The Momentum Machines burger robot robot explained
As cities around the country are passing laws to ensure minimum wages are increased to a “living wage,” the tech industry is doing what it does best… Automating like crazy. We can soon expect drive-through fast food locations to have touch screens – or even apps on smartphones – which of course most support today. This will be coupled with automated machines on the back-end which produce the food such as hamburgers, etc.
This video is from October of 2014 but is still quite germane
The point is of course, as minimum wages increase, the high cost of the robots become more reasonable. Lets do some math. If the minimum wage is increased $2.50/hour and there are 20 workers in a restaurant working 40 hours per week or 2,000 hours per year, the additional money the fast food restaurant can save on a robotics purchase is 20*2000*$2.50 or $100,000 per year.
Lets be clear – that is just the additional cost of minimum wage. The total salaries would be $400,000 per year and add to that unemployment insurance, disability, payroll taxes, uniforms, HR, etc. and that could be an additional 25% or another $100,000.
Then there is the reduced cost of real estate commensurate with less workers – perhaps another savings of half a million to a million dollars over the life of a building?
This of course doesn’t even factor in cost increases as a result of the Affordable Care Act or Obamacare.
Bottom line? This is great news for Silicon Valley – thanks to politicians, there will be a huge increase in the number of robots and other automation sold to replace minimum wage workers. Wondering who gets the credit? President Obama seems to have started the national debate – here is his Raise the Wage website, Andrew Cuomo in NYC, the Los Angeles City Council looking for a $15/hour rate and many more.
I am sure you are thinking – boy this guy is great at pointing out problems, what about offering a solution?
Here is one. Companies pay payroll taxes when they hire workers in the US. If we want more minimum wage workers, we should eliminate all taxes and fees on the bottom rung of the employment ladder. Moreover, when we realize millions of entry-level jobs have been lost to countries which don’t charge such taxes, we can understand how charging employers to employ people is counterproductive in a globally connected economy.