May 29, 2016
Robots Coming To Restaurants

Ed Rensi, former CEO of McDonalds, says a higher minimum wage will bring more robots into fast food making.

itís cheaper to buy a $35,000 robotic arm than it is to hire an employee whoís inefficient making $15 an hour bagging French fries

Rensi also says ordering Kiosks are already deployed in higher wage areas of Europe and are in limited deployment in the United States. Panera has ordering Kiosks in about 20% of their American restaurants and expect roll-out to all restaurants in a few years. In Japan Pizza Hut is rolling out robot order takers. So we do not even need a high minimum wage for mass replacement of restaurant labor.

The current McDonalds CEO, Steve Easterbrook, claims he does not expect mass labor replacement with robots when minimum wage goes to $15 per hour. But this sounds more aimed at maintaining morale than an objective assessment. The moves by Pizza Hut, Panera, and other restaurants suggest that even without higher minimum wage restaurant automation is happening and will likely accelerate The cost effectiveness of robots is rising every year. A higher minimum wage will incentivize the faster development of better restaurant-automation robots. This becomes easier to do every year due to continuous advances in computer chips and computer software.

Chinese computer equipment manufacturer Foxconn has recently replaced 60k out of 110k workers in a factory with robots. Automating factories is easier than automating restaurants. But as Ed Rensi points out, robots for restaurants are already on the market. Falling robot costs and government-mandated wage increases look set to accelerate their spread. This will ultimately lead to your ability to electronically send a recipe to a restaurant to get exactly what you want from a robotic chef.

Update: Whole Foods has just rolled out a new format of store in Los Angeles which uses less than half as many workers as existing stores. It uses a number of techniques to cut labor including kiosks. Whole Foods is preparing for the rise of California minimum wage to $15 per hour. Minimum wage increases and robotics are going to cause a huge slash in retail store and restaurant employment. I expect this to cut the employment-population ratio of the least cognitively able. Their lives are sad.

Share |      Randall Parker, 2016 May 29 11:57 AM 

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