Minimum Wage or RoboChefs

Orders are speeded up at the front-end of many eateries through the use of digital kiosks, tabletop tablets and mobile phones, but there has been little displacement of workers at the back-end of food service as a result of new technology, according to Reuters.

Labor saving devices and minimum wage hikes from 2000 to 2008 did not result in a significant drop in the food service sector, according to DePaul University and the Federal Reserve Bank of Chicago.

The number of workers was slightly higher in 2015 than in 2001, according to the National Restaurant Association, which opposes minimum wage hikes. Jobs in the leisure industry will increase by 0.6 percent annually through 2024, in line with the national average, according to the Bureau of Labor Statistics.

Calls for entry level pay to be raised to $15 an hour, double the current mandated minimum pay, have been countered by food service operators and executives who have said that the fast-food industry would have to increase automation to cut costs, which would eliminate thousands of jobs. Food service entities and restaurants employ more minimum wage workers than any other sector.

According to Andrew Puzder, CEO of Carl’s Jr parent CKE Restaurants Inc. “The numbers just don’t work for raising the minimum wage this dramatically …It will kill jobs.” Already in 2016, 16 states have upped the minimum wage and some are expected to reach the $15 an hour level over the next few years.

But robotics experts, industrial engineers and restaurant owners say that automation and robots in kitchens are years away. Robots excel at calculations and precise repetitive tasks, but they cannot multitask or work safely in cramped spaces with other humans. Menu items are varied and are not amenable to automation, nor is refilling coffee mugs or tailoring a dish to a customer’s specifications

A big problem with automation in the food service sector is the cost of maintaining machines. Also, break downs bring service to a halt, frustrating customers and potentially losing business. As a result, most operators do not want to assume the investment risk.

In Silicon Valley, however, Momentum Machines has developed robots that can create gourmet burgers, and Zume Pizza raised $5.7 million in venture capital and will have robots that prepare and bake pizzas within six months.

It cost Zume $3 million to develop the first robot and, according to the company, new locations will come at a cost of $750,000 and $1 million. The pizzeria predicts fully automated labor costs to be about half that of its competitors.

Front-end ordering and payment systems remove bottlenecks at peak hours, but they have not eliminated jobs. According to Ron Shaich, CEO of Panera, if anything, they have put more pressure on back-end staff who have to prepare and deliver the food quicker and in greater volume.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

Click to comment