How Much Would A Big Mac Cost If McDonald's Workers Were Paid $15 Per Hour?
The cost of a Big Mac–at least to consumers–probably wouldn’t go up at all. Why? In order to remain competitive with rivals on price, the company,as economist Adam Ozimek pointed out earlier this week, would probably find a way to keep overall labor costs in check, most likely by reducing the number of workers and introducing more automation–think ATMs in the banking industry....
Dr. Bittlingmayer described discussions on fast food wages as a symptom of a larger problem: the U.S. school system. “Low wages for adults are a sign that something didn’t go right in terms of education and work experience,” he said. “We’re not addressing the cause.”
http://www.forbes.com/sites/clareoco...d-15-per-hour/
Originally Posted by I B Hankering
The usual rule of thumb is that "overhead" on an employee costs about 100% of salary. This means that a $7.50/hour guy actually costs the business about $15/hour.
With nominally 2000 working hours in a year, a $15/hour employee working full-time costs the employer about $60,000/year. Times five years, that's $300,000. If you can replace one full-time-equivalent person with a robot that costs only $250,000, and lasts five years, you've made money on the deal. If, over the 5-year service life of the robot, you spend less than $50,000 on maintenance, you've broken even - AND you don't have to worry about the robot going out on strike for even higher wages.
If you can replace four FTEs with one robot, with a five-year service life, you can make money even if you spend a million dollars on each robot.
The question then becomes: Could you do it? The answer is Yes, quite easily. As of quite a few years ago, the typical McDonald's was a counterpoint chorus of beeps and boops, as various computers notified the human pick-and-place robots that it was time to, for example, pull the fry baskets out of the grease, or flip the burgers on the grill, or load the finished patties into the assembly line bins, or assemble another order. Humans were already being used as relatively simple industrial robots, and the state of the art in industrial robotics has improved a LOT since then.