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AI voice recognition has advanced tremendously in recent years. McDonalds has just purchased an AI voice recognition startup, that will be adopted for use in their Drive-Thru windows. But how will this affect entry-level employment?

AI Voice Recognition at the McDonald’s Drive-Thru near you

Recently, McDonald’s purchased silicon valley start up Apprente. Itamar Arel , one of the founders of Apprente, became the vice president of the newly formed McD Tech Labs, which is being built around Apprente. This enterprise will continue to develop cutting edge technology for McDonald’s.

The first step will be to adapt this voice recognition platform for McDonald’s drive-thru windows. This will have an effect on employment – drive-thru tellers will no longer be needed. Later, the technology may be adapted for ordering inside the restaurant – at kiosks or even through mobile apps.McDonald’s was already using some kiosks in their restaurants.

Minimum Wage or Living Wage?

Although I normally like new technology and do not feel it threatens human employment in the long run, this adaption of new technology is in direct response to artificially rising labor costs.

In the United States, there is a movement to change the minimum wage to a ‘living wage’. However, the minimum wage was never intended to be a long term wage, or standard wage, or for a person who was the head of a family. Instead, the minimum wage was for people just starting out, who had little or no marketable skills. Forbes: “according to the Bureau of Labor Statistics, nearly half of minimum wage workers are between the ages of 16 and 24.” How could they become more marketable and demand a higher wage? By working a minimum wage job, gaining valuable experience, developing their work history, and earning other skills that would justify a higher wage.

A study by University of Virginia and Middle Tennessee State University economists found that teenagers who held part-time jobs in school had annual earnings that were 20 percent higher than their counterparts without experience six to nine years after graduation.

Forbes: McDonald’s Says Goodbye Cashiers, Hello Kiosks

By raising the minimum wage to a ‘living wage’ of $15/hour, the bottom rung of the ladder is kicked out. People who cannot provide $15 worth of service in an hour are then prohibited from entering the labor force. And how will they ever learn the skills to be worth $15/hour, if they cannot get a lesser paid job? I fear this will contribute to an entire under-class of people – who do not go to university and receive advanced credentials, and so with only a high school diploma they are effectively locked-out of the labor force.

When I was in high school, it was very common for 16-18 year-old kids to have an after school job and/or a summer job. In fact, many businesses included this type of employee in their business model – many restaurants (not just fast food, but others as well) employed mostly young adults – with some older ones as both supervisors and the day shift. This was a major facet of their business model. This is no longer possible, and in some cities it would be illegal. If the 17 year old only provides $10 of service in an hour, how could a business afford to pay him/her $15/hour?

Embracing AI Voice Recognition and other new technologies

This adoption of new technology is slightly different than most adoptions. Frequently, new innovations augment existing employees; of course, overtime these innovations affect employee roles and change employment composition. On the other hand, these innovations are adopted in response to artificially rising labor rates, specifically to replace entry-level employees.

Forbes recognizes that McDonald’s has a history of embracing new technology. However, that this new use of automation is distinct:

These [earlier] innovations dating back to McDonald’s founding were not intended to reduce the number of employees; rather, they were designed to make employees more efficient at their jobs. The introduction of self-service ordering tablets has been presented in a similar manner. However, with labor costs continuing to skyrocket, it’s inevitable that restaurants and other fast food chains will continuously search for ways to reduce labor costs–particularly as customers get comfortable with new technology.

Forbes: McDonald’s Says Goodbye Cashiers, Hello Kiosks

Nor is McDonalds the only restaurant to change their system based on higher minimum wages. Many restaurants are eliminating wait staff or even adding table kiosks to take orders.

AI Voice Recognition – the future is here

Regardless of the impacts discussed above, the advancement of voice recognition is impressive. According to some, the natural language processing is much more advanced in China than in the US. This is concerning, since many experts consider voice recognition the future of AI and of data input. Natural Language processing is rapidly improving. Many predict that “Voice Is the Future of Brand Interaction and Customer Experience”. Therefore, it should not be surprising that McDonald’s is trying to stay ahead of the curve, in this regard.

AI Assistants, such as Alexa, Siri, Google Assistant, obviously make heavy use of voice recognition and natural language processing.According to Clearbridge Mobile, “it’s estimated that every one in six Americans own a smart speaker …[and] that nearly 100 million smartphone users will be using voice assistants in 2020.” As more and more users use voice recognition devices and apps, the technology will improve faster.

Siri only began in 2011: where will this technology be in another decade?

For further reading

To read further about the effects of minimum wage laws:

• A new article from the great economist Walter Williams: Minimum wage increases discrimination against poor people
• Another article by Walter Williams: Minimum Wage Cruelty
• James Blair at the Foundation for Economic Education: Regarding the Minimum Wage
• George Reisman writing at the Mises Institute: How Minimum Wage Laws Increase Poverty

To read further about voice recogniton:

• Brian Fuller: AI Technology Is Changing Voice Recognition
• Paramjeet Berwal discussing AI’s effects on future work
• My article: AI watches Walmart Customers Checkout

What do you think? Do you prefer giving your order to a kiosk or a human? Comment below!