Robots Replacing the "Fight For $15" Crowd

When fast food workers were paid the minimum wage of around $7-$8 it made more sense to pay people rather to invest in costly technology. However, then came the "fight for $15 crowd". These were the the workers that banned together and were striking all over the country for $15 per hour

for flipping burgers. For some reason they think that a minimum wage job should support a household.

On top of this, the mandatory minimum wage has been raised as well, which increases a company's expense and squeezes its profit margins.

Now, you'd think this would "force" companies to pay workers more...but it doesn't. You can't force a company to anything. As soon as you enact a law, they simply find a work-around.

So when workers started walking off the job, striking and demanding around double their pay per hour, it became worth investing in the technology to not have to pay workers more, not have to pay benefits and not have to have the headaches of the enormous turnover and expenses of training new hires, not to mention the expenses associated with advertising to attract workers, etc.

Companies have instead chosen to go with "robots" (which are really ordering kiosks and apps that you use to place your own order) more and more because kiosks and apps don't call in sick or claim workman's comp or need healthcare, etc. and they especially don't require an hourly wage.

One such company that's making the shift is Shake Shack. Next month, they'll open up a new Manhattan location that will not have any cashiers. Everyone will either order in store at a kiosk or order on their phone app. No cash will be accepted. It will all be electronic. (By the way, that means no employee theft of money either).

There are pros and cons to this approach just like when ATMs replaced bank tellers. However, it just goes to show you that one can't "make" corporations do anything when it comes to paying people more. If they're forced to pay some more, they'll curtail their overall expenses by deploying technology and by cutting back on the human workers that they have.

The "fight for $15" crowd will never win.

Is it corporations like Shake Shack just being greedy? No. As you can imagine, when you buy a hamburger meal, there are a ton of expenses that come out of that (such as rent, utilities, payrolls, etc.). So their profits are lean...they just do well over time by doing a ton of volume. In fact, Shake Shack's overall profit margin last year was 4.70%. So they're not greedy at all.

Imagine if they had to go from paying around $10 per hour (which is what the average Shake Shack employee makes) up to $15 per hour. That would be a 50% increase in payroll expenses. What do you think that 4.70% profit margin would shrink to?

You see, many people just think that companies are loaded with almost an endless amount of money at their disposal. They view them as greedy. However, corporations like Shake Shack and others have to budget their money as well or they'd have NO profit margin at all and therefore it wouldn't be worth being in business at all. After all, the goal of every business should be to turn a profit.

If they were oozing in profits, you could say they could share more of it but then again...much of a person's pay is due to the level of skill that is required for the job and how abundant the amount of workers there are out there for that type of job.

Look at Apple. They're the most cash-rich publicly traded company on the planet. Yet they pay a sales rep anywhere between $9 and $16 depending on the location and their level of experience, etc.

The company's profit margins are so wide and their pockets so deep, I'm sure they could pay workers $50 per hour if they wanted to...yet the skill level doesn't warrant it because the phones practically sell themselves and there is an abundance of people that want to work at an Apple store. Therefore, they pay market rates.

Therefore it's not the "evil companies" that are to blame for why some workers don't have higher wages. Heck, they should stick with a company long enough, learn other skills, work their way up into management, etc. and they'll earn a livable wage.

Additionally, while their biding their time, learning additional skills and eventually promoting up...there's nothing that says they can't get a second job. I've had many of them in my lifetime and I'm sure many of my readers have as well.

The bottom line: Employees shouldn't "demand more" from their company. They should be "worth more" to the company by enhancing their skills. As they develop more skills, they separate themselves out more from the pack and can be worth more to the company because the skills they now have aren't found in abundance.

These are the things the "fight for $15 crowd" doesn't get. And unfortunately, they're going to have plenty of time to rethink their strategy as they're sitting in the unemployment line.

As usual you are 100% on target with this article. The more skills you learn, the more you will earn. That last sentence sounds like a slogan. Totally unintentional. I have been telling my children and grandchildren this forever and I will continue to stay on message because it's the truth.

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Thanks, Jim!

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