. . . but it seems as though those job losses are happening anyway.
The First Street Journal has already reported on the effects of President Obama’s executive order requiring federal contractors to pay an increased minimum wage, and the results are exactly what we’ve told you they would be: employers cutting positions.
The soup and sandwich giant will be cutting down the number of cashiers in its new store design in attempt to fix its speed problems. The chain has faced criticism in the past over its slightly slower service in comparison to other fast food companies, so it was proposed to put the power of the order in the customer’s hands. Panera Chief Executive Ron Shaich said in an interview:
The dirty little secret in the food industry is one in seven orders is wrong. We’re one in ten, a little better than average. Half of those inaccuracies happen during order input.
Congress has not yet passed President Obama’s minimum wage increase, so it cannot be said that Panera Bread’s actions here are in response to such. Realistically, it looks more like Panera is trying to save money, and increase efficiency, even at the current minimum wage. Your Editor and his darling bride (of 34 years, 11 months and 19 days) ate at a Red Robin in Allentown about a year ago, and that particular restaurant already had a similar ordering system, installed on the individual tables rather than at a kiosk; customers using credit or debit cards could also pay at those stations on the tables.
And why wouldn’t such restaurants? We’ve been seeing the tend to consumer automation for decades now, with computers answering telephones; actual receptionists have gone the way of keypunch operators. Why? Because computers don’t call off sick, computers don’t get to work late, computers don’t get distracted, computers don’t complain about working conditions or ask for raises or take vacation days or require health insurance. The Red Robin at which my wife and I ate, fewer employees were needed to perform the same function — get food cooked and delivered to the customers at their tables — and that is a direct contribution to the bottom line.
So, what will the minimum wage increase for which the President has asked do, if he gets it: it will raise the cost of labor for businesses which employ people who earn less than $10.10 per hour now, and that increases the pressures on those companies to find ways to cut labor costs. We may not be able to stop the trend of places like Panera Bead and Red Robin toward ordering automation, but the President’s proposal would actually speed it up.