Even with rising wages, robot revolution skips restaurants

Wed Oct 5, 2016 8:40am EDT
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By Lisa Baertlein and Peter Henderson

LOS ANGELES/SAN FRANCISCO (Reuters) - Clamshell grills are making burger flipping obsolete at McDonald’s, Johnny Rockets and other burger chains. Digital kiosks, tabletop tablets and mobile phones are taking orders at eateries like Panera, Chili’s Grill & Bar and Domino’s. And at Silicon Valley start-up Zume, robots are being programmed to take over pizza assembly.

Such labor-saving devices have been held out as counterweights to efforts to raise the wages of the lowest paid workers in the United States. But the early evidence suggests robots and other forms of automation are merely reshaping the work of people in food service. They are not - as they have in banks, on factory floors and in other sectors - replacing them.

In spite of improvements in technology, minimum wage hikes between 2000 and 2008 caused little immediate displacement of workers by technology, especially in kitchens, according to a study by economists at the Federal Reserve Bank of Chicago and DePaul University.

There were slightly more workers per restaurant in 2015 than in 2001, according to data compiled for Reuters by the National Restaurant Association, which opposes minimum wage hikes.

And the U.S. Bureau of Labor Statistics has projected leisure industry jobs, a broad category that includes restaurants, will grow at 0.6 percent annually, keeping pace with the national average through 2024.

Automation in the restaurant industry looms large in the heated campaign to raise entry level pay to $15 an hour, more than double what U.S. federal law now mandates.

Restaurants employ more low-wage workers than any other industry, and their operators are among the most vocal opponents of minimum wage hikes. Several executives have said major pay hikes would force the fast-food industry to ramp up automation, an investment that would cost thousands of jobs.

“The numbers just don’t work for raising the minimum wage this dramatically,” said Andrew Puzder, CEO of Carl's Jr parent CKE Restaurants Inc. “It will kill jobs.”   Continued...

Customers order meals on tablets and pick up food from cubbies at Eatsa, a restaurant in the financial district of San Francisco, California, U.S., September 28, 2016. Picture taken September 28, 2016.  REUTERS/Peter Henderson