Wendy’s Automates with Self-Service Kiosks to Compensate for Minimum Wage Laws, Jobs Disappear

Lower-level jobs, those that require little or no skills to perform are often those most impacted by minimum wage laws. The idea is to force companies to pay employees what is considered by the government to be a minimum, or perhaps a livable wage, regardless of the value that job adds to the final product or service. What the government cannot do is mandate that a firm remain profitable regardless of the regulations placed on it including minimum wage laws.

Since firms go out of business putting all their employees out of work when they cannot generate a profit, mandating what their expenses must be for wages creates a problem for which there are few solutions. One is to find ways of automating jobs that simply do not justify payment of the government mandated minimum wage. Hence, people lose their jobs to machines.

Here's an example of what happens:

With minimum-wage hikes come job cuts. It’s Economics 101.

After New York City and California mandated $15 minimum-wage laws, fast-food chain Wendy’s reacted, announcing Thursday its plans to make available self-serving kiosks in its 6,000-plus restaurants across the country by year’s end.

In addition to using the technology to cut down on labor costs, Wendy’s President Todd Penegor noted on the company’s quarterly conference call, that some of its franchise locations have been raising prices to offset the minimum-wage increase, according to Investor’s Business Daily.

This is no surprise. Increased costs must be met by increased revenue or a reduction in costs elsewhere in the business or it eventually goes broke. Why is that so hard to understand? It goes back to the old adage that liberals think that businesses will continue to function no matter what the government does to obstruct them.

“Wendy’s Penegor said company-operated stores, only about 10 percent of the total, are seeing wage inflation of 5 percent to 6 percent, driven both by the minimum wage and some by the need to offer a competitive wage ‘to access good labor,’” IBD reported.

It’s only a matter of time until McDonald’s, Burger King and others follow suit.

There it is. And it's going to change our vernacular as well. No longer will be able to use the term “burger flippers” because there will be none left.

Source: Washington Times

Photo: Popular Resistance



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