Fast food executive Andrew Puzder, who President-elect Donald Trump is expected to tap as labor secretary, has advocated replacing some human workers with machines as a way for businesses to reduce costs associated with rising wages and health-care expenses.
While machines require regular maintenance and can sometimes malfunction, Puzder said, they are also easier to manage than humans and don’t pose the same legal risks. “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,” Puzder told Business Insider in March.
Puzder serves as the chief executive of CKE Restaurants, the corporate parent behind fast food chains Hardee’s and Carl’s Jr. The company counts 3,300 locations in 42 states and 28 countries, according to its website.
CKE Restaurants launched a pilot program with Microsoft last year that brought electronic kiosks into 30 Hardee’s restaurants, allowing customers to place orders without speaking to an employee. A request for comment on the company’s automation initiatives was not returned by the time of publication.
Not all restaurant functions can be automated, however, Puzder explained after the Business Insider piece. In a Los Angeles Times interview later that same month, Puzder said cashiers are still needed because some customers are more comfortable interacting with humans. Other restaurant functions, such as preparing fresh biscuits and hand-breaded chicken, cannot easily be automated, Puzder wrote in a Wall Street Journal editorial in March.
CKE Restaurants employed more than 20,000 people at its company-owned restaurants and corporate headquarters as of 2012, according to a Securities and Exchange Commission filing. The private company terminated its SEC registration the following year after it decided against going public and instead was sold to a private equity firm.
“Consumer preferences, reduced technology costs and government policies that increase labor costs are driving a trend toward automation in the restaurant business. If you make something more convenient and less expensive, it tends to catch on,” Puzder wrote in the Journal.
Puzder is critical of government policies that he says drive up labor costs, including legislation to increase the minimum wage and President Obama’s signature health care law. Those policies have forced labor-intensive businesses, such as restaurants, to look for ways to eliminate expenses, he wrote in the Journal.
“Dramatic increases in labor costs have a significant effect on the restaurant industry, where profit margins are pennies on the dollar and labor makes up about a third of total expenses. As a result, restaurants are looking to reduce costs while maintaining service and food quality,” he said.
But Puzder sees automation shaking up industries well beyond his own. Technology has already started to replace workers in airports and grocery stores, he said, blaming the trend on the liberal labor policies advocated by Trump’s former Democratic presidential rivals.
“This is the problem with Bernie Sanders and Hillary Clinton and progressives who push very hard to raise the minimum wage,” Puzder told Business Insider in March. “Does it really help if Sally makes $3 more an hour if Suzie has no job?”
Many technologists and economists expect robots, self-driving cars and other automated technologies will eventually replace low-skilled workers, though predictions for how quickly that transition takes place vary greatly. Nevertheless, it could prove to be a fundamental transformation of the economy that displaces professional drivers, factory workers, field laborers and others in more manual roles.
Those jobs are held by many of the working-class Americans who are credited with handing Trump his surprise victory in last month’s presidential election. Already Trump has made preserving manufacturing work a cornerstone of his transition, threatening retribution against companies that move those jobs to other countries and reportedly striking deals to keep at least some of them on U.S. soil.
Darrell West, founding director of the Center for Technology Innovation at the Brookings Institution, said the move toward workforce automation is likely to persist regardless of whether the new administration keeps the minimum wage stagnant or eliminates Obamacare. Technology will still be cheaper and easier to manage than human employees, he said.
He expects Puzder “will be sympathetic to automation replacing workers” based on his past comments.
“Trump campaigned on helping working class people get jobs and automation is a job killer, and so the administration may be undercutting the very essence of its political message” with Puzder’s appointment, West said.
Read more from The Washington Post’s Innovations section.