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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
LOLing out loud.
I’m going to resist the temptation to go back and figure out just how that happened. Communication is such a haphazard business.
Henry, I’m sorry that you have such expensive eggs where you live. $2.59 a dozen?
I just bought 4 dozen eggs last week, at 77 cents a dozen. It was a special, and they were out when I first stopped by, but they had the cheap eggs stocked a couple of days later.
Yes I have no bananas!
Where I live (middle of nowhere CA) these types of jobs are not done by kids but by middle age people of Hispanic descent. In fact, I have a sneaking suspicion that if my kids tried to get a job at McDonalds or someplace similar, their lack of fluency in the Spanish language would unofficially disqualify them.
I, personally, like being able to self check-out at Walmart or order by kiosk at McDonalds. But maybe I’m a curmudgeon.
Well, and avoiding the gender wars, ya got me.
When I worked at McDonald’s back in the 70s they sometimes had contests to see who on the line of cash registers could bring in the highest sales. I’m sure there were a number of important factors:
* Who was working the center cash registers
* Who was the best at customer service
* Who smiled the most
Not coincidentally, the girl who usually raked in the highest sales was also the prettiest.
Point is: customers come to a restaurant for human contact. They can usually make burgers at home and they can pick one burger joint over another. They will go where they feel they are treated right.
Negative, Ghostrider. I go in to a restaurant for good food. Here is what I want, in order of importance:
Quality food
Clean restroom
Polite and timely service
If I get the first two I’ll probably go back. I don’t go out to eat for human contact. I go out because, while I can make a burger at home, I can’t make pad kee mao at home.
The original comment started out discussing McDonalds. Personally, I don’t think you can get real hamburgers OR pad kee mao (whatever that is) at McDonalds. But I have two questions:
First, when you think of a polite machine, what do you mean? Does it smile at you and laugh at your joke, or what? Or is it one that gets uses your correct gender pronoun?
Second, if the food’s good and the service is polite and timely, and the restrooms were clean at both places, would you choose the automat over the Chick-Fil-A?
Ever been in line and the cash registers go down? Or give the clerk say 25.50$ on an order that cost 21.50$ after he’s already inputed 25$. You can watch the gears melting in their heads as they try to figure out how much change to give back.
Yes, I’ve seen that.
In their defense, I have to say that, while I’m a pretty strong math guy, I can get befuddled when I’ve been on my feet too long and I’m tired, and then find even routine numeric manipulation surprisingly difficult.
Of course, I’m old.
I’m old too. My first job involved working in retail and we made change manually pre electronic cash register. That’s definitely a lost art.
Exactly. Anyone can get confused making change, if it isn’t habit.
My concern is all of the other “art” that’s going to be lost: showing up in the morning, being on time, smiling, speaking to customers, saying thank you, being helpful, being responsible, etc., etc.
I received the worst fast food service of my life, in terms of sheer disinterested rudeness, at an out-of-town Subway restaurant. The young lady behind the counter — who was presenting herself as a young man — was silent, brusque, sloppy, and completely unfriendly.
I didn’t say anything, because I don’t. I always ask myself, in situations like that, if perhaps her dog/best friend/parent passed away that morning and she’s doing her best to cope, etc., etc. I’m usually good with the benefit of the doubt thing.
(She was, however, the inspiration for my thoughts about the laziness of the young flakes of the gender diversity movement.)
Where I live there a lot of places to get entry level jobs that teach you these skills. Western Civilization isn’t dying because McDonald’s put in ordering kiosks….
Until recently there was a really old-time chicken restaurant in a town I visit. The teenaged girls taking orders at the counter did all the arithmetic of adding up the cost of the order and giving change either in their heads or on paper (they did have a chart for the sales tax). Only the sale total was entered on the cash register (they also did not take credit cards or debit cards). That they didn’t even use a handheld calculator led me to believe the owner believed there was a benefit for the counter kids learning those arithmetic skills.
Roger on that!
Just to make it clear to everyone:
The post was about the economic principle that, if you increase the cost of a good for which a substitute exists, you will increase the attractiveness of the substitute relative to that good. As the cost/benefit ratio of the substitute becomes more favorable, substitutions will tend to become more common.
In this context, the good for which costs are being increased is the entry-level worker, and the substitute is automation (or outsourcing, depending on the industry).
This is an economic principle, not an egg principle nor a McDonald’s principle. And it’s a pretty non-controversial one.
There may be other benefits that accrue from choosing the substitute. People like me, who earn their livings by replacing people with machines, certainly have an interest in seeing that happen. And machines do a lot of things better than people do. And some people would rather deal with a machine than a person.
But there are also certainly costs associated with making employment more difficult to obtain because more previously human-filled positions are now occupied by machinery. And — and this really was the point of the post — those costs rest particularly hard on those who really aren’t very good at anything yet, and who need the simplest, lowest-skill jobs to get them started on their climb up the economic ladder.
Again, this isn’t really about McDonald’s.
Well it was perfectly clear to me! Since your mindreading skills are a bit off today, I’ll try again:
Milkchaser’s comment was predominantly about McDonalds and observations from working there. In the last three sentences he uses the word “restaurant”, which presumably he intended to apply to McD’s and similar burger establishments. The assumption he was thinking about Ruth’s Chris Steakhouse is simply not warranted.
So: When you say you look for the three things you mentioned (quality food, polite and timely service, clean restrooms) in choosing a restaurant – does that include McD’s or not? Actually, I suppose it doesn’t make any difference. Perhaps some day it’ll be possible to find all three in an automated establishment. But you said that your third priority was polite and timely service. I will rephrase my question: Is it even possible for automation to satisfy your third priority? Specifically in regard to being polite?
The last question merely: Assuming that two different fast food establishments would meet your first two criteria equally well, but one is wholly automated and the other has helpful, friendly, fast staff taking orders and giving you your order, would you have a preference? From your comments, I am assuming you’d prefer the automation. Even though humans are more likely to be helpful if you (or the machinery) make an “oops”.
Been using the MacDonalds kiosk for about 18 months now. With the exception of the occasional software update where they move things around it has been a great experience for me. They also have the online app which works pretty well: Place you order online, drive to the restaurant, park in the special parking stalls near the door, signal with the app that you have arrived, and they bring your meal out to you.
It’s a new age!
(for the grammar geeks I used an Oxford comma just to spice things up around here)
Thank you.
I’ve been an Oxford comma person for years, but recently I’ve been having doubts. Doubts, fears and qualms…
He said “Point is: customers come to a restaurant for human contact.” I don’t agree. They may go out to eat as a fun thing to do, but nobody that I know goes out to a restaurant just for human contact. It’s for the food, they don’t want to cook, they are in a hurry, don’t want to clean up a mess, etc. I suppose if you live alone it might be true. Surely Milk can let us know if by restaurant he meant just McDonalds.
Referring to my previous point in this comment, I’m making the case that I personally choose a restaurant not solely on the basis of the service. I’m primarily going for the food. Service helps. But frankly, I find the process from the time I get there to the time I eat to be tedious. Wait to get a table. Wait to get some water. Decide what to eat. Wait for it to come. Eat (the reason I’m there). Wait for the check. Give the card and wait fore it to come back. It’s tedious. Would automation help that? Sure it would. I think it’s Chili’s that has a little deal on the table so you can pay right there. I like that. Is it polite? Well, it’s not rude. Would I want an ordering kiosk at my local Thai shop? Maybe. Do I want it at McDonald’s? You better believe it. If there are two Thai places with equal quality food and an equally clean place, would I choose one over the other based on service? Of course.
This last question really depends. Now, there’s a McDonalds and a Dairy Queen in the same lot in my little town. They are not equal in terms of food, but close enough. Micky D’s has the kiosk, Dairy Queen, no. Would I choose Micky D’s over the DQ just because of the kiosk? Maybe. But you know what’d really do it for me? If I could order from an app on my phone, walk in and scan a QR code on my phone and pick up their RF ID table tents, then sit down and wait for someone to bring me the food. Yes, that’d be a game changer. And it is on it’s way.
Do not weaken, flag, or succumb.
Well, if you’re eating at a restaurant alone, bring something to read. I wouldn’t go to restaurant either just to twiddle my thumbs for most of the time.
I pretty much won’t go to a sit down restaurant by myself.
I’m one of those who values the contact more than the food. The only times I go to a sit-down restaurant alone are when I want to be near people; the rest of the time I eat at home or grab take-out or fast food. I don’t care about food. I’ll eat anything, but can happily eat the same four meals endlessly: as far as food goes, Taco Bell is as good as a real restaurant for me.
I’m a gregarious introvert: I’m alone most of the time doing an insular job that requires focus and little human interaction, but I like people and feel compelled to communicate. Occasionally I feel an urge to be in the company of others, even if I don’t engage them.
I almost always prefer counter service to drive through for that reason; I like the human contact. The only places I like point-of-sale technology over human interaction are gas pumps and ATMs, in both cases because they’re just far more physically and temporaly convenient (at-the-pump versus leaving my car to pay; ATMs available 24/7 and everywhere). I never use the self-checkout lanes at stores, and I just can’t imagine using a kiosk at a fast food place. In both cases, choosing the machine versus the human, when both are right there, would feel unnatural to me.
Clearly, your opinion cannot be trusted, based on what you’ve said here.
At the fast food place, I don’t want to talk to any of those people…
Right? And my tastes are actually
lowerbroader than that: Taco Bell is firmly in the mid-range for me.Nor do I. It isn’t communication I want from a Starbucks or Chipotle, merely proximity. Almost all of my actual communication occurs with friends, family, clients, or on-line.