise me.

The cost of labor isn't just the hourly wage, but all the associated regulations and liability that surround having a human employee. Changes in minimum wage are just the most visible cost component.

Because, as has been pointed out by most of the other comments here, this was going to happen anyway. It didn't really matter that wages went up, other than it potentially hurried it along.

this was going to happen anyway

As pointed out by other comments here, this is not happening as much in Asia where labor and regulatory costs are lower. The parent comment has a valid point. It's a balance. Higher labor and regulatory costs tilt the scales toward automation.

> this is not happening as much in Asia where labor and regulatory costs are lower.

Yet

It's still going to happen, it just isn't happening as fast. Even if you are paying a person $2 a day, a machine that costs $1 a day, and doesn't need breaks is cheaper.

This is true but not very interesting observation.

Machines and humans are not 100% substitutable. There are tradeoffs and cost is just one of those tradeoffs. Humans, for example, are pretty good at improvising when something goes wrong, not so much for machines.

When regulatory policies (including minimum wage rules) raise the cost of labor the tipping point with regard to those tradeoffs switches towards automation. It isn't a universal tipping point though. It will be different for every particular industry and job type and regulatory regime.

While automation is getting better, it is obviously not sufficient to replace humans in all situations. But if the costs of human labor go up (direct costs and indirect regulatory costs), then the tradeoff changes in favor of automation sooner and in more situations.

There is a significant difference between automation that rolls out because it provides a better solution, all other things being equal, and automation that rolls out because the regulatory environment just took human labor out of the running.

I've actually had conversations with party activists regarding the minimum wage where I asked why $15/hour?, why not $20, $25, $50? What was magic about $15? The answer was stunning. They actually wanted to go to $20, $25 or higher giving the argument that that way people would have more money to spend and it would boost the economy. They really and truly believed that there were no consequences to raising the minimum wage. That everything else would stay the same and that workers would simply have more money in their pockets. That amount of economic ignorance is stunning when coming from someone actively involved in state level party politics.

As a final note, when automation isn't available to substitute for labor and the labor costs costs up then the result is simply that the service evaporates. Suddenly there is absolutely no supply for the service/product because the regulatory regime has made it economically infeasible. For example there are businesses leaving or actively avoiding California because the labor regime is too onerous for some economic activity.

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