Opportunity Cost

I started working as soon as someone would let me.  I mowed lawn, shoveled snow, delivered papers… whatever I could do for a buck.  I’d put the money in the bank, and I’d save it for… well, I’m cheap.  I mostly just saved it aside from comic books and used science fiction.

My first job for someone else was Wendy’s, where I helped to open a new store not long after my 16th birthday.  I worked there as many hours as they’d give me until I went off to college nearly three years later.  I got to work with some really interesting people, and I learned a ton about how to deal with people from very different socio-economic circles from me, people with very different visions of their future.

So, what future me is likely to never get that opportunity?

Wendy’s (WEN) said that self-service ordering kiosks will be made available across its 6,000-plus restaurants in the second half of the year as minimum wage hikes and a tight labor market push up wages.

It will be up to franchisees whether to deploy the labor-saving technology, but Wendy’s President Todd Penegor did note that some franchise locations have been raising prices to offset wage hikes.

McDonald’s (MCD) has been testing self-service kiosks. But Wendy’s, which has been vocal about embracing labor-saving technology, is launching the biggest potential expansion.

Wendy’s Penegor said company-operated stores, only about 10% of the total, are seeing wage inflation of 5% to 6%, driven both by the minimum wage and some by the need to offer a competitive wage “to access good labor.”

When I talk to teenagers today, I’m shocked at how few of them have ever had a job, let alone have one now.  It’s not totally due to the hikes in minimum wages, but that’s a large factor.  What I mostly hear is that workplaces would rather spend money on people who would be willing to stay longer and work more than most teens, and that it’s hard for the average teen to prove he or she can work that hard and that long.  I had opportunity, and most of the kids I know can’t get their first one.

The work ethic I put into my main job many years later stemmed from my desire to do anything at the Wendy’s to get more hours in the first place.  If the floors needed mopping, fine.  If someone needed to be there at 6:05AM to open, then great.  Heck, I used to go hose down the lot on weekends, and I even remember sanding rust off the outdoor railings and painting them… all for pretty much minimum wage.  But heck, three hours of work and I could afford the gas and greens fees to go golfing with my high-school buddies.

I wonder where the future management of the nation will get their first experience?  It won’t be at the register of a fast food restaurant anymore.

6 thoughts on “Opportunity Cost

  1. Pauline's avatar Pauline

    You are right, but those first jobs can be in your neighborhood. I had a kid who used to cut our grass, whose dad dropped him off in their Mercedes. It’s all about willingness to work,and the values you learn at home, which is the other side of the equation

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    1. I agree, you can’t wait to get hired to build a work ethic. But at the same time, how do you eventually go from cutting lawns to a full-time post-collegiate job? There’s a need to work for a boss and have coworkers that will be missed.

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  2. Michael Dunn's avatar Michael Dunn

    The real minimum wage will always be zero. Artificial wage minimums displace the lowest skilled workers to the unemployment lines, as your example demonstrates by replacing humans with self-service kiosks.

    Common man does not understand that government cannot change the economy. Policy makers can only distort its balance through incentives and disincentives. The market is an unmoved mover (to borrow an idea from Aristotle and Adam Smith). Government can change its boundary values but cannot affect the calculus inherent in the marketplace.

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