Commentary: What Chipotle tells us about America's economic future
As Slate's Moneybox correspondent, I've frequently had occasion to write about the fast-food sector. Chipotle, especially, but also Chop't and Taco Bell and KFC. To some, this has become an object of fun. Why is this guy writing so much about fast food when there are so many real economic issues in the world? The answer is simple. Fast food is an important issue. If you want an image of the future, imagine a burrito stomping on a human face forever.
Think about it. You, of course, can assemble burritos in a sweatshop in Cambodia, freeze them, put them on boats and trucks and then reheat them. But microwaved frozen burritos, though delightful when pulling an all-nighter in college, are fundamentally pretty gross. While I wouldn't exactly say that you can't replace burrito-making humans with burrito-making machines, I'm not sure anyone's going to bother any time soon.
From an engineering standpoint, making a burrito-rolling robot is a hard problem.
Mechanization works best for tasks that require either enormous physical strength or none at all. For example, while algorithms can't yet do good journalism, companies such as Narrative Sciences have succeeded in automating not-so-good journalism; with that foot in the door, they will presumably iterate and improve. Conversely, if you need to crush a car into a little cube of metal, using a machine rather than a whole team of human workers is a great idea. But a burrito is a physical object that requires little strength but a great deal of dexterity to fold without smushing. For a human being, this doesn't count as a highly skilled occupation. For a robot, it's extremely difficult.
Last but by no means least, a huge challenge to robot burrito-making is that the inputs are poorly structured. The last time I went to Chipotle, I ordered a burrito with "uh, some carnitas I guess, but not too much just a bit yeah, that's great, thanks." This perhaps annoyed the woman whose job it was to scoop the protein into the burrito, but she understood it perfectly well. Later, when asked if I wanted anything to drink, I said, "No, thank you," but then remembered that my wife strongly prefers fountain soda to cans, so I reversed myself and said, "A Diet Coke, actually no, make that two," since I wanted one too! The cashier not only parsed that double flip-flop but cruised past the irrelevance of my stated soda-brand preference and just handed me two cups. Chipotle expects customers to fill their own cups, thus saving on labor costs and letting the customers decide exactly how much ice they want.
Long story short, the fast-casual burrito dining experience is a difficult automation challenge. But it's also not a particularly high priority, because food service industry workers don't cost much to hire. The robots are going to come after truck drivers, accountants, Internet writers and other mid-skill workers before they hit the lower-skill sector.
That's why even though total employment still remains slightly below its pre-recession peak, employment in food-service establishments is 10 percent higher than it's ever been. The Obama administration likes to tout a "manufacturing renaissance," but the long-term trend toward the disappearance of factory work continues unabated.
All of which is to say that covering the fast-food industry isn't just about silly waffle taco videos. It is, to a substantial extent, about covering the future of the American economy and especially the future of working-class employment. Trends in the industry matter, as does the fact that, like any other industry, it has its incumbents and its entrants, its product innovations and its process innovations.
On a policy level, we need to ask ourselves what the answers are for a world where a large and growing segment of the population is going to be working in the food service industry. The Republican platform's focus on regressive tax cuts is just staggeringly unresponsive to big-picture social trends in an era when globalization, automation, assortative mating, and other social trends are disproportionately enriching the already-privileged. At the same time, while the recent Democratic Party push for a minimum-wage hike can do some good in this sphere even if it costs a few jobs, liberals ought to recognize that there's a serious tradeoff here. Food service is a reliable source of job growth precisely because it's a low-wage sector. Higher pay pushes employers toward automation, and it pushes consumers toward less labor-intensive forms of prepared foods or even gasp cooking for themselves.
The real trick is to raise living standards without raising the cost structure for working-class employment. By reducing the power of the doctors' cartel, for example, we raise real wages for everyone who needs medical care. Serious patent reform by which I mean granting many fewer patent monopolies if we grant any at all, not just tackling "trolls"_ would have the same effect. We need to crack down on the broadband trusts, and stop showering money on the most exclusionary colleges in America.
All of which is to say that real wages and living standards have both a numerator and a denominator. The most sustainable way to tackle the problem of stagnating or falling working-class incomes is to work on the denominator on the various regulatory privileges used by the wealthy and powerful to entrench their income and raise costs for everyone else. Snob zoning laws that keep mobile homes out of neighborhoods where land is cheap and that dense apartment buildings and rooming houses out of places where it's expensive are a huge part of the problem. So are rules that make it harder to open new bars and restaurants, raising prices by reducing competition while also reducing job opportunities. Of course, taxing the rich to give everyone free money is also a great idea with a solid historical track record.
The point is that despite a grim economic situation over the past several years, a much brighter future is within our grasp. To build it takes courage and tough political calls. It also takes clear thinking about the evolving economy and business landscape. And that means giving food service in general, and fast food in particular, its due.
Yglesias is Slate's business and economics correspondent.
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