The melancholy truth that America’s leftists, and the young people they exploit for political support, stubbornly refuse to learn is that the true minimum wage is zero. When the cost of labor is increased beyond its true value by government fiat, employers learn to make do with fewer workers.
The primary factor containing the damage from such market responses to increased labor cost is customer satisfaction. Beyond a certain point, it becomes impossible to cut jobs or productivity suffers too much. In a service-oriented business, such as food service, the customers have unhappy experiences at understaffed establishments and take their business elsewhere.
However, the CEO of one large restaurant chain warns that customers are now comfortable enough with automated systems to allow another huge round of job cuts in the near future. To put it simply, the government is pricing labor out of the market, and machines are standing ready to fill the gap.
The CEO in question, Ron Shaich of Panera Bread, didn’t really phrase this as a warning during his most recent quarterly earnings call. As reported by Business Insider, it was more like a confident prediction. “Labor is going to go down,” he said. “And as digital utilization goes up – like the sun comes up in the morning – it is going to continue to go up.”