John Carlo L.

Rollon III-B1

Economics Output no. 1

Carl's Jr. CEO wants to try and create a workerless automated restaurant
(NaturalNews) Carl's Jr. CEO Andy Puzder recently drew ire on the internet when he advocated that his
company try and create a workerless, automated restaurant.

"We could have a restaurant that's focused on all-natural products and is much like an Eatsa, where you
order on a kiosk, you pay with a credit or debit card, your order pops up, and you never see a person,"
Puzder said, speaking to Business Insider.

Puzder says the automated restaurant would be insulated from the negative economic effect of inflation
that rising minimum wages have on the cost of food. The jobs that unskilled workers refuse to do for little
pay could be filled by robots that don't complain, that come to work on time and that never need a vacation
or sick day.

"If you're making labor more expensive, and automation less expensive — this is not rocket science,"
Puzder said.

"They're always polite, they always upsell, they never take a vacation, they never show up late, there's
never a slip-and-fall, or an age, sex, or race discrimination case," said Puzder, valuing robots over people.

"Millennials like not seeing people. I've been inside restaurants where we've installed ordering kiosks... and
I've actually seen young people waiting in line to use the kiosk where there's a person standing behind the
counter, waiting on nobody."

What a $15 minimum wage would do to the economy

A growing number of US citizens are tired of living paycheck to paycheck and are now demanding that the
federal minimum wage be more than doubled. Disgruntled, unskilled American workers all over the country
are complaining that $7.25 an hour is not enough to support the lifestyles they want. The pressure is on to
get the federal government to force private businesses to pay everyone at least a "living wage" of $15 an
hour.
Feeling the pressure of workers' demands, business CEOs have a few options. Businesses could raise the
prices of their goods and services so they can pay their workers more. However, the inflated cost of goods
and services across the board inevitably gets passed on to the workers as it affects the entire economy,
raising the cost of living for workers yet again, making their newfound "living wage" of $15 an hour
worthless in the long run.

Businesses can also offer their employees' opportunities to earn more, but not all businesses are in the
position to offer employees opportunities for advancement because of the nature of the work. Some jobs
require little or no skill and can be filled by anyone appreciative enough to take the position and do the job
right for the agreed-upon wage.

Businesses could also lower the wages of those making over $15 an hour to make room for those who
have demanded they be paid more. However, this would take incentive away from workers who strive to do
better and earn more. People with more skills, better time management, higher efficiency and better work
ethic would ultimately be punished as the minimum wage creates the conditions for perpetual poverty
control. Over time, these wage–price controls become a sort of intellectual slavery, suppressing the will and
drive of the once ambitious worker. Over time, the people begin to demand their way forward instead of
earning their way forward.

The idea of a minimum wage may help prevent businesses from abusing workers as effective slave labor,
but a $15-an-hour minimum wage has the potential to run most companies dry, destroying the jobs that the
businesses created to help people in the first place. If the higher wages being demanded by unskilled
workers outweigh the ability of businesses to operate, then the businesses will ultimately fold up, leaving a
decimated economy that can no longer afford to innovate through the will of the people. With the collapse
of the free market, wealth and opportunity then gets concentrated into the hands of billionaires,
exacerbating wealth inequality and a widening the divide between rich and poor.

If the demands become so great, businesses could find an alternative way to continue operating by
eliminating their need for human workers altogether.

In the technology era, businesses survive by replacing costly human labor with computers and robots.
Carl's Jr. CEO Andy Puzder isn't the first and won't be the last businessman to advocate that whiny,
overpaid employees get out of the way and make room for a future of robots.
Summary:

The CEO of the Carl’s Jr., Andy Puzder has drawn attention on the internet when he favored that
his company must try and create a workless, automated restaurant.

He said that they could have a restaurant where you can order on a kiosk and pay with credit or
debit card. Then your order pops up, never seeing a person who assists and makes food for you.

He refers to the automated restaurant. According to him it would be shielded from the negative
economic effect of inflation that rising minimum wages have on the cost of food. Those jobs that unskilled
workers refuse to do for little amount of money could be done by robots that does not even complain, that
come to work on time and never takes a vacation.

Puzder said that it is not a rocket science if we’re making labor more expensive, and automation
less expensive. Puzder believed that it wiser to use automated restaurant in industry because he had seen
young people using this kind of machine in a restaurant where there’s a person standing behind the
counter, waiting on nobody.

Now many have demanded of a $15 minimum wage per hour because of the need that $7.25 an
hour is not enough to support the lifestyles they want. The pressure was given to the federal government to
impose a law telling that private businesses must pay every employee they have at least a “living wage” of
$15 an hour.

Business CEOs have a few choices to consider. They could raise the prices of their goods and
services so they can pay their workers base on their demand. They could also offer their employees’
breaks to earn more, but not all of them have the ability to bargain opportunities for advancement because
of the nature of the work.

Business owners could also lower the wages of those making over $15 an hour to give chance for
those who demands that they must be paid more. But this would take away the incentive from those
workers who works hard and do better to earn more.

If these demands continue to creep around the industry, it would force Business CEOs to switch to
an alternative. In the technology era, businesses would survive by replacing costly human labor with
computers and robots. If this never stop, Carl’s Jr. CEO Andy Puzder won’t be the last businessman to
support automation in the business world.
Critique:

As we have read in this economic and business article, there are measures that the CEO of Carl’s
Jr. have in mind. These are plans to improve his own business. But would this strategy of his be efficient or
effective in the long run?

There are some flaws we need to consider regarding the article we’ve just read. At first, you may
think that it was a wise decision to make your business or in this case your restaurant, automated. Then
you must be wrong. Let us point on some of the problems or glitches that this scheme have.

Andy Puzder intending to automate his business by installing machines or kiosk that could prepare
food for the customer without any person behind it, uses the type of production which we call Capital
Intensive Production.

In using a capital intensive production there are disadvantages that we must be aware of.

First is there will be an initial high cost of investment. Because of the machineries needed, it may
cost you a fortune before accomplishing this kind of business you want to have. Machines are technological
advancement so you must have a knowledge or know how to operate them. They are also prone to
breakdown. Every once in a while they need check-ups or repairs. It requires you to allot a significant
amount of money for their maintenance. You must also learn about possible training costs. It doesn’t mean
that you don’t require men in your business, you really are relieved of expenditures in training. The training
that we are pertaining to is about the usage of the machine, so you, as the owner would be able to asses
personally the condition of your device.

The second is the lack of flexibility of the machine. Because they are robots they could not respond
to change in demand of the customers. Since consumers have the changing levels of demands, it would
not be covered or performed by the machine. They cannot provide personal touch to the customers which
means they could not offer help to them. They cannot be more in-tune with the customer’s needs and
wants.

Machinery could not possibly provide tailor made products or service for different customers’ needs
and wants. They are not flexible enough to provide custom made products or services for individual
customers.
 Using machines would be a risk for it may be prone to repairs or breakdowns. It would also be
dependent on the energy it consumes coming mainly from electricity. It will not work without the energy
generated by the fuel it needs.

Another disadvantage of using this scheme is that machinery lacks initiative. They could not
innovate on their own. They can’t even provide ideas on how to improve the production. They cannot take
on extra responsibilities when needed. Unlike human, they cannot provide feedback. Those feedbacks are
useful in providing ideas for continuous improvement of the business. They cannot adapt to introduce new
ideas or concepts that they may apply to expand their future market.

And lastly, as we all know, any machine or device we used, always requires the hand of the
humans. In any event of breakdown of machinery, man is always needed to takeover.

In the demand of the employees that they should have at least a living wage of $15 an hour, this
could lead to automation of many businesses because it would be their last resort.

We must consider that in this demand many other person will be affected or even other
businesses. The demand would be non-sense because the business could raise their salaries by
increasing the prices of their goods and services and this would be on them. You would realized this if you
were to ponder on the idea that this inflated cost of goods and services will inevitably gets passed on to the
workers. This would only make theirs newfound “living wage” of $15 an hour worthless in the long run.

Although business can also offer their employees some chances to earn more, but not all them
would be able to do that because of the nature of the work itself. As you can see, some jobs require just a
little effort or no skill at all, and can be filled by anyone ready to take the position and do the job right in the
agreed-upon wage.

This idea of a minimum wage may help the government to prevent the business owners from
abusing the workers as slaves, but a $15 an hour minimum wage has the potential to make most of the
companies cleaned out. This would deprive them of jobs that the businesses created to help them in the
first place.

This demand is not really unacceptable if you really are hard-working. But what about those people
who just sit around that does not deserve any raise in their salary. Instead of bragging about a low
minimum wage, why not work hard and make your way on top by earning it. Aim for promotions by working
your way not by demanding it.
Application:

In relation to some of the concepts of economics, let us try to cite some of the applied principles
that we saw from the article.

Carl Jr. CEO Andy Puzder is a keen observer and he is very sensitive about the needs of the
people around him. In the first place, he made a restaurant that is really a good business. He saw the
demand for fast food restaurant so he made move providing and making food for the people in just a matter
of time. But as time goes, he had this feeling that his restaurant must follow the trend. In a technological
era, he noticed the need to automate what he has in his restaurant. Since many young people are used in
the idea of pragmatism, he provided a solution for this. That is where automated restaurant comes in.

As a business man, one should be respond immediately in the needs of the people. We can see
how supply and demand are very important here. Andy Puzder saw a great demand in the food industry
together with the need to use technological advancement. He saw scarcity as a problem so he devised a
plan to solve this problem. When he saw those young people which are more interested in automated
restaurant, he points out to the demand, and he uses the concepts of economics by providing supplies for
the people.

There is a scarcity in service, which is not about human service but services offered by robots
being in short supply. The demand that Andy Puzder recognize was common in a fast-phase generation.

If we are to analyze it in a Positive economics, we can say that the economy is now experiencing a
very great change because of the new generations of people. We are now in technological era, where
gadgets, computers and machines or other devices are the focused of the people. People are always after
the goods or services that are available in just a matter of time. Just like in the food industry, fast food
restaurants are more in than those restaurants where you’ll have to wait for a longer time.

Going to Normative economics, we can say that automation of such business should consider if
that is really needed. Some are just trying to go with the trend without even considering if a change in their
strategy is really necessary in their business. Business owners should not let automation to degrade their
products or services in manner that they will provide a defective or low quality goods or services.

In the article, we are also able to answer the four basic economic questions. The first is “what to
produce?” Andy Puzder identified what are the commodities needed to be produced for the buyers. In his
case, his product is food. The second question is “how to produce?” At first, he uses a kind of production
that uses more of human resource. It means that manual labor is required in producing goods and services
which is called Labor intensive production. But as he noticed the changing level of demands of the society,
he switched to Capital intensive production which employs more technology and capital goods like
machineries and equipment in producing goods and services. Third question is “how much to produce?”
which means the number of commodities needed to be produced in order to satisfy the demand of the
consumers which brings us to the last question “for whom to produce?” This question identifies the people
or sectors who demands the commodities or services produced. It is the prospect of your business or in
simpler terms the “target market”.

Here we can also see how the 3Es of economics were applied. Efficiency can be seen on the use
of automated restaurants. For as we know the use of capital intensive production provides greater
efficiency and uniform effort or output. It reduces human error for the needed data was already
programmed on it resulting in a more accurate production. Increase in efficiency could reduce average
cost. By lowering the average cost you could get back the initial high cost of investment which pertains to
equity. Effectiveness, can be seen when his restaurant has achieve the set goals and objectives.

In recognizing the demand of the society and providing the needed supply for them, Carl’s Jr. CEO
Any Puzder applied the concept of Microeconomics. He focused on the needs of the buyers and as a seller,
he interact with them by producing the demanded goods or services. He also applied a capital intensive
production which is one of the topics microeconomics. He studied how individual consumers decide.

When we talk about Macroeconomics, we can say that Andy Puzder had also tried to understand
the behavior of the society as a whole. He would not just jump in to conclusions that easy, without even
thinking of what will happen to his business. So first by learning about the overall behavior of the society,
he decided to change his techniques. The kind he chose does not requires human employment.

In every decision we are going to make, we all know that there must always be a sacrifice. Just like
what Puzder do, he bargains a lot on what he did. He applied here the concept of Opportunity Cost.
Considering he may lose everything he had, he still do what he wants to do or what the society needs him
to do. He does not hesitate because he knows that this is a part of being a businessman, always taking the
risk.
 There were also factors of production, the land, labor, capital and entrepreneur. We are also able
to observe the microeconomic circular flow model. It represents the relationship of the firms or producers
which is the Carl’s Jr. and the households or consumers, together with the goods and the resources.