After its simple, repetitive message of "Danger! Danger!" resonated with the Republican base, the party replaced all of its candidates with robot B-9, saving millions in campaign costs, lobbyist expenses, and the costs of litigating sexual misconduct.

TL;DR

Basically this.

This ended up being way longer than I expected. Here’s the summary:

The anti-labor right is pushing the claim that raising the minimum wage to $15/hr. will result in the fast food industry aggressively replacing workers with robots. Self-ordering kiosks are the prime example, but these are coming regardless of the wage scale. Other robots are impractical at this point and possibly ever. The “$35K robot arm” is an empty threat.

​Want the details? Please read the whole thing.

BEG FOR SCRAPS OR YOU WILL STARVE

Ed Rensi has a message for people who think workers deserve a living wage: shut the fuck up and get back to work or you’ll have no damned jobs. Mr. Rensi appointed himself the poster boy for drone strikes on the minimum wage increase with a missive published in the April 2016 issue of Forbes entitled, The Ugly Truth About A $15 Minimum Wage. In this screed, he pushes all of the debunked talking points (“it’s about young workers”) and makes sure to highlight the rise of the machines:

Instead, franchisees can absorb the cost with a change that customers don’t mind: The substitution of a self-service computer kiosk for a a full-service employee. In higher-cost European countries, these kiosks are already the norm. In 2011, the company ordered more than 7,000 of them to replace entry-level employees. They’ve been tested successfully in a number of markets in the U.S., and now the company is even testing self-serve McCafe kiosks where a customer can prepare and customize their own coffee beverage.

As evidence mounts that wage increases are not leading to massive job losses, the new “go to” talking point in the war on low-wage workers is the threat of being replaced by a robot. The threat appears to be real enough to make workers reconsider their demands for higher wages. A recent headline on that bottomless repository of impotent rage, Breitbart, announced, “Wendy’s to Roll Out Self-Serve Kiosks by End of 2016, as Wage Increases Squeeze Fast Food Companies.” The article draws a straight line between increasing demands for a $15/hr. minimum wage and increased automation.

It’s almost as if there is a coordinated campaign to push this idea.

In the Breitbart article, Wendy’s CEO Emil Brolick is quoted saying that franchise owners looking to “offset wage inflation” will seek out opportunities to reduce labor cost through automation. Despite the right-wing fear-mongering, this isn’t an issue that’s cropped up with the recent demands for a $15/hr. minimum wage. In fact, it has been an ongoing battle since the start of the industrial revolution.

The conflict between automation and wages brought the word “Luddite” into the lexicon 200 years ago when the Luddite movement tried to stop increasing automation in textile factories. Textile factory workers toiled long hours for low pay in and around dangerous moving parts, but the Luddites weren’t concerned with that particular consequence of mechanization. They were fretting about their own interests. At the end of the 17th century, the incomes of those who made cloth had become the stuff of legend. Silk weavers, in particular, made so much money that they only worked four days a week rather than six. “Saint Monday” was coined to describe an additional “sabbath” taken by silk weavers — usually spent drinking. As mechanization began to rapidly erode their livelihood, the weavers created the Luddite movement intent on destroying the new machines.

BACK TO THE FUTURE

Brolich and Rensi may be heartless dicks (or maybe not — I’m not judging) but the search for ways to reduce labor costs with mechanization isn’t something they came up with to punish workers for seeking higher wages. And that’s where this particular threat fails the hardest: whether or not minimum wage is raised, they are going to do this anyway. What does the future actually hold? Rensi is full of dark prognostications; dark and stinky, like the bullshit they are.

Rensi knows a thing or two about burger flipping. He started a McDonald’s career as a management trainee in 1966 and retired as CEO, 40 years later. He could have just gone down in history as the inventor of the Chicken McNugget, but he did so much more. With Rensi as CEO, McDonald’s grew steadily, tripling its stock price during his tenure. After he left in 1997, the stock began a steep decline, losing half its value by 2003.

It’s easy to look at this stock trajectory and see Rensi as a wizard of the QSR vertical, but the fast food industry sent Ed a message last year: it’s not 1997, dumbass. With much fanfare, Rensi came out retirement to head the BBQ chain Famous Dave’s only to be abruptly fired after 17 months. There is, in fact, ample evidence in Rensi’s own essay that he’s completely forgotten how a fast food restaurant works:

Over four million people in the U.S. are employed at “limited service” restaurants, a descriptor which includes companies like McDonald’s. If even one out of every four jobs was automated, that’s one million fewer job opportunities in a country

One out of every four is his low estimate? Really?

FAST, CHEAP, GOOD: PICK TWO

As an exercise, I did something Rensi clearly hasn’t done since 1997: I went to a McDonald’s. It was a pretty standard restaurant at about three in the afternoon — off peak. There were six employees. Two were assembling orders, one was staffing the fries station, one was staffing the drive-through, one was cleaning the dining area, and the last was the manager, flitting about making sure everything was going smoothly. At the cash registers? Nobody. The sporadic foot traffic was handled by the woman at the fry station, who would staff the register “on demand,” leaving the fry station to be temporarily tended by the manager or the drive-through staffer. The bottom line is that nobody in this restaurant was going to lose their job to a kiosk.

Admittedly, THIS waitress should have been worried about robots.

What about peak traffic times when there is likely to be a dedicated staffer on the register? Won’t those people lose their hours? Maybe some, but now we get to learn the secret of why QSRs really want ordering kiosks. (Spoiler: it’s not primarily to cut staff.)

The “Q” in “QSR” does not stand for “quality,” (as if) but rather for “quick.” Labor savings can contribute to profitability, but the real key is to attract a large volume of customers by promising to fulfill a customer’s order quickly and accurately. Quality and value are key factors, but the importance of convenience cannot be understated. While McDonald’s advertising shows us hip, attractive people enjoying McFood in a clean, well-lighted place, over half of their actual sales occur at the drive-through window.

As anyone who has used a drive-through ATM can attest, operating an interface from a vehicle can be awkward, so the drive-through is likely to continue employing a human to take orders. This raises the issue of the oft-parodied difficulty of successfully communicating your order through the intercom. Ubiquitous digital signal processing and advances in speakers and microphones have largely eliminated the distortion that rendered so many drive-through conversations incomprehensible. Still, ordering through a speaker still remains somewhat tedious and error-prone. This is where the “Extra Value Meal” contributes.

The Extra Value Meal is a type of “combo meal.” The “combo meal” package deal is one you’ll find at all sorts of restaurants. The primary idea behind this is to entice the customer to spend extra on high-margin items like fries and soft drinks by offering them at a discount when bundled with an entree. In the case of McDonald’s, you get about $3 worth of value for about $2 in actual cost. Typically, this deal is presented with a note on the menu offering the opportunity to “Add fries and a drink for only $2!”

McDonald’s took it a step further by numbering their combo meals. Instead of accepting the upsell — “Yes, I’d like fries with that” — you simply say, “I’ll have a #4 meal.” This has two advantages: it’s incredibly fast to place the order, and nearly impossible for the cashier to enter it incorrectly. It also reduces the complexity of browsing the menu thus shortening the time someone idles at the point of sale. All of these features are particularly important for improving the through-put of the drive-through. This rate is so important that the McDonald’s order-tracking system keeps track of the time it takes to process a drive-through customer and employees are evaluated on their ability to keep the line moving.

So while the Extra Value Meal increases sales volume through an economic incentive, it also increases the rate of sales and reduces costly mistakes. This latter effect is more important than the casual observer might realize.

BATTLE ROYALE WITH CHEESE

While this may be new (and hopefully interesting) information for you, it certainly shouldn’t be for Ed Rensi. After all, he created the Extra Value Meal, along with other changes that lead to the massive shift in business from walk-in to drive-through. Rensi should know that ordering kiosks are about capturing customer orders quickly and accurately so that sales volume can increase. If they result in a lower labor cost, that’s just gravy. He should also know that the option to order from a human cashier will always need to be available for a variety of reasons. Thus, we might see kiosks eliminate the need for some dedicated cashiers during peak times, but that is just a few hours each day and wouldn’t result in the job-killing reduction in workforce that Rensi warns us about. Certainly nowhere near 25%.

But if we’re going to be honest, Rensi doesn’t really care about job loss, but profit loss. He’s not letting reality interfere with his campaign to stop wage increases. That’s clear near the end of his article where he slips in this McNugget of agitprop:

I suspect that the labor organizers behind this campaign for a $15 minimum wage are less interested in helping employees, and more interested in helping themselves to dues money from their paycheck.

Welcome to capitalism, Mr. Rensi. Working in your own self-interest is supposed to be a virtue in that system. Never mind that anything that benefits unions also benefits union members. The suggestion that the supporters of the wage increase have no concern for the consequences to the actual workers is ridiculous. Workers who lose their jobs due don’t have any paycheck from which to extract any dues. Finally, if we were talking about union workers here, we wouldn’t be talking about a minimum wage law. The minimum wage protects workers who don’t have the power of collective bargaining — which is most of them in modern America.

PROMISES, PROMISES

Apparently, Ed Rensi saw this burgerbot at a trade show and rushed to Fox News to tell everyone about it.

Rensi’s crusade against a living wage continued earlier this week in an appearance on Fox Business News (where else?). This time, he sent ripples through the news media promising to replace “inefficient” employees with actual robots.

“I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry -- it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries -- it’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe.”

And now we see why — as Famous Dave’s famously discovered — Ed Rensi is not fit to run a fast food restaurant in 2016. While his marvelous $35K robot may sound like a bargain, there are certain realities about automation the he’s ignoring, probably deliberately.

Does it really work or is it just a neat idea? Fans of Dick Tracy understood the idea of a wrist-mounted communication device decades before we could make one at all, much less for mass market. This appears to have been an obvious good idea waiting for technology to catch up.



Burger-building robots are another obvious good idea, but they weren’t hobbled by a lack of microelectronics. In fact, AMF (the company that automated bowling alleys) built a robotic fast food restaurant in 1964 — two years before Rensi joined McDonald’s and fifty years before Rensi started talking about robotic fast food restaurants. So why is this still just a talking point? What happened 50 years ago? Minimum wage, adjusted for inflation was closer to $10/hr. at that time, so it wasn’t low labor costs. It was something else. I don’t know what it was, but given that they’ve had 50 years to clear the hurdles, it’s a good bet that it’s something that’s still an issue today.



While there are plenty of results searching YouTube for “burger robot,” nearly all of the videos feature prototypes or “proof of concept” demonstrations. If Rensi is talking about this Epson robot arm, you can watch it cook a burger — one burger. It’s a demonstration of their versatile robot arm, not a fully-functioning automated burger machine.

Total Cost of Ownership (TCO). A $35,000 robot doesn’t cost $35,000 — not really. After you buy it, you need to install it. You need to train your staff how to work with it, which means you may be creating a skilled position as a consequence of eliminating an unskilled position. On top of that are the skilled technicians that you will need to maintain the robot. And unlike human workers, who will go off and clean themselves as long as you pay them enough to afford running water, a robot will need a human worker to keep it sanitary. That human worker will also have to be around to resupply the robot with ingredients. When you add in the hidden costs, the savings you achieve by eliminating a low-wage worker start to dwindle.

Robots have mad skillz. Another hidden cost of automation is the cost of downtime. If you watch the 1964 video, ask yourself, “How do they keep serving food if this thing breaks?" Answer: they don’t. When your restaurant’s revenue rate drops suddenly to $0/hr., you will likely find yourself wishing that you could resume operations with assistance of a $15/hr. worker. But you can’t. You have to wait for an indefinite amount of time until a technician — who makes considerably more than $15/hr. — comes to fix the mechanical wonderbox. You have, essentially, replaced a low-skilled laborer with a highly-specialized laborer. While the TCO The amazing Coca Cola Freestyle machine is basically a complex robot that mixes softdrink flavors on demand. If you pay attention, you’ll notice that they are almost always deployed in pairs; this is to prevent a complete outage of self-serve drink service in case one fails. on this specialized worker may be quite reasonable under ordinary circumstances, it becomes quite costly if doesn’t perform. Case in point: there was much fanfare when several Chinese restaurants replaced their waitstaff with robots. This turned out to be a huge disaster, as too often, customers didn’t actually get served. The robots are now gone. Robots are stupid. Ironically, while robots can do some amazing things, there are some simple things they can’t do. I once observed a McDonald’s worker pull a hamburger patty from a bin, deem it too dry to serve, discard it, and get another. Despite years of cognitive science and artificial intelligence research, the ability to make independent subjective human judgements remains a mysterious ability. Sure, if we can turn that subjective judgement into an objective judgement — perhaps determine the minimum acceptable moisture content of a burger — we can make a machine approximate this behavior. Neural networks, genetic algorithms, and other machine learning have enhanced our ability to make automatons mimic subjective decision making, but that’s all we’re doing: faking a process we only understand empirically.

All of these impediments, and probably a few I haven’t considered, are why we haven’t already seen an automated fast food restaurant and probably won’t for some time, despite what you may have heard. A San Francisco start-up, Momentum Machines, announced its intention to open a fully robotic restaurant — in 2012. I guess it’s worth noting that while momentum is the property of matter that keep it moving when it’s already moving, it’s also responsible for keeping it motionless if it wasn’t already going anywhere. In short, I don’t think restaurant workers of the world need to fear the imminent transformation of their industry by Momentum Machines or anyone else.

Anyway, I hope that this article has better prepared you to fight for a living wage.