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Eggs $1.39/dozen!
A guy walks into the little grocer to buy some eggs. The sign on the display case says eggs are $1.39/dozen, but there aren’t any eggs there; the case is completely empty.
Frustrated, he goes out and walks across the street to the little mom-and-pop food store on the opposite corner. They’ve got eggs, but they’re asking $2.59 a dozen. He grudgingly buys a dozen, but he pauses on the way out to grumble to the owner that the eggs are only $1.39/dozen across the street.
“So why don’t you buy them across the street?” the owner asks.
“Because they’re out,” the man replies.
“Well, when we don’t have eggs, they’re $1.39/dozen here, too,” the owner says.
How do you kill the goose that lays the golden eggs — or golden arches, in this case? You increase mandated minimum wage to the point that one of the greatest engines of entry-level job formation in history, McDonald’s Corporation, finds it cost-effect to replace unskilled kids with machines.
Fortune Magazine reports that McDonald’s will add automated ordering kiosks to another 8,000+ of their U.S. locations over the next year, more than half of their U.S. stores.
I’ve read varying statistics, but all of them put the percentage of the American workforce that held an entry-level job at a McDonald’s restaurant in the double-digit percentages: it seems likely that more than one in ten young people held a McDonald’s job early in their career. (Two of my six kids did.)
Entry-level jobs are critical. The people working them rarely have the skills to do anything else. They rarely have to earn a “living” wage, because they aren’t supporting themselves. They’re making money and learning the fundamentals of work: showing up, being punctual, following instructions, dealing with customers. Some of them also learn deeper lessons about taking on responsibility and being rewarded for it; most of them learn that they aspire to do more, and move on when they can.
McDonald’s Corporation doesn’t really love us, no matter what the advertisements suggest. They’re a business, and a well-managed one. When it stops being cost-effective to hire unskilled young people and teach them how to fish, they’ll buy machines instead. And they’ll never go back.
And someday the McDonald’s manager will patiently explain that, why yes, they pay $15/hour for entry-level positions.
They just don’t have any.
Published in Economics
A very good illustration. Unfortunately, our economically-illiterate politicians won’t understand it; and if they did they wouldn’t accept it, because it doesn’t promote their “feel-good-about-myself” agenda.
I never had to work in fast food; my entry level job was as a laborer for a home builder. I certainly wasn’t worth $15/hr when I started. If politicians insist on this silliness, a lot of jobs are going away.
Last weekend. NJ. Walmart. Four unmanned, self-scan checkout lines open. Zero manned checkout lines. Zero. Which, coincidently, is also the actual minimum wage. I’m sure those four former Walmart clerks at home on the couch instead of at work could explain it to progressives who don’t get it.
Besides, eggs are bad for you.
It is not minimum wage, it is a ban on low wage jobs. The minimum wage has never changed. It has always been zero.
This is a great post with one minor flaw: they are putting those kiosks in all of the stores, but they don’t seem to be reducing their entry level staff. The kiosks seem to be going in in addition to the current staff. It may be that in high minimum wage location they are replacing the order takers. That may even be the long term goal. But just the act of installing the kiosk is not displacing employees.
Of course, kiosk, or online ordering is getting bigger and bigger in the food service industry. Frankly, it is a lot easier and faster than dealing with the snotty teenager at the counter.
The bolded and underlined portion is critical here.
I’m sure they will. That is, after all, the whole point.
I don’t now if it is the “whole point” or not. The whole point may be to reduce costs, not displace employees 100% with technology.
Oh, they won’t displace employees 100%. That would never be cost-effective.
But kiosks are order-takers, just like the kids at the counter. So they are “hiring” order-takers — which just happen to be machines, rather than entry-level workers.
And that’s the same thing, ultimately, as firing entry-level workers.
Actually, these workers have become little more than button-pushers and cash-takers/change-makers. Customer tells them what he wants, cashier pushes corresponding button. It’s already 90% automated. It’s relegating workers to automaton status and kills initiative and thought. They should be replaced by machines.
Eggs are the perfect food.
Eggs are the perfect food.
I eat two perfectly poached eggs most days.
We have a flock of nine hens currently…
And fresh eggs are the best eggs. When we had the farm in Missouri, my family raised chickens. The things I miss most about farming — the only things I miss, really — are fresh eggs, raw milk, and meat you raised yourself.
How did you get on Ricochet with an idea like this?
Only time I go to McDonalds is between 6 and 7 a.m. and I’ve never seen a teenager in there working – even in the summer time. Those needing entry level jobs at that time in the morning have a language barrier problem. They don’t speak English.
I’d rather place an order at a kiosk. Increased productivity is an entirely good thing. If it took a minimum wage hike to bring it about, it is an entirely good thing.
You’re mistaken, but I appreciate the sentiment.
It is also more efficient. If you can place the order before getting to the location you save the time of the wait. By the time you arrive your order can be finished and you pick it up and go. The customer wins, and service to the costumer is the ultimate goal.
What I find funny about lamenting the effects of pushes to increase the minimum wage is that I don’t hear these same laments about pushes to restrict labor markets through immigration controls. Somehow one form of labor market restriction is bad and the other one is good.
It’s not at all the same thing. We have been on a 100+ year tear in industry of making existing employees more effective at their jobs through automation. It’s only the blue collar, stick in mud, luddite union big whigs who think automation is the same as firing employees.
You aren’t a union thug, are ya Hank? ;-)
That’s because they’re entirely different issues.
Let me explain that to you.
The only justification for mandating a high minimum wage is to provide workers more money. The unfortunate reality is that, in a variety of ways, the mandated high minimum wage has a negative impact on workers — and, most importantly, on the workers with the fewest options.
In contrast, while there are various reasons for being in favor of border control, the obvious — and to me and, I’m sure, many others — reason for border control is national integrity: improving the physical and cultural stability of the country. Its impact on labor, on social services, on the electorate, on crime, etc., are secondary to those things.
Also, at the risk of stating the obvious, the impact of a high minimum wage on the worker is the same as the impact of cheap illegal labor: both result in fewer entry-level jobs for unskilled Americans.
Hope that helps.
How is HO mistaken? I think what he or she is saying is that the kiosks are a good thing, despite the fact that minimum wage increased accelerated their deployment. That strikes me as exactly right on.
It’s precisely the same thing.
And note that my use of bold, italic, and underline trumps your paltry italic-plus-underline. So you lose.
Just. Like. Hitler.
I concur with your explanation, recognizing that there is probably a subset of those who join in the effort for reducing illegal immigration who do so for labor force reasons.
No, what Mr. On is saying is… hang on, let me get this right…
“If it took a minimum wage hike to bring it about, it [a minimum wage hike] is an entirely good thing.”
Emphasis mine, for clarity.
And that’s where he’s mistaken: there are a host of not good aspects to minimum wage hikes. They are almost the opposite of entirely good.
We interpret Mr. On differently them so he’ll have to clarify or not, as he sees fit. I agree with your conclusion if that’s what he meant.
And it obviously did not require the minimum wage hike since it is happening all over the place without.
I’ve met that kid but only at McD’s. Chik-fil-a won’t hire him.
Of COURSE they aren’t the same thing.
Note my addition of all caps on one word to trump your use of bold, italics, and underline.
May I ask: what do you do for a living, so I may better understand your assumptions?
That’s easy. Minimum wage increases reduce opportunities for work for unskilled/inexperienced citizens. Immigration controls increase opportunities for work for unskilled/inexperienced citizens. If one takes off his polarized glasses, he can see the difference between “Good for big business” and “Good for America”.