Wendy’s plans to install self-serve kiosks in its more than 6,000 restaurants nationwide by year’s end as some states and localities are raising the minimum wage.
After New York state and California and various localities have having begun hiking the minimum wage, Wendy’s recent decision to increase automation to reduce labor costs comes as no surprise. Why have a worker input your order when you can do it yourself?
Besides technology to reduce labor costs, Wendy’s President Todd Penegor noted on the company’s quarterly conference call, that some of its franchise locations have been raising prices to offset the minimum-wage increase, according to Investor’s Business Daily.
“Wendy’s Penegor said company-operated stores, only about 10 percent of the total, are seeing wage inflation of 5 percent to 6 percent, driven both by the minimum wage and some by the need to offer a competitive wage ‘to access good labor,’” IBD reported.
McDonald’s, Burger King and other restaurants are likely to follow suit.
The nationwide push for businesses, including fast-food restaurants, to pay a so-called “a living wage” even to low-skilled workers will cause a backlash, ultimately increasing unemployment and more state money paid out in unemployment benefits. As the cost of doing business increases in some areas, less expensive states and localities may reap the benefits.
New York’s minimum wage for all workers rose to $9.00 per hour as of Dec. 31, 2015, and will continue to rise incrementally until it hits $15 sometime after 2020, per a state labor department schedule.
California’s minimum wage will gradually rise to $15 an hour by 2022. It’s current minimum wage of $10 per hour.
It is an inexorable economic law that nothing is ever free. Somebody pays for it some way and somehow. And advantages are often temporary.
DO YOU THINK THAT MINIMUM WAGE HIKES WILL HELP WORKERS AND/OR CONSUMERS?