The price of government meddling

One of my pet peeves is when I hear someone say, about a “benefit” of some sort, “but the government pays for it”.  No, the government doesn’t.  Some poor schlub from which the government has extracted tax money has paid for it.  And that goes for everything.  No matter what it is, someone pays for it.  That extends to government intrusion in the market place in which it arbitrarily sets prices.  For instance, it sets a minimum wage.  Someone is going to pay for that increase in the minimum wage.

In some states that person is the customer:

The federal government hasn’t raised the minimum wage of $7.25 an hour since 2009, putting pressure on cities and states to boost wages locally to keep up with rising living costs. The effective minimum wage has increased in 27 states and Washington, D.C., since January 2014.

Many restaurant owners say they have added surcharges because jacking up menu prices can turn off customers who are sensitive to how much a sandwich or bowl of soup should cost.  When prices do rise, “consumers often trade down in the types of menu items they order, choosing a sandwich instead of an entree, or they leave off beverages or dessert,” said Bonnie Riggs, restaurant analyst for NPD Group Inc.

As it was, the average customer check at casual-dining restaurants, which doesn’t include surcharges, rose to $14.70 last year, up nearly 11% from 2012, according to NPD.

While adding a surcharge risks turning diners away, some restaurateurs say they want customers to understand the consequences of higher wages on a business with profit margins of generally between 2% and 6%.

This is simply an easy way for politicians to pay for votes with other people’s money.  At least the votes of those who think they will benefit (to include unions). And, of course, those that are hurt the most are those who can least afford it.  But ooooh, does it feel good!

Meanwhile, more and more restaurants are hurting.  Dining out has gotten more and more expensive to where there is little argument that meals at home are much cheaper (despite the rising cost of groceries).  So we see mass closings among chains such as Chilis, Bone Fish Grill, Applebys and Ruby Tuesday, etc.  Low margins, higher wages, higher food costs and diners who are dining out less.

So let’s arbitrarily raise labor cost to $15 an hour!  Screw supply and demand.  Government and politicians, who’ve done such a bang up job of running this nation into the ground and into unrecoverable amounts of debt know best!

Enter the alternative:

A burger-flipping robot has just completed its first day on the job at a restaurant in California, replacing humans at the grill.

Flippy has mastered the art of cooking the perfect burger and has just started work at CaliBurger, a fast-food chain.

The robotic kitchen assistant, which its makers say can be installed in just five minutes, is the brainchild of Miso Robotics.

“Much like self-driving vehicles, our system continuously learns from its experiences to improve over time,” said David Zito, chief executive officer of Miso Robotics.

“Though we are starting with the relatively ‘simple’ task of cooking burgers, our proprietary AI software allows our kitchen assistants to be adaptable and therefore can be trained to help with almost any dull, dirty or dangerous task in a commercial kitchen — whether it’s frying chicken, cutting vegetables or final plating.”

CaliBurger’s observation?

More Flippy robots will be introduced at CaliBurgers next year, with the aim of installing them in 50 of their restaurants worldwide by the end of 2019.

CaliBurger say the benefits include making “food faster, safer and with fewer errors”.

And, fewer people.

Remember $15 times 0 hours is still $0.  Look for a lot more of this sort of innovation (and worker replacement) as the government continues to meddle in labor costs. And not just in restaurants.

~McQ