Why Entry Level Workers Should Oppose Floors on Wages

There has been a new push through work centers – once only appearing in Southern states where unions were not represented – to organize workers in entry-level industries.  This has resulted in unionizing of car wash workers in New York and one-day strikes at fast food restaurants at a handful of cities.  Certainly the idea of doubling one’s wage might sound appealing.  Those in entry-level positions that require little training might also feel easily replaceable and therefore want some job security and see unionization as a way of getting that protection.

What those in these positions should consider, however, is that while their jobs are not likely to be sent overseas as have many factory jobs as wages and benefits in the US have risen and work rules have become more restrictive, they are more in competition with technology than are those in jobs that require more decision-making, creativity, and experience.  Indeed, if wages were doubled at fast food restaurants in big cities, I would expect to see cashiers replaced with kiosks to cut the staff from eight down to two to four in most restaurants.  The technology is certainly out there, and with many fast food restaurants now accepting credit cards the issue of accepting payment is largely gone.  At $8 per hour it is not worth going through the expense of acquiring the computers and software. At $15 per hour, it suddenly looks like an economic option.  At $20 per hour companies may even install the technology needed to cook and package the food.

Perhaps a franchisee would operate a restaurant by himself, periodically adding fries and burgers to a hopper.  Customers would go through a drive-thru or take-out window (cleaning the restaurant would require too much labor), and place an order through a touchscreen, smart phone app, or voice recognition software (“Did you say large burger with fries?  OK.”).  Once the order is placed various machines would send the burger down a conveyor belt over a gas grill, drop some fries from a hopper into the oil, and fill up the drinks.  This would all be packaged using the technology found in the manufacturing industry today.  The technology is ready – it just isn’t worth the price and the effort, yet.

Note that we have already seen this movement from wage workers to technology in other places.  One used to check baggage with a ticket agent.  Now you are directed to a set of kiosks.  Car rental agencies have also gone to kiosks.  While there are some bugs to work out, supermarkets and hardware stores are also experimenting with self checkout lanes to reduce the number of cashiers they need to hire.

More and more, companies are reducing labor by finding things that customers are willing to do themselves through the internet.  With school fund-raisers, rather than sending in a hand-written order form, parents are forced to enter the orders themselves online.  One wonders why the company collects anything at all since the parents make the sales, enter the orders, and then deliver the merchandise. When buying tickets one places the order and then even prints the tickets.  States are even going to web applications and kiosks for driver’s license renewals.

Worrying about job security in  entry-level jobs by a capricious boss are largely unnecessary.  Security from being replaced by others in any job is a matter of being more valuable to your boss than others. Luckily, in the entry-level job market, the competition is fairly lax.  If you show up on time, dressed and ready for work, and do your job efficiently while you are there you will be doing better than 80% of your peers and very unlikely to be replaced by someone else.

The secret to earning more money is to become more valuable than you were when you started and more valuable than others earning less.  Learn to work efficiently and reduce customer wait times and you will be pleasing customers and bringing in more revenue for your employer with shorter turn-over times.  Learn to manage people and you’ll have a rare and valuable set of skills that will be rewarded.  Show that you are responsible enough and capable of running things such that the owner can leave the business for periods of time and know it is being run well, and you will be invaluable.

In an environment such as this, where the technology is there to automate many processes, the worst thing employees could do is to raise the cost of keeping them on staff.  To keep these jobs from being automated, employees need to keep the cost of labor below the cost of the technology that could replace them.

The other thing to do is to add value that cannot be provided by a machine.  Give a smile and a greeting that brightens your customers’ day.  Make recommendations on the best way to order, say saving money or getting extra products for little more by getting a combo.  Put the service back into the service industry.  Do what you can to make the customers choose your restaurant over the one across the street. It may be cheaper by the hour to install a kiosk, but it will not be worth the trade if business and customer satisfaction will drop.

If all you are doing is entering customer orders, you could be easily replaced by a touch screen.  Humans have interpersonal skills, creativity, motor skills, and decision-making skills that are far beyond the capabilities of machines.  To keep from being replaced by them, don’t act like one.  Make use of what makes you human.

Please contact me via vtsioriginal@yahoo.com or leave a comment.

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Disclaimer: This blog is not meant to give financial planning or tax advice.  It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA.  All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.

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