Tuesday, November 12, 2013

The phrase "Do you want fries with that?" will not be uttered by a human being in 10 years. It will just be a button on an order pad.

When Businesses allocate their investment dollars (presumably from profits) one of the major things they look at is the price of labor relative to the price of physical capital they can deploy in their operations. Both can be assigned a dollar value on an hourly basis---how much it costs to hire, train, and offer benefits to a worker versus the use a machine/technology in a 60 minute time span.

There are lots of explicit costs (money costs) and implicit costs (how employees/customers are affected) that go into this consideration. The cost of technology to do "routine jobs"  has fallen tremendously just in the past 10 years and the closer it gets to the cost of employing a unit of human labor the more likely it is to be used as a substitute for labor.

Here is an example of "technology creep" into lower skill level of the work force.  What has happened to mid-wage manufacturing is coming to the retail/service sector.

Do we still think it is a good idea to raise the minimum wage and make it competitive with technology? The issue is more complex then is promoted in populist circles. More thought and consideration is needed on this issue than I see taking place.

Bolt Burgers: the most high-tech burger you’ll ever order, coming soon

No restaurant in D.C. has been better outfitted for the iPhone generation than the forthcoming Bolt Burgers. It is a restaurant full of screens -- touchscreen systems for ordering your food and making your drinks, tablets at every table, and a 16-foot-wide projected TV screen to watch while you wait for your order.
You can order food without having a single interaction with another human being, which, for millennials who prefer texting and online ordering through Seamless to picking up the phone, is a major plus.

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