Minimum Wage

Lessons in Wendy's New Push for Self-Service Kiosks

Market pressures were already making wages more competitive.


Credit: Random Retail / photo on flickr

Wendy's is joining the restaurant push toward automation in some customer service. The chain announced this week that it will be making self-service kiosks available to all its (primarily franchise-owned) 6,000 stores later this year. It will be up to individual franchises to decide whether to use them.

Drastic increases to minimum wages are notably a factor. Investor's Business Daily points out the chain separately has more than 200 restaurants in California and New York. Stores actually owned by Wendy's instead of franchises have seen wage inflation of between five to six percent so far. Obviously when the $15 minimum wage takes off in those two states, there will be much more.

There's another factor in the wage inflation, though, that is also contributing and worth paying attention to. Wendy's President Todd Penegor said that a need to offer more competitive wages "to access good labor" was also a contributing factor. That is to say, competitive market forces were already pushing wages for Wendy's employees upwards.

It's easy to imagine this information as a defense of raising minimum wages. Automation of these tasks might have been coming down the line anyway. In all likelihood the days were numbered for a lot of these jobs regardless of what the minimum wage might be. I've also seen comments (in social media) that even if this move eliminates thousands of jobs, that's a better outcome than to have people slaving away in occupations that can't support them financially.

But, that argument presents a blinkered, weirdly old-fashioned view of the job market as though people sit around in whatever job they manage to land for the rest of their lives, like serfs working a field. That Wendy's was facing economic market pressure that might have made it a struggle to hang on to qualified employees indicates that fast food jobs aren't the dead ends some are trying to insist. One argument against jacking up the minimum wage has been that one of the great values of these low-skill, low-paying jobs is to usher people into the marketplace. People aren't supposed to be living their lives working them. This market competition factor indicates that when Wendy's employees improve their skills, that gives them leverage to either get more money or move somewhere else and make more money.

But when those low-level jobs are eliminated, poor, unskilled laborers lose their entry points into the job market entirely. They won't even get the opportunity to learn the skills that will help them compete for better jobs. And while this technological replacement may have come into play naturally due to market forces, deliberately causing it to happen will cause more immediate harms that don't have easy solutions.