Wash. Post Blames “Minimum-Wage Offensive” For “Robot-Powered Restaurants” Of The Future

A Washington Post article headlined, “Minimum-wage offensive could speed arrival of robot-powered restaurants,” alleged that increasing the minimum wage would accelerate automation in the fast food and restaurant industries, destroying jobs in the process, despite little evidence linking minimum-wage increases to decreased employment.

In an August 17 article, The Washington Post suggested that a ballot initiative to raise the minimum wage in Washington, D.C., combined with similar efforts in cities around the country, could threaten millions of food service workers whose positions might be replaced by machines:

The industry could be ready for another jolt as a ballot initiative to raise the minimum wage to $15 an hour nears in the District and as other campaigns to boost wages gain traction around the country. About 30 percent of the restaurant industry's costs come from salaries, so burger-flipping robots -- or at least super-fast ovens that expedite the process -- become that much more cost-competitive if the current federal minimum wage of $7.25 an hour is doubled.

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Many chains are already at work looking for ingenious ways to take humans out of the picture, threatening workers in an industry that employs 2.4 million wait staffers, nearly 3 million cooks and food preparers and many of the nation's 3.3 million cashiers.

The Post's decision to label minimum-wage campaigns -- like the Fight for $15 -- as a threat to fast-food workers is confusing. The Post quotes one kitchen equipment supplier as saying, “The innovation and the automation, they're going after it even before the wages go up. Why wait?” The article admits that productivity gains and increased efficiency have led to a decline in the number of workers per store for decades, noting that McDonald's restaurants in 1966 employed “70 or 80” staff members “as opposed to the 30 or 40 there today.” The Post even cites market research showing a more than 10 percent decline in the average number of employees per fast-food restaurant over the last decade; the current federal minimum wage of $7.25 per hour has been constant since July 2009.

The truth of the matter is that raising the minimum wage has a negligible effect on employment. In February 2013, the Center for Economic and Policy Research (CEPR) published a comprehensive analysis of the relationship between employment and the minimum wage and concluded that “the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.” One study included in CEPR's analysis reviewed nearly 1,500 employment estimates from minimum-wage studies, finding that the overwhelming majority of “the most precise estimates were heavily clustered at or near zero employment effects” :

Study Shows Wage Effects Cluster at 0

A recent study from researchers at Purdue University found that increasing the minimum wage of fast-food workers to $15 per hour would only result in a 4.3 percent increase in restaurant prices. To put that in perspective, a 4.3 percent increase in the cost of a Big Mac would be roughly 20 cents.

Blaming increased wages for the adoption of so-called “labor saving technology” is misleading; employers have other costs to consider beyond entry-level wages, and the move toward automation has always been a staple of labor-intensive industries. The “burger-flipping robots” that The Post attributes to increased salaries actually already exist. Momentum Machines claims that its automated sandwich machine can produce “custom meat grinds for every single customer” at a rate of one burger every 10 seconds -- far faster than a human line cook. But, according to Business Insider, the company believes that any jobs displaced by the product will be more than made up by increased productivity in other areas:

The issue of machines and job displacement has been around for centuries and economists generally accept that technology like ours actually causes an increase in employment. The three factors that contribute to this are 1. the company that makes the robots must hire new employees, 2. the restaurant that uses our robots can expand their frontiers of production which requires hiring more people, and 3. the general public saves money on the reduced cost of our burgers. This saved money can then be spent on the rest of the economy.

It is inaccurate, but not uncommon, for media outlets to attack increases to the minimum wage with the label that they kill jobs and lead to increased service automation.