The Daily Gamecock

Fast food strikers should be careful of consequences

Threat of unionization could cause industry to revamp in long run

This week, hundreds were striking outside of fast food locations in New York to protest low wages and a lack of unionization. Demonstrators complained of the high cost of living in New York and the lengthy time frame required to raise wages, even by a few dollars. While employees might find a way to unionize or fight for higher wages, they are possibly digging their own graves in the process.

First, one of the main reasons for low wages in the fast food industry is that entry-level restaurant jobs are not meant to be careers. There is a high turnover in the industry, and employees are always easy to acquire. For example, in 2011 McDonald’s advertised plans to hire 50,000 new employees. Instead, they hired 62,000, and more than 1,000,000 people applied for those jobs. While few would agree that earning $7.25 an hour is ideal, to employers the jobs are dispensable. Raising the minimum wage or allowing unionization would come at high cost to fast food companies that already operate on slim margins.

Even without unionization, McDonald’s created a defined contribution plan to aid those who might make an entry-level position a career. In the plan, a 5-percent investment by employees is matched by an extra 11 percent by the company (a total future value of 16 percent of wages, more than a 300-percent return). In perspective, a minimum wage employee earning $15,000 a year and investing $750 over the course of the year (5 percent), will actually have invested $2,400 (16 percent) over the course of the year to accrue interest until retirement.

What is dangerous about unionization and rising wages is the strong possibility of companies simply getting rid of entry-level employees. Many Americans are already familiar with self-checkout lines at the grocery store, so why not for fast food? McDonald’s announced plans to introduce touch-screen ordering at 7,000 European locations already.

Jobs in food preparation are not safe either. A Silicon Valley tech company, Momentum Machines, has developed a robotic system it claims can save fast food companies $90,000 per franchise per year. This tallies to savings of around $9 billion for the industry as a whole. These machines are also more sanitary. A sushi chain in Japan has already implemented such technology for its much more sophisticated line of food.

Back in 1988, the New York Times published an article stating that, because of record American employment, fast food would move to automated machines since it could not find employees to work minimum wage. While the current situation features high labor costs coupled with high unemployment, technology and robotics still win the day. Though fast food workers may yet have a few more years of employment, too much complaining may hasten their demise.


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