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McDonald’s Self-Order Kiosks an Answer to Demand for $15 an Hour

The ‘Fight for $15’ movement at McDonald’s and other fast-food restaurants is having an effect that the protesters probably didn’t count on. The demands for $15 an hour or a ‘living wage’ have motivated McDonald’s to begin mass deployment of self-order kiosks. I first wrote about these kiosks four years ago when they were in the testing phase and, apparently, they’ve been a huge success.

OK Politechs – These are automated cashiers. That’s right, these machines will take your order and your payment, but never walk off the job to demand more money, never talk back to management, never want an extra smoke break and never call in sick. The testing in Romeoville will answer some important questions for McDonald’s – Will the public want to use them? Can they perform the necessary functions while being user-friendly? Are they cost-effective?

To be cost-effective they need only cost less to purchase and maintain than the wages paid to a human. An economics blogger has some numbers on that factor that fast-food employees may not want to see.

Mish’s Global Economic Trend Analysis

    • For a location open 24 hours: The cost of human cashiers, not counting benefits, $15/hour * 24 hours * 365 days/year = $131,400
    • For a location open 6AM to Midnight: $15/hour * 18 hours * 365 = $98,550.

For the machine to be cost-effective, all it needs to do is cost less than $100,000 a year to buy and maintain.

McDonald’s has announced the kiosks will be in all their locations by 2020.

BuzzFeed – McDonald’s will roll out self-order kiosks to 1,000 stores every quarter for the next two years, according to CEO Steve Easterbrook.

The kiosks were already in roughly 3,500 US McDonald’s restaurants as of March, or about one-fourth of its domestic stores. They will be in about half of US restaurants by the end of 2018 and in all stores by 2020. McDonald’s locations in Australia, Canada, and the UK are even further along in kiosk usage.

Not only do the kiosks eliminate the need for more cashiers but sales have increased as customers using the kiosk tend to browse the menu and order more food. And I learned from personal observation at a McDonald’s in Dalhart, Texas last month that the kiosks are bilingual. I observed more than one person browse the menu in Spanish. In some parts of the country, the kiosks may even be multilingual.

Whether the kiosks are McDonald’s answer to the demand for $15 an hour or the company is just offering more ordering choices to their customers, the end result is the same. Automation means fewer employees will be needed. McDonald’s employees who marched on the company headquarters to demand $15 an hour may find themselves learning that whatever they are currently being paid is better than $0 per hour.

I’m sure it would come as a shock to the protesters to learn that the goal of a business is to make a profit, not to provide jobs that pay burger-flippers more than a Sergeant could be earning in the U.S. Army.

Unskilled labor is typically low-paying and there’s a reason for that.

As I said four years ago, people who want higher-paying jobs should look into working for the companies that sell the kiosks. Their business is taking off and will likely be doing very well in the future.

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