At Fox Business Network on Monday, Stuart Varney interviewed Zane Tankel, the Chairman and CEO of Apple-Metro Inc., the New York City metro area Applebee's franchisee.
While discussing the impact of minimum-wage laws on his business, he effectively brought up another law, the one in economics known as supply and demand, informing Varney that "We have 1,000 less servers this time this year than we had this time last year."
As the easily predictable evidence of job losses continues to pile up, those who continue to support above-market minimum wages, especially those in the establishment press, will surely discount Tankel's story as "just an anecdote." They do so at the peril of the people they claim to be trying to help, because Tankel is far from done trimming his payrolls, and his competitors in casual dining and fast food are also hard to work substituting technology for labor.
The full Monday interview is here. The segment below concentrates on the direct impact minimum-wage laws have had on employment at the 40 Applebee's restaurants he owns:
Transcript (bolds are mine):
ZANE TANKEL: If something becomes prohibitively priced, you find an alternative.
STUART VARNEY, FBN: Of course.
TANKEL: I've always said increasing minimum wage is technology's best friend. We have 1,000 less servers this time this year than we had this time last year.
VARNEY: Really?
TANKEL: Yes sir.
VARNEY: And you run, what, 42, 43 Applebee's.
TANKEL: 40.
VARNEY: Okay, about 40. So you've got 1,000 fewer wait staff.
TANKEL: Yes sir.
VARNEY: So what you do nowadays is you employ technology.
TANKEL: Yes sir.
VARNEY: And you have runners from the kitchen to the table -
TANKEL: Exactly.
VARNEY: That's how you —
TANKEL: You know the business.
VARNEY: Well, I've been to Newark Airport. I see this constantly, and that's what you see.
TANKEL: We're not quite Newark Airport, because that's really impersonal, people passing through. We have servers, but they're moving — more and more the model is to a concierge type of a person, comes to the table, "Can I help you? Do you need assistance with the tablets? Can I get you anything immediately?" And making people feel warm and comfortable.
So that the model now that we're heading towards where we had one server for three or four tables, we're moving towards one server for ten tables, eliminating about two-thirds of our labor ultimately. But it's because of Cuomo, De Blasio, the liberal agenda.
It's all really good if you have a job.
VARNEY: Yes.
TANKEL: Right? If you don't have a job.
VARNEY: (If) you're a youngster, you want to get your first foot on the rung of that ladder going up the food chain.
TANKEL: Exactly. Stuart, if you don't have a job, $100 an hour doesn't help you a whole lot, does it?
One key word in the Tankel interview: "Ultimately." In other words, the number of job cuts thus far would appear to be nowhere near the end of the line, even if he's limiting his discussion of "labor" to wait staff and excluding cooks and managers.
In a separate interview in January seen here (HT longtime commenter dscott), Tankel indicated that he had already cut 500 jobs, "about 15 percent of our total labor force." That would imply that by the time the "concierge" model is fully adopted, about 2,000 positions will have been eliminated.
He also noted in that January interview that raising menu prices was not an option, something minimum-wage proponents tend to nonchalantly assume is a viable option:
The consumer's head is hitting the ceiling now on dining out, outside dining, fast food, casual dining, etc. We can't raise prices any more ...
Other fast-food and casual-dining chains too numerous to mention here are also using technology to cut down on labor.
Is rampant job loss among relatively unskilled workers what the "Fight for 15" people really want? Because from all appearances, that's what they'll get.
Cross-posted at BizzyBlog.com.
