Around the first of December, I posted a
blog about fast food workers going on strike for a minimum wage of $15 per
hour.
Here is the link;
Actually, it was a follow-up on a blog I had written a
couple months early.
Today, I ran across an interesting web site called “The
Next Generation of Fast Food” which proves my point. Here is the link;
When the employer factors in the cost of hiring an employee, which includes the employer share of FICA taxes, and any “benefits” that may be applied, the cost may rise to as much as thirty percent of the hourly wage. But, we are dealing with the fast food industry, so limiting that to ten or fifteen percent is more reasonable than thirty percent. But, either way, at thirty percent or fifteen percent, the math favors the machine.
Let’s take it a step further. If our machine costs $15,000 the expense will be amortized over perhaps five years, lowering the cost about $3,000 per year. We may assume that the machine may need to be replaced after five years to keep up with new technology, if for no other reason. So, during that five year span the machine costs, including an amount for maintenance and repairs, perhaps $4,000 per year. The human will cost over $15,000 per year, each year. The cost of the machine wins.
But wait, there’s even more than that! The lower cost of the machine enables the owner to use better, higher quality ingredients. Vegetables can be sliced on demand, rather than in advance. Better quality, fresher, and perhaps more appetizing products may bring in more business. And then there is another fact. The machine can process your order and take your money, eliminating the need for a paid cashier. This militates in favor of the machine and against the employee still further. The machine wins, hands down.
Finally, when we consider that some folks are demanding an increase to a $15.00 per hour wage, which would essentially double the cost of human labor; it makes the machine even more economical.
One of the main issues that has recently made headlines regarding fast food jobs is that some people see them as long term “lifetime jobs” with which they expect to pay for a family living, which also appears to be the main reason why activists have been demanding a “living wage” for fast food employees. These activists have been ignoring a number of facts that date back to the origins of the fast food industry in the late 1950’s. The vast majority of such work was performed by young folks; high school and college age people who needed to make some money while in school. It was never considered to be a long-term thing unless you were an owner or manager and made commensurate money.
Unfortunately, a lot of people today are not setting their sights higher, or if they have, they have reached a decision that they should receive more money for jobs that are not considered skilled or requiring the education that usually goes with such pay scales. They are looking to get professional level pay for an entry-level job that they should have probably left years ago.
Technology is the ultimate leveler in business. It has changed almost every existing business to some extent and everyone should be aware of the fact that it will continue to do so. The methods of doing business change, but the rules don’t. Otherwise we would all be driving around with horses and buggies like folks used to do 100 years ago. The people who want more money will have to change with the times or find themselves, not only without a pay raise, but without jobs.
HERE'S AN UPDATE
The Minimum Wage Forces Low-Skill Workers to Compete
with Higher-Skill Workers.
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