The Wall Street Journal warns today that McDonald’s–faced with lower profits and the specter of an increased minimum wage which would dramatically increase employment costs–may increasingly turn to automation. Using touch screen ordering systems can allow franchises to reduce their labor force without increasing lines or reducing customer satisfaction.
I don’t know the breakdown of McDonald’s company data, but from my experience living for many years now in Europe, it seems that McDonald’s has already taken this path here. One can order from the counter, but there is almost always a touch-screen option available. It works really well: You can linger a little more as you choose what you want and without having to face any potential language issues. You can pay with a credit or debit card and only have to interact with an employee for a few moments, when they give you your food.
Perhaps this innovation would be coming regardless of whether or not the minimum wage was going up. Businesses likely find that consumers have different preferences for how to order: Some may prefer to talk face-to-face with an employee, while others may prefer a screen. Yet surely the push to increase wages will contribute to this process. As employees get more expensive, it will make sense for businesses, whenever possible, to have fewer, more highly skilled employees.
How, exactly, this will help the teenagers and other low-skilled workers looking for their first job, which will give them much needed employment experience in addition to a paycheck, I can’t say. It seems that those truly interested in improving the economic opportunity for these populations ought to focus on lowering—not raising—the cost of employment. A higher minimum wage mandate may sound compassionate, but only if you ignore how such mandates will work in the real world.