Applebees automates, and brings a new world of jobs one step closer

Larry Kummer, Editor

10 years ago

Summary: The FM website serves to help readers more clearly see the future (it’s an unplanned emergent role). Today we look at one aspect of America’s future, bring both peril and promise: the next wave of automation. It’s already here, but seen by few. Today is not too soon to consider how this might affect your family.

“Fortune favors the prepared mind.”
— Lecture by Louis Pasteur, 7 December 1854

Our experts fret about decreasing fertility, slowing population growth (we need immigrants! otherwise wages will rise and consumption fall!) and aging populations of longer-living retirees (we must slash social security and medicare!).

These are daft recommendations for a nation with real wages stagnant for a generation — taxes on the rich near multi-generational lows — corporate profits at record highs — inequality rising — a health care system grossly less cost-effective than that of any other developed nation’s — and perhaps most important, the next wave of automation already hitting us.

From another perspective, these problems — centered on the Federal government’s debt and liability for retirement care — are operationally easy to fix. Embarrassingly so, like pouring water from a boot with the instructions on the heel. Especially when compared to the problems of our peer nations (e.g., unifying the nations of Europe, or Japan’s government avoiding financial collapse from its mind-blowingly large debt).

Experts label these issues “politically difficult” to avoid asking if we have become too incompetent to govern ourselves.

Meanwhile a far greater challenge has already begun, although still invisible to our experts: the next wave of automation. We can as yet only guess how many jobs this will extinguish, as it does to the service sector what previous waves of automation did to farming and manufacturing. Both skilled and unskilled jobs will go away in unguessably large numbers. Previous posts (see below) discussed some of the first effects. Here’s another…

“100,000 Applebee’s Tables Get Tech Treatment; DineEquity Announces Rollout of E la Carte Tablets“, Restaurant News, 3 December 2013 — Excerpt:

Today, Applebee’s steps into the future to redefine and enhance the guest experience through the installation of 100,000 E la Carte Presto tablets, powered by Intel, on every table and multiple bar positions at more than 1,800 Applebee’s® restaurants in the United States by the end of next year.

DineEquity, franchisor of Applebee’s and IHOP® restaurants, announced the relationship with an aggressive schedule for 2014 installation throughout the Applebee’s system. The tablets, which enable guests to add to their orders, pay and play games from their seats…

How many fewer waiters will we need as these roll out? Eventually having a person take your food order will seem as reasonable as having someone cut your food — or pump your gas.

This wave of automation has just begun eliminating jobs. Parking lot attendants and toll booth operators. Checkout clerks. Now we see the wave coming to waiters. And clerks who prepare, process, and file paper (the savings from digitalization are almost unimaginable). Middle class jobs, too. For example, the university system has begun the slide to a radically different structure (since the finances of the current one is unsustainable) — universities with more tech and fewer teachers.

Millions and millions of jobs will disappear with stunning speed during the next few decades.

Automation need not be feared. Many of the dooms we fear will disappear along with the lost jobs. Automation improves productivity, giving us more national wealth and income. We need only adapt our society to gain its benefits, minimize the trauma of the transition, and share the benefits (which we have failed to do with the gains from the last 30 years). We want to succeed like Britain did in the 1760 – 1840 period, with internal peace and prosperity. We do not want to follow France’s path during that period.

Planning for success require that we reassess America’s strengths and weaknesses. For example, economists see as strengths our relatively high fertility and attractiveness to immigrants. True in the past, but not so as automation begins another cycle of job destruction.

In the 21st century population growth will not be necessary for economic growth. In this new world Japan might become the nation best prepared for the next wave of automation — as seen in the below graph from “Japan Meanderings”, Christopher Woods, CLSA, 5 December 2013. Falling population for a world with more machines and fewer jobs, leaving a richer people in a greener land.