Minimum Wage In The Era Of The Robots

mcdonalds robot.jpg

It’s cheaper to buy a $35,000 robot than it is to hire an employee who’s inefficient making $15 an hour bagging French fries.
—Ed Rensi, former McDonalds CEO

A lot of activism happening on the minimum wage front recently. In Detroit, workers protested outside a McDonalds for a $15-an-hour minimum wage (the current in Michigan is $8.50); 40 people were arrested. And across the country, Uber drivers also pushed for a $15 minimum, under the “Day Of Disruption” protest banner.

Here’s the problem; we are poised on the edge of what some call a “2nd Machine Age.” And a key feature of this “Third Wave” of human civilization (to borrow the term coined by futurologist Alvin Toffler) is a sharp increase in automated workers.

Now, it’s not like this is something we have to worry about in 20 years, or some vague pie-in-the-sky Jetsons-type future that may or may not come to pass. No, this is going to be a huge issue in about 3-5 years maximum, impacting life in the United States and other countries around the world.

The future is now, as I’ve told you on this blog pretty much ad nauseum by this point (much more fun would be: “the past is now!” And then cowboys on dinosaurs, swing music, etc.)

And so: not only do most corporations have little-to-no interest in raising minimum wages for their workers—they are already ahead of the curve and are planning for the obsolescence of much of their human resources.

And so let us go back to McDonalds, who has recently announced (interesting timing, to be sure) that it has plans to aggressively introduce self-serve kiosks within their restaurants. The “improvements” were enumerated in a glowing, but brief, feature on CNN—all presented with the angle that the added automation would be more liberating for the consumer.

But what will happen to the workers who are replaced with the self-serve kiosks?

Some conservative sites blamed the McDonalds revamp plans on the push by workers for a higher minimum wage…but really, replacing human labor with machines was always on the table anyhow. It would have happened if the minimum wage was $8  or $15 or $5. Because, as the former CEO of McDonalds Ed Rensi recently noted, in the long run robots are just damned cheaper:

I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry—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— it’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe…

As for Uber, the startup giant has been pretty transparent in its plans to eventually ditch their human drivers for the most part and focus on self-driving vehicles. As their CEO Travis Kalanick said at the Vanity Fair Summit in October:

We’re at the very beginning stages of becoming a robotics company.

And so what is the answer, here? Tell workers to stop protesting for a higher minimum wage and other benefits because it won’t make a difference anyhow?

I don’t have any ready answers at the moment, and I realize that is somewhat unhelpful. But I will leave you with this article that very recently ran on CNET: “Robots make better salespeople than humans, study says.”