As policymakers nationwide consider minimum wage hikes, executives at McDonald’s are testing new ways to automate their restaurants.
During an investor conference last week, McDonald’s CEO Chris Kempczinski announced that the fast food giant is experimenting with voice-ordering technology at ten restaurants in the Chicago area. The system is reportedly 85% accurate.
Kempczinski believes that the technology will appear in restaurants across the country within the next few years.
“There is a big leap between going from 10 restaurants in Chicago to 14,000 restaurants across the U.S. with an infinite number of promo permutations, menu permutations, dialect permutations, weather — I mean, on and on and on and on,” said Kempczinski. “Do I think in five years from now you’re going to see a voice in the drive-thru? I do, but I don’t think that this is going to be something that happens in the next year or so.”
Two years ago, McDonald’s purchased several artificial intelligence startups. Apprente, for example, can automate voice-based ordering in multiple languages.
Other fast food executives confirmed that lawmakers’ attempts to raise the minimum wage are driving the push toward automation. Ed Rensi — chairman of global fast food franchising company FAT Brands and former CEO of McDonald’s — told FOX Business that higher minimum wages would pressure restaurants to increase their prices as expenses rise.
“When you raise prices 1%, you lose about 1% of your transaction costs,” Rensi commented. “And you have to work really hard to recover that through promotion, marketing, you know, all kinds of local events and it’s not an easy thing to do, particularly when you’re living on a very high number of transactions.”
“You got a choice, you go broke by raising prices or you go broke by losing money because you can’t raise prices,” Rensi added.
Since President Biden assumed office in January, lawmakers have drafted multiple proposals to raise the federal minimum wage.
Most notably, Sen. Bernie Sanders (I-VT) introduced a bill that would have raised the federal minimum wage to $15 per hour alongside the passage of the $1.9 trillion American Rescue Plan. The legislation failed in the Senate after eight Democrats — including Sen. Joe Manchin (D-WV) and Sen. Kyrsten Sinema (D-AZ) — voted against the measure alongside their Republican colleagues.
One month later, Sinema joined forces with Sen. Mitt Romney (R-UT) to raise the federal minimum wage to $11 per hour. Romney told HuffPost that he hoped for other centrist Senators to form a coalition around the proposal.
A recent study from the Congressional Budget Office revealed that although a $15 minimum wage would increase salaries for 900,000 people, it would also leave 1.4 million Americans unemployed.
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