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TechTank

Automation accelerates in the fast food industry

Darrell M. West and Jack Karsten

Wendy’s announced on May 12 that they would begin to offer self-service kiosks to franchise owners of its fast food restaurants in late 2016. Rising labor costs were cited for the move. Wendy’s CEO Todd Penegor stated that company owned stores have seen labor costs climb between five and six percent, and that some franchises have raised prices to offset higher labor costs. Rising minimum wages in populous states like New York and California contribute to higher labor costs, as does a recovering labor market where fewer workers are looking for jobs. Both of these factors may influence a restaurant owner’s decision to install self-service kiosks. In an earlier post, we discussed how rising wages puts pressure on restaurant owners to cut costs by automating more of their operations:

“A higher minimum wage changes cost considerations for businesses seeking to automate more of their operations. Increasingly, low-skill workers will not only have to compete with each other for jobs at higher wages, but also with computers. Staying competitive in a changing job market will require workers to specialize in tasks that computers cannot easily perform.”

Read the full blog post:

“Rising minimum wages make automation more cost-effective”

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