Here's yet another way that employers can adapt to restricted low skilled labor supply (which we are going to get as a result of tougher immigration law enforcement).
The owner of a fast food joint in Montana's booming oil patch found himself outsourcing the drive-thru window to a Texas telemarketing firm, not because it's cheaper but because he can't find workers.
I do not believe the owner's claim. Of course the telemarketing service is cheaper. He could find the workers if he was willing to pay more than $10 per hour. He does not want to pay the market rate for labor. Um, I remember when rising market rates for labor used to be considered a good thing, not a problem. I still think rising hourly rates and wages are a good thing.
Record low unemployment across parts of the West has created tough working conditions for business owners, who in places are being forced to boost wages or be creative to fill their jobs.
John Francis, who owns the McDonald's in Sidney, Mont., said he tried advertising in the local newspaper and even offered up to $10 an hour to compete with higher-paying oil field jobs. Yet the only calls were from other business owners upset they would have to raise wages, too. Of course, Francis' current employees also wanted a pay hike.
See, he uses the telemarketing service in order to save money. He reduced his total demand for labor to avoid higher unit labor costs.
His method of saving money is a great idea which reduces the total amount of labor needed. A worker manning a drive-thru window isn't going to be busy much of the time. Picture hundreds or thousands of restaurants with drive-thru windows all using telemarketing firms to take orders. The total number of order takers could be much lower since each phone worker could be busy for a much larger fraction of the time. No time wasted waiting for a car to pull past after giving an order. No time wasted when there are no cars waiting.
This idea is great for seasonal businesses too. Different areas have seasonal rushes at different times of the year. A telemarketing order taker could work Florida restaurants in the winter and Lake Georgia New York restaurants during the summer.
Telemarketing with human order takers still uses human labor though. The next obvious step is self-serve order entry in kiosks or via PDAs and cellphones. No need to waste human labor to get order info and to accept credit card or debit card payments.
Beyond automated order taking the next step is automated food preparation. Large scale deportation of illegal aliens combined with a halt to all low skilled immigration would create economic conditions (i.e. higher priced low skilled labor) conducive to automation of food preparation. Look at hamburger cooking for example. That seems like an automatable task. Take a burger out of a refrigerated stack and via a conveyor belt place it in a cooking unit. The cooking unit could time the cooking and control the temperature for a more consistent result. What is needed to make it happen? Higher labor prices. Higher labor prices drive innovation.
|Share |||By Randall Parker at 2007 August 25 12:09 PM Economics Labor|