Automation is coming but new laws may accelerate its adoption

This blog has long pointed out that costs of automating work functions have plummeted just as the costs of labor and benefits have escalated. Naturally, many businesses will invest in tech to lower costs.

Investments in automation were going to be happening anyway – but various labor laws are encouraging the adoption of automation more rapidly than it might otherwise occur. The result will be the loss of “starter” jobs which tend to be low skilled retail services where many of us developed our first work experiences and skills.

McDonald’s has added do-it-yourself order entry kiosks and last time I stopped at a Wendy’s, they too had gone to do-it-yourself order entry. A very large percentage of Starbuck’s orders were handled via their app – even before the pandemic hit.

Two years ago, we stopped in a restaurant in Reno, NV and we placed our orders using a tablet-like device at the table, eliminating the need for wait staff to hand out menus and then come back to take orders. Where I used to live, a local coffee shop/espresso and bakery normally had friendly staff take orders – but if they were busy, they had an iPad-based order entry system they turned to face the customer and you could make your own order.

Self service “check outs”, not common in many stores, help reduce labor costs.

Some cities, like San Francisco, have a lunch eatery where you place your order online and then enter and remove your order from a bin – the only staff work on the back end. Amazon has developed a store – and technology – that no longer has any check out staff at all. And they plan to sell that technology to other retailers.

This is a natural progression of investing in lower cost automation versus higher costs for labor and benefits. The political outcome of a $15 minimum wage is ostensibly to pay workers more – but could result in there being far fewer workers employed.