Retailers using automation to reduce labor costs
$15 per hour minimum wage, $4 to 5$ hour in benefits adds up while the costs of automation fall dramatically. The former is a variable cost while automation is mostly a one time fixed cost. Labor intensive service businesses have advanced beyond experiments with automation and are now rolling out various solutions. The “featured image” attached to this article is a pair of self order kiosks in a McDonald’s in St George, Utah (photo by me). Starbucks offers a mobile app that let’s patrons order products in advance for pickup when the customer enters the store. If widely adopted, this could reduce the labor needed to take orders. To the extent these steps free up labor that may then be applied to higher value services, this will be good for all. But in some situations, this may simply free up labor – reducing the number of jobs. Plus, some of the people whose jobs become automated may lack the ability to learn new higher-value skills.