Well, well, well. It looks like the chickens have come home to roost for the whole “Fight for 15” crowd who have been demanding the government force companies to pay a higher minimum wage of $15 an hour.
Yes, despite years of being told how detrimental such a hike would be for our economy, these folks have continued to push for the raise, ignoring the warnings that have been issued.
Well, McDonald’s is taking a route that many predicted they would take when all of this started, and it’s bad news for young folks and inexperienced workers everywhere.
By the year 2020, McDonald’s plans to replace cashiers with full service kiosks in all American stores.
CEO Steve Easterbrook told CNBC this week his restaurant chain will roll out the self-order kiosks in 1,000 new stores each quarter.
He estimated that half of the 14,000 U.S.-based stores would have the kiosks by the end of 2018 and every location would utilize the technology by 2020. He said about 3,500 restaurants already use the automated machines, or about one-quarter of the McDonald’s U.S. portfolio.
Easterbrook added that McDonald’s locations in Canada, the United Kingdom and Australia are already “fully integrated” with the technology, while a majority of locations in France and Germany use it.
The reason behind the kiosks? According to Easterbook, McDonald’s has discovered customers “dwell” at the self-ordering stations, meaning they also buy more.
“What we’re finding is when people dwell more, they select more. There’s a little bit of an average check boost,” he said on CNBC’s “Squawk on the Street” on Monday.
Easterbrook is likely telling only some of the story here, because he doesn’t want to come out and state that a big part of the issue is the company simply cannot sustain paying their employees $15 an hour on top of all the other costs of running the business. It’s absurd to think that standing at a machine and pressing buttons would be a job worth so much money.
Jobs like McDonald’s are meant for young kids or those who want to work in food service and maybe one day be a manager or run a restaurant of their own. It’s for those who want to move up, to establish a work history. It’s not at all designed to be the kind of job one does for an extended period of time.
This is part of the reason it’s sort of tragic to see these jobs go. Young people who have no work experience will now have a harder time finding jobs to help them get established.
A high minimum wage takes extra cash away from the business owner, forcing them to raise prices on goods and services to make up for the additional cost. This lack of extra profit results in less production or in stagnation where a company cannot afford to expand and ends up stuck in a rut, unable to move beyond their current point of success.
The ripple effects of this are enormous. If companies can’t expand, or worse, go out of business due to this hike, that impacts the overall job market causing it to plummet. More people out of work means less tax dollars to fund the government and needed services.
Prices go up, economic prosperity goes down. This is bad, bad, bad.
Unfortunately, liberals don’t seem to grasp fundamental economics all that well.
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