09.12.2013 1

SEIU ‘Fight for $15’ minimum wage will destroy fast food jobs

seiu-robot-fast-food-minimum-wageBy Brad Tidwell

The Service Employees International Union targets McDonalds in their “Fight for 15,” but the SEIU’s campaign could destroy the jobs they’re trying to unionize.

As we previously discussed, the SEIU’s “Fight for 15” program is not likely to ever make it into the legislative agenda. At best, it’s a quixotic and cynical publicity ploy intended to encourage people to join unions and pressure employers. The similarities to their allied movement, Occupy Wall Street, are abundant.

However often unmentioned are the potential negative side effects of raising the minimum wage – and not just when it comes to increasing unemployment. If the SEIU were to ever actually reach their $15 per hour minimum wage goal, they may find they have nobody left to unionize.

As we speak, McDonald’s is investing in infrastructure to change the way that people interact with their fast food- rather than interacting with an employee, you may be giving your order to a machine in the near future:

“McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties. The move is designed to boost efficiency and make ordering more convenient for customers.

While this program hasn’t seen significant implementation the United States yet, it’s certainly something that should be giving workers pause. And the robots aren’t just threatening the jobs of cashiers- they may soon be coming for the line cooks as well:

“No longer will they say, “He’s going to end up flipping burgers.” Because now, robots are taking even these ignobly esteemed jobs. Alpha machine from Momentum Machines cooks up a tasty burger with all the fixins. And it does it with such quality and efficiency it’ll produce ‘gourmet quality burgers at fast food prices.’

“San Francisco-based Momentum Machines claim that using Alpha will save a restaurant enough money that it pays for itself in a year, and it enables the restaurant to spend about twice as much on ingredients as they normally would — so they can buy the gourmet stuff. Saving money with Alpha is pretty easy to imagine. You don’t even need cashiers or servers. Customers could just punch in their order, pay, and wait at a dispensing window.”

This development could be the absolute death knell for fast food jobs. While experiences may vary, McDonalds isn’t exactly well known for their excellent customer service. In fact, the food chain ranks in last place in one customer satisfaction survey by the American Consumer Satisfaction Index (ASCI). So replacing the surly low-wage employee taking your order may not be something consumers even miss in the future. And a machine that isn’t going to strike, protest or create problems for the company is only looking more attractive as pressure from the SEIU increases.

One blog had this to say about the automated machines:

“Just as in other areas of Western venture — companies exist to make a profit.  If a machine can do the same thing for the same price, an owner might like it.  If it can, as the company says it can, make a better burger for the same price, s/he will start looking at a spreadsheet, especially in a low margin business.  And if it is way more productive than employees that want more in their pay than what they are actually worth economically, s/he’s going to  schedule a visit for a demonstration. “

Seeing as McDonalds is already trending towards automating, it’s a sure bet they’re already looking at these options. Increasing pressure on McDonalds isn’t likely to make them pro-union. Just like we’ve seen before, the “we hate you, so join us” mantra doesn’t engender much support from employers.

However in this case, the damage won’t just be a waste of time by the union- it may mean the end of the jobs entirely. Low skill, low income jobs are crucial to helping younger people work their way up the job ladder with experience, particularly those without college degrees. Unfortunately, it seems even fast food jobs will go the way of the elevator operator and gas station attendant. Those jobs, which were taken for granted in years past, are now all but extinct.

In our current economy, prospects for unemployed workers seeking low-skill jobs are evaporating by the second. While the “unemployment” numbers go down, those actually without work are still increasing every month. This is even more damaging to communities where the poor economy is already creating serious problems. Taking food-service jobs off the table would wreak even more untold damage on these communities.

However, this seems to be exactly what will happen if the SEIU continues their work to increase the minimum wage. And it won’t just stop with fast food- grocery checkout workers are already being replaced with self-checkout machines. Automated cleaning products already exist, and are improving in utility. As technology marches forward, jobs like these will only decrease in number as people are replaced by technology. The biggest question remaining is when that will happen.

The fastest way for companies to decide to accelerate their decision to replace people with technology is for the costs of human staff to increase disproportionately to their service. While increasing the minimum wage might benefit those who kept their jobs in the short term, it only hurts the 21.8 million people who can’t find full-time work or have given up looking. In the long term, the SEIU may find their tactic to unionize the fast food workforce succeeded, only to leave them with nobody left to join their union.

Brad Tidwell is the web editor of Americans for Limited Government.

Note: This post first appeared at the SEIU Monitor website

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