Replacing Cashiers With Robots "Just Makes Sense" Jack-in-the-Box CEO

Mish

As minimum wages rise, so does the push to get rid of workers.

Leonard Comma, CEO of Jack-in-the-Box says the company is considering swapping some cashiers for self-ordering kiosks . "It just makes sense to consider replacing cashiers with machines as minimum wages rise," said Comma.

Jack in the Box previously tested technology such as kiosks. According to Comma, the kiosks resulted in a higher average check and helped with efficiency. But at the time Comma said the cost of installing the kiosks wasn't worth it.

Jack in the Box isn't the only fast-food chain that has considered using automation to reduce labor costs and modernize.

Wendy's announced plans to install self-ordering kiosks within a year. McDonald's is adding kiosks to 2,500 stores, though it pledged not to replace cashiers with kiosks.

"With government driving up the cost of labor, it's driving down the number of jobs," then Carl's Jr. and Hardee's CEO Andy Puzder told Business Insider in 2016. "You're going to see automation not just in airports and grocery stores, but in restaurants."

You can have $15. But it will be at the expense of hours and jobs.

Pizza Hut Delivery Vehicle

Does anyone think this thing will fly?

Mike "Mish" Shedlock

Comments (57)
No. 1-50
stillCJ
stillCJ

Editor

Toyota food vending machine on wheels? I just lost my appetite.

Taunton
Taunton

Good. This is how productivity gains work. Perhaps we can focus on using humans for jobs that only humans can do? I haven't met a single person who's job was replaced by kiosks... the workers are still there, they just do different things like delivering food and what have you. My experience is that this (automation) is actually a good thing. Long story short, if your business model depends on paying workers starvation wages, such that your employees need public assistance, you shouldn't be in business. End of story. THAT is pawning your labor expenses on the government and therefore taxpayers and bondholders (and therefore future taxpayers) and that's nothing but corporate/business welfare. It's still welfare, and while it's tempting to think of those "greedy" minimum wage workers "mooching" off Uncle Sam, the truth is that companies are simply pawning off their labor on government.

if these jobs are so worthless that it's not worth a living wage, perhaps we can find jobs that are actually worth a livable wage. Or, we can create an economic system that doesn't funnel all the wealth to the top. Because that's why wages are depressed, that's why small businesses are getting crushed, and that's why it seems that rent is always out of reach of wages. Pure monetary distortion sending all the wealth to the non productive (unearned income, investor) class instead of the productive (working, managing, earned income) class. We need more doctors, nurses, teachers, electricians, mechanics, etc... but what we don't need any more of are professional investors, hedge fund managers, stock brokers, etc... They don't add DICK to the economy. They just take. In a proper monetary/financial system their role would be as glamorous as a custodian and would earn about as much as well.

Oh well, one can dream.

FelixMish
FelixMish

Taunton, like you, I'm uncomfortable with the idea of businesses "pawning off ... labor expenses on the ... taxpayers". But I'm also uncomfortable with another viewpoint on the same thing: Taxpayers competing with businesses for hiring low-wage workers. The latter seems worse, though both viewpoints are of the same thing, presented differently. <p> With "businesses "pawning off", people are working - being productive - doing something respectable for someone. With taxpayers competing, people are being paid to be warm bodies, aren't they? <p> Absent taxpayer competition, I'd expect low-end wages to go up and automation to kick in underneath those wages, where appropriate. So. Same result, but more honest, transparent, sustainable, and efficient.

Taunton
Taunton

@felixmish You're delusional if you think anybody's competing with anybody over laborers. Right now we have a huge OVERSUPPLY of labor -- if there wasn't, why aren't wages skyrocketing?

I'm not xpecting anybody to pay starvation wages, Felix. I'm saying a permanent end to the non-livable wage. If you can't afford to hire people at a living wage, you do NOT deserve to stay in business. I don't care who is doing the paying. Bottom line is supply and demand. There is a huge supply of labor, a huge supply of capital, and the only reason that capital is because our system makes hoarding of wealth possible, and the non-productive classes (investors, rent-seekers, etc) have decided it's better to buy back stocks and do LBO's than invest in productive capacity.

The system is fucking broke, dude. I don't know where your argument is going, nor do I know how it relates to my reply, but I will say your entire premise is based on a faulty assumption, which is that their is somehow a shortage of labor, which is ridiculous. Roughly 1.5% nominal wage growth per annum suggests a labor glut, not shortage. Long story short, nobody is competing with anybody for labor.

Taunton
Taunton

And if you're insinuating that folks on welfare aren't working, that's not true at all. Most people on welfare already have a job, it just pays shit wages. Honestly, I'd like to have NO welfare at all, but only provided businesses are honest and pay honest wages, instead of the mass theft from the working class we see today.

Stuki
Stuki

@Taunton
While your argument is hard to fault, who is to say what is a “living wage?” I can’t imagine you would want to entrust the same bunch of overpaid tax feeders that decided to bail out Paulson’s old golf pals, with the task…..

Also, just as increased wealth comes from producers innovating by making more for less, it also comes from consumers innovating and getting more utility for less wages. Both processes work in parallel, and both need to be left alone equally.

Meaning, producers need to be able to build anything, anywhere, anytime, without having their costs increased by having to pay a bunch of leeches, nor their productivity destroyed by “regulatory compliance” and other pure friction.

But simultaneously, consumers need to be left alone to build anything they darned well want on their lots, park their mobile homes anywhere they fancy for whatever duration they feel like, pay anyone from anywhere in the world whatever best rate they can negotiate for drugs, medical treatment and educations/degrees. As well as buy whatever guns they feel they may need to protect their continued right to do the above…

By leaving both processes alone, productive capacity will go up, and costs will go down. Cannot be any other way. Any time anyone interferes with either one, no matter the excuse, you make people, hence society, poorer as a whole. Making ends harder to meet, and lives more miserable than they need be.

FelixMish
FelixMish

@Taunton I sure hope I'm not delusional. That would make me hard to hire. :) Anyway, if wages were crashing then, yep, that would indicate a huge oversupply of labor. But wages aren't crashing, are they? The word, "balance", comes to mind. No, it never occurred to me there's a shortage of labor. If there were, wages would go up to balance the shortage. <BR how the heck to you do paragraph breaks with this comment system???> I agree the bottom line is supply and demand. I agree there's a huge supply of labor and capital. And jobs, too. Huge supplies all around doesn't mean there's no competition. <BR> Like many I don't hold in any special high esteem investors, rent-seeker, etc. but I do know from experience that investors, at least, have an extremely hard job. Hard to be productive, that is. They live in a world where they all want to be productive. In fact, they need to be productive or they'll earn less than zero. Which if you've ever earned less than zero, you know that's an unpleasant job. Very easy job, though. :) <BR> As for whether businesses should pay a "living wage", I'm confused. I thought businesses provided products and services. Muddying up their goals sounds like a great way to introduce corruption and incompetence. (e.g. Consider weirdnesses caused by the currently popular idea that a business's goal is - wait for it - profits! :) Seriously. There exist people who believe that.) <br> No, I'm not insinuating people on welfare aren't working. Just the opposite. We agree some people working low-wage jobs get welfare. Ergo, at least some people getting welfare are working. I imagine (and could certainly be wrong) that we may disagree on the issue of "working class" and what that means. First, my idea of low-wage workers is not that they comprise a "class". And, anyway, I never bought in to this popular idea that people can only do what their "class" allows. Foo. Too many words. Sorry.

FelixMish
FelixMish

Oh. Now I remember! Send each paragraph separately! Makes perfect sense. Not.

Realist
Realist

Taunton, Felix, Stuki; all make interesting points. However, I look at it from a slightly different point of view. Skills. There is indeed an oversupply of unskilled labour. Unskilled labourers do not earn a living wage because they don’t add enough value to make it worth paying them one. At the same time there are many high paying jobs that are unfilled, due to a lack of skilled workers. This lack of skilled workers has multiple effects; it prevents business from expanding as fast as they would like to and slows down economic growth; if you could actually find all the skilled workers to fill all the empty jobs, economic growth and wage growth would improve. Technological change has been changing the job market for hundreds of years. Every single year, this means eliminating low-skilled, low-paid, unproductive jobs, with high-skilled, high-paid, productive jobs. The problem is how to transform low-skilled workers into high-skilled workers. Countries that can achieve this will have a much stronger economy, with a much higher labour participation rate. They will also have better-paid workers. On a personal note, I have been working with a charitable organization in my country (not US) to improve the skills of as many people as possible for the last 6 years. I hope to do this for many more years. I highly recommend looking for organizations within your country that are focusing on improving skill levels. It can be very rewarding and if can actually make a difference in people’s lives.

FelixMish
FelixMish

@Realist I agree with you (as is often the case) though to say there's an oversupply of unskilled and under of skilled isn't how I think of it. That posits too much mushy-ness. Under? Over? Says who? ... Instead, drill it down to, "Skilled work generally pays more than unskilled work." Your conclusions follow in any case. Curiosity: What country?

Realist
Realist

I prefer to keep my country anonymous. Yes, I am making some broad generalizations on labour and technological changes (mushy?). However, I stand by my premise that if I can help people learn the necessary skills to help them acquire a decent job, rather than remaining unemployable due to a lack of skills, then I am making a small contribution to the worker, businesses, and the country. I like your statement “skilled work pays more...”. It also pays infinitely more than zero, which is what the unskilled get when their job is automated.

JonSellers
JonSellers

The idea of a market in labor is fictitious to begin with. Labor isn't a thing. There is a market in skills. Unemployment going down doesn't automatically increase everyone's wages. It may increase the wages of a small subset of individual states who have skills in particular high demand areas, and generally for only a period of time. Likewise, wages don't automatically decline when unemployment goes up. Employers aren't loathe to cause pain to quality employees for fear of losing them. General wage and standard of living growth in the 1950's through 1990s was a brief phenomena caused by the mass unionization of the working class. Unfortunately, for most people that was a long enough period of time to think it is the normal state of affairs.

JonSellers
JonSellers

Lots of typos in the above

KidHorn
KidHorn

It's inevitable. Growing up, my parents pulled into a gas station and told the attendant what they wanted. Someone opened the hood and checked the fluids. They also cleaned the windows and checked the tire air pressure. Hard to imagine nowadays. In 25 years, my kids will be telling stories to their kids about how they walked in McDonalds and told someone called a cashier what they wanted and they handed them cash, waited a few minutes, and then someone put a tray with their food on the counter.

KidHorn
KidHorn

You people do realize, with very few exceptions, businesses exist to make money for the owners. They don't exist to make their employees happy or benefit society as a whole.

Top-GUN
Top-GUN

Living Wage,,, a RIDICULOUS concept... no such thing,, requiring businesses to pay some minimum,,, equally STUPID... You folks have obviously never run a business.

xil
xil

@FelixMish, to create a paragragh break simply hit Enter

xil
xil

and continue typing

xil
xil

interestingly, the system combines separate comments into a single comment. i'm interested in knowing the algorithm behind it

PodUK
PodUK

The solution (for Democrats) is simple: Raise taxes on wage and investment incomes, and initiate a wealth tax on net financial assets, e.g., 2% per year above for net assets above $500,000. With the proceeds, provide a "living wage" hand-out to bring all US residents, legal or otherwise, to a $31,200 per year (~ $15/hr) minimum.

PodUK
PodUK

Taunton - your comment is so riddled with misunderstandings of how an economy creates income and wealth that I am simply not willing to take the time to educate you. In general, the comments here are dissapointing

JonSellers
JonSellers

I note in the article the CEOs in question do not state what the maximum wage is that will cause them to automate the job. That's because they're lying. It's just scare tactics to maximize their own profits.

JonSellers
JonSellers

@Sechel, Why didn't all of them?

WildBull
WildBull

Employers pay what the labor market requires. When labor is made expensive by government decree, the employers that can't afford the labor go out of business or find a way to replace it. Neither is good for those that lose their jobs. The left loves it because it creates an ever larger group of people that need their "help" into lives of perpetual dependency.

RonJ
RonJ

" I'm saying a permanent end to the non-livable wage. If you can't afford to hire people at a living wage, you do NOT deserve to stay in business." How many permanently unemployed people would you like there to be? First of all there is nothing permanent. The economy moves in cycles. Watch Shark Tank or The Profit and you will find that some of the business owners had not been paying themselves a wage for various reasons. One size has never fit all.

WildBull
WildBull

So, lets put all the marginal businesses out of business, and let those low wage workers starve instead of eeking out a marginal living. Don't you get it? There is only so much stuff that the economy can produce given the capital available. The rich don't have more food, clothes, medicine, houses, schools hidden in their garages. You can't improve the general standard of living by decree or transfer of money. It does not work. It cannot work. Visit Cuba or Venezuela or some other Socialist paradise and let us know how the median income earner is faring. To increase the general standard of living, the capital stock must be increased thus improving productivity to provide more all around. No free lunch.

MissionAccomplished
MissionAccomplished

The Fed just needs to continue lowering the cost of automation until jobs improve. ZIRP to the rescue...of somebody. FFS! You can't right this stuff

JonSellers
JonSellers

@WildBull: "To increase the general standard of living, the capital stock must be increased thus improving productivity to provide more all around. No free lunch." The Chinese are increasing the capital stock hand over fist.

Ambrose_Bierce
Ambrose_Bierce

Can we teach robots to spit in my sandwich like those surly teenage kids?

WildBull
WildBull

JonSellers: their standard of living is increasing. We financialize our economy and reduced our stock of productive capital. We are getting poorer.

WildBull
WildBull

AWC: You can print money, but you can't print wealth.

WildBull
WildBull

Our wealth consists of the equipment and knowledge to produce the things that people need efficiently.

Carl_R
Carl_R

Sadly, few people understand economics, which is why we get things like the $15 minimum wage. Supply and demand teaches us that if you artificially raise the price of an item over the market rate you get more supply and less demand, resulting in a surplus. Where the commodity is labor, we give this surplus a specific name, "unemployment". In the absence of a minimum wage, there would be no unemployment. There would be a job for everyone. As the minimum wage goes higher, businesses can no longer afford to hire the least efficient employees, so groups like teens and handicapped have more difficulty finding jobs. Next, the businesses automate jobs, since the costs of hardware are fixed, and eliminate a lot of problems.

Carl_R
Carl_R

Small businesses can't afford to automate, so they become unable to compete, forcing them out of the market, and allowing the big businesses to reap excess profits. Thus, raising minimum wage harms the poor by making them unemployable, and harms small business. It helps the high income people that design, build, and maintain the automation products, and helps big business. Thus, the effect is to increase the percentage of income going to those at the top, and decrease the percentage of income going to those at the bottom. It's the single most destructive legislation for the poor that I can think of.

Carl_R
Carl_R

The most employable of those at the bottom, of course, benefit, which facilitates the delusion that this is beneficial. In fact, those that benefit, in many cases, would have moved up in their companies anyway, and their income would not have stayed at the bottom. Oh, and I would be remiss if I didn't point out that the other group harmed is consumers, who have to pay more. This provides a double harm to those at the bottom who lose their job - Now they have no job, and things cost more.

WildBull
WildBull

Carl_R: Exactly.

WildBull
WildBull

One thing that never gets mentioned with "Globalization" is the enormous capital flight.

WildBull
WildBull

Pushing the minimum wage up and up only makes it worse.

ReadyKilowatt
ReadyKilowatt

Jack-in-the-box will lose the race to the bottom when another fast food restaurant replaces their order kiosks with a QR code and an app. You want to eat our food? Download the app on the phone you paid for, not the kiosk we had to pay for.
Then the next big race to the bottom will be getting rid of the kitchen staff. Eventually fast food restaurants will look like this:
http://t.fod4.com/t/42f851cdad/c480x270_23.jpg

baldski
baldski

What is it with these guys? The price of beef doubled from 2010 to 2013 and you do not hear a peep out of them. Raise the minimum wage and they clutch the pearls and look for a fainting couch. Why no bitching when beef doubled?

WildBull
WildBull

The last paragraph above is not mine. Neither is the picture

CautiousObserver
CautiousObserver

@baldski: Why no bitching when beef doubled?

There is surprisingly little beef in many fast food burgers and the price of beef does not hurt the bottom line as badly as labor costs.

From the study below, typical fast food hamburgers are comprised of little meat (median, 12.1%):

http://www.sciencedirect.com/science/article/pii/S1092913408000622

FelixMish
FelixMish

@xil The Enter key on my machine and browser pushes the comment out. No more editing. I've assumed the algorithm involves whether there are other comments interceding. I'll push this comment out now and wait a bit before typing some more.

FelixMish
FelixMish

OK. An hour later.

DBG8489
DBG8489

@FelixMish
You are correct - if you just hit "Enter," your post will be pushed to the board.
To "paragraph" on this system use the "Enter" key in conjunction with the "Shift" key.
It isn't great but it's the best option.

DBG8489
DBG8489

@CautiousObserver

Bullshit study.

All uncooked ground beef contains various levels of water. One of the main reasons cheap ground beef shrinks so much when you cook it is because the water boils out.

The cheaper it is the more water it contains, thus the more it shrinks.

Rib eye steaks - without being ground - contain water, adipose tissue (fat), connective tissue, tendon, blood vessel, nerve tissue...etc.

Same with a whole roasted chicken, or duck, or whatever.

Advancingtime
Advancingtime

Polls show a majority of Americans support a higher minimum wage, however, raising the minimum wage will make America less competitive and slow job growth. The solution of mandating a higher minimum wage to address growing inequality sidesteps the core issues we face.

It is my feeling the many people that believe this will put more money into the consumers pocket and thus create economic growth fail to recognize it will also spark inflation and reduce opportunity. The article below delves deeper into this complex issue.

http://brucewilds.blogspot.com/2016/04/raising-minimum-wage-addresses-wrong.html

Rugar
Rugar

Machines should perform this type of labor - That's why they were developed and employees in those jobs better start looking to the future. Management will reduce expenses where it can be reduced and labor is a significant portion. I certainly would

JeanM
JeanM

Maybe we should eliminate the minimum wage so people can work for $2 an hour. That way everyone would be employed. But wait, how would they get to work if they can't pay for transportation? At $2 an hour, you have a job with lots of hours and can't afford anything. I would rather work less, get paid more and do something else with the extra time. Maybe go to school or work another part time job at a higher wage.


Global Economics

FEATURED
COMMUNITY