This page has been archived and commenting is disabled.
The Biggest Threat To Minimum Wage Restaurant Workers Everywhere?
Over the past year, unionized restaurant workers across numerous fast-food chains but mostly at McDonalds, expressed their dissatisfaction with compensation levels by striking at increasingly more frequent intervals - a sentiment that has been facilitated by the president himself and his ever more frequent appeals for a raise in the minimum wage. Unfortunately, as we have pointed out previously, in the context of corporations that have given up on growing the top line (as virtually all free cash goes into stock buybacks and dividends and none into growth capex), and in pursuit of a rising bottom line, employee wages are the one variable cost that corporations will touch last of all. But what's worse, these same unionized employees have zero negotiating leverage.
Perhaps nowhere is this more visible than in the recent strategy of smoothie retailer Jamba Juice, which in order to battle a 4% drop in Q3 same store sales has decided to radically transform its entire retailing strategy by getting rid of labor, cheap, part-time or otherwise, altogether. Presenting the biggest threat to minimum-wage restaurant workers everywhere: the JambaGo self-serve machine that just made the vast majority of Jamba's employees obsolete. Coming soon to a fast-food retailer near you.
Why did Jamba just make its retail sales force obsolete? Part of the problem is heightened competition: McDonald’s has entered the smoothie market, and others like Dairy Queen and Panera spent the summer promoting their rival drinks. Which means even less top-line growth potential. It also means that in order to push more of the top line straight to earnings, and bypass variable costs, a problem that will be faced by increasingly more corporations, Jamba's corner office had no choice but to unleash JambaGo.
The smoothie chain is hoping to see improvement from something it calls “JambaGo,” a self-serve machine that can be installed in cafeterias, schools, and convenience stores. Jamba Juice makes money by selling the prepackaged, pre-blended smoothie ingredients to JambaGo vendors, like a soda maker selling syrup to the owner of a soda fountain. The advantages: Jamba doesn’t need to build a store and the labor costs are much lower compared with hiring staff to concoct made-to-order drinks.
The company expects this model to help expand its brand more quickly and cheaply. Last quarter, however, revenue from the JambaGo program amounted to just about $400,000. But having recently landed a deal with Target (TGT) to put JambaGo machines in 1,000 Target Cafés, the company will soon have installed more than 1,800 machines (up from only 404 at the start of 2013). By contrast, there are currently about 850 Jamba Juice stores.
Based on a goal of $2,000 in annual revenue per JambaGo, the rough math for 1,800 machines is $3.6 million—a decent boost for a company that took in $228.8 million in revenue last year. Another 1,000 are planned for 2014, which would bring in another $2 million in annual revenue.
Here's what happens next: Jamba will do what every other company does to demonstrate that its radical strategy is successful - fudge the numbers and beat EPS for several quarters. This will happen even if JambaGo is ultimately yet another loss leader. However, its peers will watch closely and soon decide to roll out their own version of just this: a self-contained dispenser of a la carte prepared fast-food food, either liquid or solid, and in the process let go tens of thousands of their own minimum-wage employees, also known to shareholders as "costs."
What happens after that should be clear to everyone: more unemployment, lower wages for the remaining employees, worse worker morale, but even higher profits to holders of capital. And so on. Because in a world in which technology makes the unqualified worker utterely irrelevant, this is what is known as "progress."
»
- 33893 reads
- Printer-friendly version
- Send to friend
- advertisements -
Pretty much like those many self-serve Frozen Yogurt stores all over the place. One employee to be cashier, one to restock the goodies. That's all.
Similar thing in New York with the upscale vending machines showing up. The front end is a vending machine, while a handful of employees are in the back prepping the food. No front end cashiers needed. That will only expand to any place that has enough volume.
Used to be very popular...
....called Automats
http://www.brainyhistory.com/events/1991/april_10_1991_164921.html
That's what I was thinking
I'm sure that " JambaGo" machine has all the latest NSA spy gear to make your juicing experience SAFE.
I wonder if it mails you a ticket if you exceed your daily caloric uptake allowance on Obungacare?
i can only think of vonnegut's player piano
Oh, please... ATM machines, airport kiosk check-in, commuter train ticket machines, self-checkout machines, any kind of vending machine, Priceline.com, Hotwire.com, Amazon.com, you guys are living in the 20th century. As if the jobs being eliminated are minimum wage--most of these retailers have to pay over min wage to attract and retain capable employees. Automating order entry is an obvious use of technology to keep prices low...
I'll stand there and laugh as a pissed off customers brings their sledge hammers and start beating on the machines.
Entertainment for the masses as Wall Street can pay for these losses.
It will just force people to learn how to cook and eat at home.
How well did those self-checkouts work at food stores? I heard people were getting lots of stuff for free.
When I worked in this "biz", I always used to tell people "In the future, robots will do this job." They'd chuckle....then realty set in. It's a matter of Time until many low skill labor become replaced by automation.
I like that Total Recall where the Johnny Cab won't cooperate so Arnold rips him out and throws him in the back seat.
http://www.youtube.com/watch?v=EGHt1KLJcJI
A hundred thousand dollar machine to turn two grand a year....WINNING !
No salaries. No health benefits. No sick days. Winning !
No math skills?
I always use the self-checkout thing at the supermarket..
You can save a ton of money with those... ;)
I do too. The worst thing about the grocery store is standing in line behind the icky people and then have some gross fatty handling your food while talking about it. Makes my skin crawl.
But if there is a hottie cashier - that is where I checkout but this only happens maybe 1% of the time.
Why do the workers in the grocery stores have to be disgusting fat bodies? Oh - I guess that question answers itself.
Liquor counter check-out, FTW!
Sorry GermanGuy i tried to up arrow cuz i came to the same conclusion but my shitty iOSwhatever sucks and now i cant change an accidential red arrow back to green like i used to be able to do.
For some reason GermanGuy's green arrow isn't working..
Will just down-arrow him, then... :)
How do we do it ? VOLUME !
This should help you calm down. Please come back when you can afford to make a purchase. Your kids are starving. Carl's Jr. believes no child should go hungry. You are an unfit mother. Your children will be placed in the custody of Carl's Jr. Carl's Jr... "Fuck You, I'm Eating."
This is the end of the rainbow. First push everyone into part time, mostly food related service jobs, then fire them all and replace them with robots. The only question is what comes next, the Revy or the full on welfare for everything state?
Starbucks and the like already run on automated espresso machines. MacDonalds has test kitchens where robots make everything, I'm sure a machine can burn coffee and froth milk as well or better than most of Starbucks baristas. What happens when the company polls that people don't actually visit for the charms of interacting with them?
As mentioned elsewhere, people devoid of skills are not going to survive this wave of automation. If it offends you, it's pretty easy to deal with. Only buy from places where humans with skill create what you consume, or even better, cover your own needs. Don't be an automaton (consumer) and don't buy from automatons.
"As mentioned elsewhere, people devoid of skills are not going to survive this wave of automation."
People with skills are working these jobs, as there are no jobs for a number of people with skills.
Several years ago i read that IBM had figured out how to compute down to the molecular level. It will get interesting when skilled jobs start disappearing.
Here is some more real food. No corn syrup here. And no vending machine.
Stack on
Same fate for the bankers with the rise of the Bitcoin machines.
Wait until everything gets automated, roboticated, artificial intelligenced. Won't even need a CEO any more. AI will do everything better.
Wait till Uber rolls robot-cars made by
people-"friendly" GOOG.
Uber sheeple is beyond naive...
MMMMMMM yummy...
All your food and drinks made by a machine...
Not in Ecuador:
http://yourescapetoecuador.com/life/ecuadorian-food/
One of my high-school friends worked in a fast food restaurant. When business gets a bit slow, all sorts of things happen behind the counter that you really don't want to know about. Bored youth can be extremely inventive. Since then, I've always made a point of avoiding fast-food.
Even with machines, I still would avoid fast food. Management is always looking for ways to save money by using things like heart-clogging trans fat (or something worse) for cooking french fries or substituting pink slime for meat.
Why come down on trans fats? The government along with the vegan eco fascists told us for the past 40 years or so that trans fats and carbohydrates are "good" and that evil butter, etc. are bad. Sort of remionds me of how they slaughtered 35 million people in the third world from malaria because DDT was the ultimate danger. Junk Science lives.
The major evidence for the effect of trans fat on CHD comes from the Nurses' Health Study — a cohort study that has been following 120,000 female nurses since its inception in 1976. In this study, Hu and colleagues analyzed data from 900 coronary events from the study's population during 14 years of followup. He determined that a nurse's CHD risk roughly doubled (relative risk of 1.94, CI: 1.43 to 2.61) for each 2% increase in trans fat calories consumed (instead of carbohydrate calories).
Unfortunately, since the word has somewhat gotten out on trans fats, many food companies have been substituting palm oil for them. And palm oil also seems to be bad for your heart. Big food companies will do anything to save a few cents. But if you like things like pink slime (or whatever they have replaced it with) and trans fats (or palm oil), feel free to patronize your local fast food franchise.
Amazon workers, take note.
SMASH THE MACHINES!!!!
You'll get points for m both the Keynesians and the Luddites.
Toofer, baby.
Home Depot has already moved to this buffet self-serve model.
There is 1 cashier in the entire store, all the rest is self-checkout.
Bestbuy "box" stores are also in airports all over.
I can understand the bestbuy "box" if I just need a pair of earphones or a memory card, but WTF is Jambago serving? Isn't that supposed to be fresh fruit in those smoothies?
IKEA you have to basically drive a forklift to get your shit
Not that I expect anyone to give a shit, but I fucking hate IKEA. It's the Euro-trash version of shit made in China. Disposable garbage that is not even worth carrying out of the store.
The only thing I have purchased from IKEA in the past 6 years is a guest room bed that I bought for when my in-laws come to visit. :)
I always wondered where all my recycled cardboard went. I assumed it went to make drink holders, newspapers or paperbags.
I never assumed it would be pressed into furniture molds then covered with a veneer.
We export our trash and recyclable materials, they mush, smelt, mix, combine, blend it all into furniture, etc.
Stick to antique furniture made of actual wood or metal + glass only.
.2x post
I'm beginning to think the Ludites were correct.... but who's gonna buy the products when everyone is out of a job? It's all a race to the bottom.
maybe it's time to rethink society, huh?
At what point does everything remain about profit extraction?
You binary thinkers automatically run to socialism, or communism.
But, the future society will be eclectic, and will value individual development over various schemes, laws, and agendas that reduce an individual down to a unit of labor/wealth extraction.
At some point, technology is going to force our old-world ways of thinking to evolve, or we'll face social upheaval, war, and death.
Logical way, or the violent way. Time to think hard.
Let me give you a hint about society.
Ancient civilizations built large monuments to warn us.
Pyramids dude... fucking pyramids.
Society is a pyramid scheme.
Govt is a pyramid scheme.
Military is a pyramid scheme.
Religion is a pyramid scheme.
For some, "family" and "friends" are pyramid schemes, seen as free labor, free beggars or gov't benefit earners.
Control... is established with pyramid scheme.
No need to over-think it, whatever the fuck future society will look like or act like, it will really be a veneer over pressed coardboard... in the shape of a pyramid.
Its a bloody automat. Whatever happened to all of them anyway?
http://www.youtube.com/watch?v=Jx1E-kDpVQ0
They made it more efficient to produce, there is nothing wrong.
Only thing that is wrong is all the whiny people hating on efficiency and technology. Demanding for inefficiency to be brought back.
Yummy strawberries...
Yummy peppers...
oh wait.
http://www.sciencelab.com/msds.php?msdsId=9927669
If you have to wear hazmat suit and gas mask to work, you are not a farmer.
No Squeeze for You. Press button here.
Seems to me just a catalyst for an entirely new and diffirent economy. I mean, those robots aren't going to be fixing themselves...oh wait....