Minimum Wage

The Surprising Minimum Wage Impact at McDonald’s

Weekly Economic News Roundup and minimum wage hike
Comments (1)
  1. Joe User says:

    “In 2017, only 20 percent of all McDonald’s had touch screen ordering kiosks whereas 75 percent had them in 2019. However, the timing of the increase did not correspond to minimum wage changes. So they concluded that even though the new equipment saved labor, its purpose was not to offset the cost of higher wages.”

    Oh, is this naivete or willful blindness?

    Your article said “From 2016 through 2020, wages crept upward”. Did the 2 economists consider that, the higher the minimum wage, the greater the incentive to use technology to reduce basic crew work hours? 2017 minimum wage resulted in 20% adoption, but the higher 2019 minimum wage was worth 75% adoption.

    How about franchisees were waiting for the technology to mature before they chose to implement it in their locations? 2017 adoptees were blazing new trials with unproven technology. By 2019, the technology was proven enough that 75% of franchisees were comfortable with it. The slower adoption reflects a maturation of a new technology and not a lack of desire to cut worker hours.

    Does implementing ordering kiosks require a reconfiguration of the restaurant? Perhaps franchisees were delaying their implementation of the technology to match their other plans for the dining area?

    At the end of the day, did worker hours increase or decrease from 2016 to 2019? Isn’t that a much better measure of whether franchisees were trying to reduce worker hours?

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