7 AI and The Job Market

AI and Machine Learning are burgeoning new technologies, and with new technology comes cause for concern. Automation is quite disruptive to a lot of industries, and within the next few decades, many jobs will disappear as certain job tasks and skills will be automated, and many employees are justly fearful of being furloughed. Companies default to using automation because it ultimately saves them money and time.  It’s no secret that technologies have already begun to replace jobs in the fast-food industry, not unlike the automobile industry of the 1980’s. Repetitive tasks like food preparation are among the easiest to automate, and when this is coupled with rising minimum wages, it is easy to see why restaurants are using this to alleviate labor costs. The Fast Food Industry is heading towards automation, due to a labor shortage, it being technologically feasible, economically superior, and providing more satisfactory service, in spite of the absence of human interaction. Considering the aforementioned advantages, the entire Fast Food industry will adopt this new technology because it is the best choice for them to make.

AI’s capabilities overlap significantly with the tasks required for fast-food workers. Researchers Frey and Osborn created an index of jobs susceptible to automation within a research paper titled “The Future of Employment, How Susceptible are Jobs to Computerisation?”. The index considered factors like education required to perform job tasks, the nature of the job tasks, and whether or not they overlapped with a list of Automation’s limitations. Automation appears to be quite versatile, only having a few pitfalls or ‘bottlenecks’ in its design. These limitations are summarized succinctly within a branching study titled “Automation, skills use, and training” conducted by researchers Ljubica Nedelkoska and Glenda Quintini:  “… social intelligence, such as the ability to effectively negotiate complex social relationships, including caring for others or recognizing cultural sensitivities; cognitive intelligence, such as creativity and complex reasoning; and perception and manipulation, such as the ability to carry out physical tasks in an unstructured work environment” (Nedelkoska, Quintini 6). None of these incapabilities overlap with the job tasks required in most common fast-food jobs, therefore technology is highly capable of replacing those positions. According to Frey and Osborn’s index, delivery service drivers rank 322nd out of 702 to be replaced, with a 69% probability of replacement (Frey, Osborn 65). Food preparation workers have an 87% probability, ranking approximately 194th most likely out of 702 occupations (Frey, Osborn 64). Cashiers are even more likely to be replaced at 97%, ranking 50th most likely (Frey, Osborn 71). In fact, Local supermarkets like Kroger, and pharmacies like CVS have already adopted robotic cashiers. Not only economically advantageous, it will also be more efficient and offer additional incentives on top of that. Computerized cashiers are able to perform both simple and complex equations far faster and more accurately than human cashiers. Food preparation robots will curb the threat of person-to-person foodborne illnesses and ensure food is reliably prepared the same way every time, and automated drivers will adjust for traffic and arrive at their destination in the most optimal way possible. Barring downtime for maintenance and repairs, automatons will always be on and present at the workplace, 24 hours a day, 7 days a week. Restaurants won’t have to account for sick days, vacation days, showing up to work late, and breaks. Restaurants also won’t have to worry about shift schedules or being short-staffed either.

A myriad of social and economic issues are pushing fast-food chain owners to further automation. The labor shortage largely resulting from COVID-19 allowed organized labor unions to leverage corporations for raises in the minimum wage to $15. A Business Insider article titled “A $15 minimum wage would cause fast-food chains to raise prices or put workers out of jobs, a former McDonald’s CEO said” written by Grace Dean, draws a parallel between Mcdonald’s new automated drive-through technology, and labor unions’ push for wage increases. The article cites an interview with Fox Business, wherein Former Mcdonald’s CEO, Ed Rensi, illustrated the problem as a binary choice, commenting that companies would either “lift prices, or turn to automation software – and ultimately cut jobs”(Dean). Menu items are already experiencing price hikes due to the ongoing issues with the supply chain, a further increase in price will deter a lot of potential customers, bringing the corporation less revenue, and potentially leading to layoffs, potentially more so than automation would. As such, Mcdonald’s is beginning to test and slowly implement new automation technologies, and other restaurants are following suit. According to an article titled, “Restaurants prep for long-term labor crunch by turning to robots to work the fryer, shuttle food to tables”, by Kate Rogers. “Flippy”, the burger-flipping robot created by Miso Robotics, has already debuted at select White Castle and CaliBurger locations and will see wider use in the near future.  Likewise, Chipotle and Domino’s are investing in robotics companies like Nuro, a company specialized in self-driving vehicles, suggesting that they seek to replace delivery drivers. It is safe to say the entire industry is heading in this direction. Most traditional restaurant positions that handle food and money will be replaced gradually, though auxiliary positions may take their place in the form of machine maintenance and repairs, and jobs that handle the customer service aspects of fast-food, wherein social intelligence is required. Total job openings won’t decrease, as many people fear. The money saved from automation will allow restaurants to operate with a much lower overhead and daily operations cost, allowing new chains to open where they previously couldn’t due to monetary constraints. These new locations will require employees. This will offset the jobs lost, and lead to more opportunities than ever before.

However, there are some facets of food service which cannot be replaced by automation with its current capabilities. Considering Nedelkoska and Quintini’s established bottlenecks, automation technology is limited in terms of abstract thought and emotional intelligence; this would suggest that jobs wherein face-to-face interaction is required with customers are relatively safe, such as waiters, as well as managerial positions, where strong interpersonal skills are required in order deliver the best service possible. A restaurant’s standard employment structure will likely adapt around these stipulations, customer service and interaction will be the new emphasis within the restaurant structure and social skills will be a necessity for employees within this new system. Employers will allocate more human workers toward the “front” of the business, leaving the actual food preparation to the machines, as well as the handling of orders and money. This restructuring is visible today, for example, after creating self-service kiosks, Mcdonald’s had implemented a new business practice in the form of table service, which hadn’t existed before the introduction of automation. New jobs may be created around the shortcomings of automation, far less dehumanizing than the assembly-line-esque positions offered at fast-food restaurants today.

One of the biggest perceived trade-offs of removing cashiers was the lack of human interaction, however, paradoxically, customers have responded positively to the introduction of self-service kiosks rather than placing their orders with cashiers. A study conducted by Xi Y Leung, Alei Fan, and Bryan Torres titled, “Do kiosks outperform cashiers? An S-O-R framework of restaurant ordering experiences” examined the performance of self-service kiosks in a quick-service setting with the performance of cashiers, particularly internal and external responses to the methods of order taking, paying attention to the moderating role of crowdedness. The research found that kiosks outperformed cashiers in terms of customer attitudes, satisfaction, and behavioral intention, namely because customers were able to get their orders faster. However, kiosks generated far less revenue than cashiers, suggesting that cashiers were able to upsell far more during busy times. The researchers offered this as a theory as to why this was the case “Customers may experience higher levels of order anxiety when ordering food via kiosks than via cashiers, resulting in smaller ordering amounts” (Leung Torres Fan 589). This technology anxiety is likely due to customers struggling to figure out how to use the user interface on the kiosk the first time around. This adaptation hurdle will likely alleviate over time, driving revenue from kiosks up a considerable amount over time. The researchers offered a few suggestions to accelerate the process, like having service employees standing by for on-site assistance and customer support, providing easy-to-follow instructions to enhance customer confidence, strategically displaying popular menu items, as well as add-on items- which will help with upselling and generating additional revenue. However, this research also has a few limitations. Most of the participants were in their early twenties, and it also didn’t distinguish kids from adults. Younger customers and more so older customers will have a considerable effect on the rate at which orders are placed and how satisfaction is derived- older adults are far less adaptable to technological changes, which may prolong or make permanent the additional self-service components proposed by the researchers. Considering this research, self-service kiosks will effectively eliminate the need for cashiers in restaurants, but may create new positions in customer service and maintenance of the machines.

Considering all of these factors and the fast-food industry’s current trajectory, automation will be inevitable, it isn’t a question of ‘if’, but of ‘when’, and policymakers are scrambling for solutions on how to best transition into this new paradigm of work. The fast-food industry is a portent for other industries and the job market as a whole. Laws can either lessen regulations and speed up the transition to automation, leading to many furloughed fast-food workers, but added efficiency, or slow down the process, and implement pro-worker policies and ensure jobs security, which will cause companies to hemorrhage millions of dollars, and the prices of products to go up, and lead layoffs anyway. Therefore, it is best to embrace these technologies, in spite of the fear and uncertainty.

Change In Research Question: I’ve decided to alter my research question from, “How does AI Affect the Job Market?” to specifically “How does Automation Affect Fast Food Industry Jobs?”