McDonald's ex-CEO just revealed a terrifying reality for fast-food workers

[sm625]

The robot arm that costs $35k will cost $25k in 5 years. The automation threshold is falling. Meanwhile the government price-controlled worker that costs $20k now will cost $25k in 5 years. You can bend and stretch these numbers one way or another, but you simply cannot stop their general trajectory. Within 10 years, half of all current fast food jobs will be gone. The only solution is to let the market set wages, or simply lose even more jobs propping the cost of labor up above the automation threshold.

 

[zinfamous]

That's wonderful for a long term goal, but in the meantime, what do you do with all those who's labor simply isn't worth enough for them to sustain themselves? In the past, increased automation and increased productivity meant that jobs were eliminated and to a significant extent replaced with other ones. That's not usually true anymore, the jobs replacing the eliminated jobs are often not in the US --- that leads to high unemployment and other societal problems here.

I commented in the other thread about basic income, what's your take on those hurdles?

For decades our economy has been aiming for a more educated workforce which is needed for increasingly sophisticated tasks, research, and development. This has long been the central theory behind free public education and greater access to colleges to create a workforce more educated than the previous generation, and so on. That isn't really a secret, and obviously these ideas don't always work out perfectly, but that is the goal.

The hurdle is that students have long needed to understand that blue collar work has been on a steady decline for generations, to the point where it simply isn't a sector of employment in any real sense. Politics has often gotten in the way of this abject requirement for a better educated workforce--yes, it's great to have whiz entrepreneurs, but not everyone is a self-starting entrepreneur...but you know what those entrepreneurs need more and more? A better educated workforce with more advanced skills.

I sit in a weird realm where I like the idea of trade schools and developing useful skills like that--I still agree that "college isn't for everyone."--but also accept the plain fact that such trades have a necessarily short shelf life. Robots will be doing that. Yes, we've been hearing these things since Epcot center opened in the 60s and the Jetsons were on TV, and it was easy to become complacent in all that time, but it very much is a reality. Wait staff is disappearing in large portions of that sector as you see tablet ordering stations popping up in cafes, restaurants, and especially short-order locations like airport cafes and bars. Will you really need a mechanic that specializes in 2 or 3 makes of vehicles, or is it better to deploy repair stations with micro robots and large tools with sophisticated diagnostics that can diagnose and repair any make of vehicle that arrives...all without needing to worry about if you are getting scammed by a human that thinks, well, human thoughts. Of course there really is no need for truck drivers. They will disappear sooner than most think.

Mining? lol.

and so on.

The thing is, we should have "gotten this" a decade ago because of the very real issue you addressed: when those jobs dry up they are no longer replaced because those jobs are shipped overseas. Our economy decided long ago that these are jobs that our workers simply should not be doing. The writing has been on the wall, yet for decades we've voted along populist political lines on either side to maintain the freebies and subsidies to keep unskilled workers employed in redundant, unnecessary jobs well past their expiration. All the while, we argue that this is a noble thing to do, rather than enforce the truth of reality that the only way to fix this is to stop subsidizing jobs that really don't exist and spend that money on education and training for advanced skills. These labor sectors can't pivot not only because those replacement sectors exist overseas, but because we need to understand that those low-wage non US workers are nothing to our economy if not our robots.

And what's going to happen to those countries with an far more woeful education and infrastructure when our companies finally do replace them with robots?

 

[Jaskalas]

Who is it closed to and why?

Let's back up... is this opposite day where you take conservative positions and pretend that each man is an island of wealth and bounty if only he/she worked harder?
The subject is on the basis of labor without value. How are minimum wagers going to afford college now, let alone AFTER a robot puts them out of work?

 

[OutHouse]

This has been going on since 2011
https://www.youtube.com/watch?v=Pyrav_9Pbsc

funny how they keep pitching, untuched by human hands. sanitary this, hygine that.

unless that machine is cleaned every day and sanatized its probably has more bacteria and gross shit than a pizza joint.

seeing how often our "robotic" fancy coffee machine at work breaks down, i bet maintenance on that pizza machine is a nightmare.

 

[zinfamous]

What's hilariously stupid is that you think a change in cost per hour of at least 50% wouldn't be a catalyst for re-evaluating the value proposition of automating more processes. Perhaps at $8 per hour they looked at it as something they should investigate and evaluate, whereas for $15 per hour, it's something they actively pursue.

See my post above. If it makes you happy, consider yourself right and call this the bandaid that should have been removed quickly and painfully a decade ago.

We've been paying for low efficiency and redundancy for a long time now.

No, I don't think it's simply an issue of "We could have replaced everyone with robots 10 years ago if not for [insert crazy anti-technology oligarch conspiracy theory]!". This tech does have legit hurdles and this takes time to develop...but of course maybe if we had that educated workforce that we had been planning for sooner...we would have been there earlier? I dunno.

Point being, whether or not you are crying about this being too much too soon right now is completely irrelevant. It will be too much too soon whenever it happens. We've already been paying shitty wages for unsustainable jobs for far too long as it is. Why this support for redundancy welfare?

 

[sm625]

For decades our economy has been aiming for a more educated workforce which is needed for increasingly sophisticated tasks, research, and development. This has long been the central theory behind free public education and greater access to colleges to create a workforce more educated than the previous generation, and so on. That isn't really a secret, and obviously these ideas don't always work out perfectly, but that is the goal.

Like so many others, this is your belief. But it is not reality. Reality follows Bertrand Russell, who said:

"The scientific rulers will provide one kind of education for ordinary men and women, and another for those who are to become holders of scientific power. Ordinary men and women will be expected to be docile, industrious, punctual, thoughtless, and contented. Of these qualities, probably contentment will be considered the most important. In order to produce it, all the researches of psycho-analysis, behaviourism, and biochemistry will be brought into play.... All the boys and girls will learn from an early age to be what is called 'co-operative,' i.e., to do exactly what everybody is doing. Initiative will be discouraged in these children, and insubordination, without being punished, will be scientifically trained out of them."

"On those rare occasions, when a boy or girl who has passed the age at which it is usual to determine social status shows such marked ability as to seem the intellectual equal of the rulers, a difficult situation will arise, requiring serious consideration. If the youth is content to abandon his previous associates and to throw in his lot whole-heartedly with the rulers, he may, after suitable tests, be promoted, but if he shows any regrettable solidarity with his previous associates, the rulers will reluctantly conclude that there is nothing to be done with him except to send him to the lethal chamber before his ill-disciplined intelligence has had time to spread revolt. This will be a painful duty to the rulers, but I think they will not shrink from performing it."

The public education system is designed to produce cooperative conformists, not innovators or creators of capital, wealth, and employment.

 

[zinfamous]

funny how they keep pitching, untuched by human hands. sanitary this, hygine that.

unless that machine is cleaned every day and sanatized its probably has more bacteria and gross shit than a pizza joint.

seeing how often our "robotic" fancy coffee machine at work breaks down, i bet maintenance on that pizza machine is a nightmare.

You could probably install a self-replacing sanitary cover device that activates every hour or so, but that's probably a waste.

How about making the surface of these things out of an anti-microbial, charged polymer that uses the magic of physics and biology to repel pathogens simply through natural properties?

 

[zinfamous]

Like so many others, this is your belief. But it is not reality. Reality follows Bertrand Russell, who said:

"The scientific rulers will provide one kind of education for ordinary men and women, and another for those who are to become holders of scientific power. Ordinary men and women will be expected to be docile, industrious, punctual, thoughtless, and contented. Of these qualities, probably contentment will be considered the most important. In order to produce it, all the researches of psycho-analysis, behaviourism, and biochemistry will be brought into play.... All the boys and girls will learn from an early age to be what is called 'co-operative,' i.e., to do exactly what everybody is doing. Initiative will be discouraged in these children, and insubordination, without being punished, will be scientifically trained out of them."

"On those rare occasions, when a boy or girl who has passed the age at which it is usual to determine social status shows such marked ability as to seem the intellectual equal of the rulers, a difficult situation will arise, requiring serious consideration. If the youth is content to abandon his previous associates and to throw in his lot whole-heartedly with the rulers, he may, after suitable tests, be promoted, but if he shows any regrettable solidarity with his previous associates, the rulers will reluctantly conclude that there is nothing to be done with him except to send him to the lethal chamber before his ill-disciplined intelligence has had time to spread revolt. This will be a painful duty to the rulers, but I think they will not shrink from performing it."

The public education system is designed to produce cooperative conformists, not innovators or creators of capital, wealth, and employment.

spoken as one who refuses education. If you are going into an educational institution and are not being challenged to innovate and learn basic skills as a framework for creativity, then that institution is failing you.

If this is how you define the real institution of education, then you are a jaded sock puppet that provides zero value to a modern society.

Bertrand Russell is also speaking from within a generation where some of his arguments are based in fields that are long invalidated due to, well, gains brought through educated individuals.

 

[WHAMPOM]

These jobs are not supposed to be living wage jobs. Under 2% of the workforce in the United States works at min wage. The majority of those people are servers working for tips. Even the vast majority of FF workers made more than min wage.

Lets not forget the (20%)#2 of the American workforce that works at a poverty wage.




#2: American poverty rates are all over the place, 4.5% 15.1% 25% 35% depending on who is doing the accounting, so I rounded it off to 20%. If you are Swiss $50.00/hr or less.

 

[Darwin333]

Shrug, there are scores of engineers and companies around the world working as hard as they can to automate fast food functions. Think about the sheer size of the potential customer base if you can come up with an efficient design that "just works", is cost effective and replaces a person. Upping the minimum wage does make the current products much more attractive because of cost comparisons but regardless of minimum wage increases, they are still coming eventually.

Personally I think the cashiers will be the last to go, not the first. People generally prefer talking to other people and having someone to bitch at if their shit is wrong or cold. Actually I envision a hybrid system where you can place an order via an app on your phone or you can walk up to the person at the counter, the pizza industry has been doing this successfully for quite a while.I haven't ordered a delivery pizza from an actual person in years. To hell with calling, sitting on hold and listening to the bullshit, asking what kind of specials, placing my order and hoping they don't screw up when I can get all of that info and accurately place my order in a fraction of the time from a website/phone.

 

[Moonbeam]

The robot arm that costs $35k will cost $25k in 5 years. The automation threshold is falling. Meanwhile the government price-controlled worker that costs $20k now will cost $25k in 5 years. You can bend and stretch these numbers one way or another, but you simply cannot stop their general trajectory. Within 10 years, half of all current fast food jobs will be gone. The only solution is to let the market set wages, or simply lose even more jobs propping the cost of labor up above the automation threshold.

Yes we need a market solution. One possible area of concern is that fact that we can build an AI that does market calculations sometime in the probable near future. Having something like an AI level of intelligence myself, and calculating that most human beings actually have negative worth to society, I am pretty sure that one obvious market solution to the labor problem is the extermination of the excess. Welcome to the machine.

 

[Raizinman]

It could be more; has anyone seen the movie called: The Founder. It comes out in August but is screening around the country right now. It's the story of Ray Kroc, the found of McDonalds. It tells about how he swindled the McDonald brothers and stole their ideas and then cheated them on royalties. How Kroc cheapened ingredients on the franchises in the name of money. After seeing this movie, I don't ever want to go into a McDonalds again.

 

[flexy]

Wow! I TOTALLY expected this ex-CEO to say something ENTIRELY differently, say how he loves and supports the idea of higher min. wage.

/S

 

[flexy]

And by the way, it's not the min. wage PER SE or the robotic arm "causing the job loss", it's the CEO and other decision makers who are "causing the job losses" as a way to compensate for less profit.

Job losses or increased prices for goods/services happen only if a company doesn't want to (or can't) tolerate a loss in profit that comes with higher wages. No one "forces" McD that their profits must steadily climb (or keep steady), even in situations where they had higher expenses due to higher wages. (In theory, they could swallow a loss of profits but keep the same amt. of workers and same prices for goods). I say "in theory" since in practice of course no-one would do this.

It's THEIR decisions and only they are to blame.

 

[Sonikku]

Yes we need a market solution. One possible area of concern is that fact that we can build an AI that does market calculations sometime in the probable near future. Having something like an AI level of intelligence myself, and calculating that most human beings actually have negative worth to society, I am pretty sure that one obvious market solution to the labor problem is the extermination of the excess. Welcome to the machine.

I just hope I live long enough to see an AI invalidate the role of a CEO. Then heads are going to roll.

 

[thraashman]

And by the way, it's not the min. wage PER SE or the robotic arm "causing the job loss", it's the CEO and other decision makers who are "causing the job losses" as a way to compensate for less profit.

Job losses or increased prices for goods/services happen only if a company doesn't want to (or can't) tolerate a loss in profit that comes with higher wages. No one "forces" McD that their profits must steadily climb (or keep steady), even in situations where they had higher expenses due to higher wages. It's THEIR decisions and only they are to blame.

They'll have to compensate for even more lost profit when people like me refuse to do business with them.

 

[ivwshane]

I have said before these type of jobs are for high school or college kids. They are starter jobs where kids learn the responsibility of having a job. unfortunately it seems like many decided to just work at fast food to support families and are mad it's not working.

I feel sorry for the youth today that want jobs. At nearly every fast food place the counter is staffed with 30+yr old's.

Do you have any actual data to back up that claim? Sounds like a statement from the gut.

http://fivethirtyeight.com/features/its-getting-harder-to-move-beyond-a-minimum-wage-job/

 

[Moonbeam]

I just hope I live long enough to see an AI invalidate the role of a CEO. Then heads are going to roll.

Already there tens of thousands of genius level children in China that would put our CEOs to shame.

 

[PokerGuy]

And by the way, it's not the min. wage PER SE or the robotic arm "causing the job loss", it's the CEO and other decision makers who are "causing the job losses" as a way to compensate for less profit.

Job losses or increased prices for goods/services happen only if a company doesn't want to (or can't) tolerate a loss in profit that comes with higher wages. No one "forces" McD that their profits must steadily climb (or keep steady), even in situations where they had higher expenses due to higher wages. (In theory, they could swallow a loss of profits but keep the same amt. of workers and same prices for goods). I say "in theory" since in practice of course no-one would do this.

It's THEIR decisions and only they are to blame.

Apparently you are not familiar with the real world. If replacing the workers with robots is more efficient and cheaper (and consumer satisfaction does not suffer), they are pretty much forced to do it because their competition will. If they don't, they'll be forced out of business by others that will.

McDonalds, like most other private companies does not have the luxury of having a monopoly position where the consumer has no choice. Government agencies and a few select companies have that luxury.

 

[Moonbeam]

Do you have any actual data to back up that claim? Sounds like a statement from the gut.

http://fivethirtyeight.com/features/its-getting-harder-to-move-beyond-a-minimum-wage-job/

Who the fuck would hire anybody over thirty. Who needs people who think they might be worth something.

 

[PokerGuy]

Do you have any actual data to back up that claim? Sounds like a statement from the gut.

http://fivethirtyeight.com/features/its-getting-harder-to-move-beyond-a-minimum-wage-job/

That article shows how more older people are stuck in min-wage type jobs, and how it's getting harder for many to move up to better paying positions. Be that as it may, it doesn't fundamentally change anything about the jobs themselves: they are low paying and entry level because they require little to no prior training and very little in the way of expertise or skill. As such, supply and demand dictates low pay for that position. Entry level / low skill / low experience requirement type positions will never pay enough to comfortably sustain a person, much less a family, nor should they.

 

[ivwshane]

Who the fuck would hire anybody over thirty. Who needs people who think they might be worth something.

Why hire kids when you can hire over qualified adults who are willing to work for a minimum wage?

 

[zinfamous]

Do you have any actual data to back up that claim? Sounds like a statement from the gut.

http://fivethirtyeight.com/features/its-getting-harder-to-move-beyond-a-minimum-wage-job/

Those numbers and that article pretty much point what others have been saying here:

the guy that started as a cook at KFC 10 years ago and is still only making minimum wage, started there at age 34.

The numbers in those charts show that the minimum wage age is creeping up and up. That's exactly what I've been saying:

--As more and more low skill jobs are outsourced and automated, the few remaining outlets for these jobs are replaced by those same workers, until those jobs are also automated or replaced.

The idea is that minimum wage jobs should be for teenagers just starting out, but the state of things today doesn't really allow that to happen. You have older people working these jobs and they aren't being trapped here because the minimum wage is itself a trap--it's because they are starting these jobs at an age where they are generally past developing skills they should have developed long ago.

It is their lack of skills that has trapped them into an obsolete labor sector. And because older people have more expenses than teenagers--mortgages, families, they are naturally going to make more demands on wages. They aren't going to have the time and energy to go back to school (or go for the first time) and develop the skills necessary to get out of this sector. The problem is compounded by the fact that they are pushing out teenagers that need those jobs for 2 or 3 years while they develop basic skills and experience, and have plenty of time to develop real skills and move on to better jobs. It's a terrible cycle.

I agree with Poker Guy that when you bump up the minimum wage like this, it is only going to make automation more attractive sooner than it otherwise would have been. And that's the point.

The workers taking these jobs now have lived off of this fantasy notion that low skill work is tangible means to lead a comfortable life (granted, it's still better than in most other countries, so that's something). That hasn't been true since the ~70s. Those jobs are gone and they really have no other option, due to age and experience, to laterally move into some other low-pay position.

I would hope that with the current reality, we aren't feeding kids with this nonsense that you can first find a job like this (sorry pal, your uncle needs that job and he isn't going to be relinquishing within the next 10 years that he is replaced by a robot), and that similar low skill jobs from trade schools are a great idea more than 10 years from now.

 

[DrPizza]

I have said before these type of jobs are for high school or college kids. They are starter jobs where kids learn the responsibility of having a job. unfortunately it seems like many decided to just work at fast food to support families and are mad it's not working.

I feel sorry for the youth today that want jobs. At nearly every fast food place the counter is staffed with 30+yr old's.

Seems to me that high school and college kids are in class, usually between the hours of 8am-ish, and at least mid-afternoon. Who the hell is going to work the breakfast and lunch shifts if these jobs are "for high school or college kids."


Also, I question the psychology of the customers - given a choice of seeing a person make their burger on a grill at a mom & pop restaurant, vs. a machine spitting out food, will a lot of the public get turned off by it? I think you still need some human aspect to the creation of the product for it to broadly appeal to the masses.

 

[Moonbeam]

Why hire kids when you can hire over qualified adults who are willing to work for a minimum wage?

They get could get uppity or have the reserves to open a competing business.