Thanks To 'Fight For $15' Minimum Wage, McDonald's Unveils Job-Replacing Self-Service Kiosks Nationwide

GUEST POST WRITTEN BY

Ed Rensi

Mr. Rensi is the former president and CEO of McDonald’s USA.

McDonald’s restaurant employees rally after walking off the job to demand a $15 per hour wage and union rights during nationwide ‘Fight for $15 Day of Disruption’ protests on November 29, 2016 in Los Angeles, California. (David McNew/Getty Images)

As the labor union-backed Fight for $15 begins yet another nationwide strike on November 29, I have a simple message for the protest organizers and the reporters covering them: I told you so.

It brings me no joy to write these words. The push for a $15 starter wage has negatively impacted the career prospects of employees who were just getting started in the workforce while extinguishing the businesses that employed them. I wish it were not so. But it’s important to document these consequences, lest policymakers elsewhere decide that the $15 movement is worth embracing.

Watch on Forbes: $15 Minimum Wage, What We Can Expect

Let’s start with automation. In 2013, when the Fight for $15 was still in its growth stage, I and others warned that union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real.

Earlier this month, McDonald’s announced the nationwide roll-out of touchscreen self-service kiosks. In a video the company released to showcase the new customer experience, it’s striking to see employees who once would have managed a cash register now reduced to monitoring a customer’s choices at an iPad-style kiosk.

It’s not just McDonald’s that has embraced job-replacing technology. Numerous restaurant chains (both quick service and full service) have looked to computer tablets as a solution for rising labor costs that won’t adversely impact the customer’s experience. Eatsa, a fully-automated restaurant concept, now has five locations—all in cities or states that have embraced a $15 minimum wage. And in a scene stolen from The Jetsons, the Starship delivery robot is now navigating the streets of San Francisco with groceries and other consumer goods. The company’s founder pointed to a rising minimum wage as a key factor driving the growth of his automated delivery business.Of course, not all businesses have the capital necessary to shift from full-service to self-service. And that brings me to my next correct prediction–that a $15 minimum wage would force many small businesses to lay off staff, seek less-costly locations, or close altogether.

Tragically, these stories—in California in particular–are too numerous to cite in detail here. They include a bookstore in Roseville, a pub in Fresno, restaurants and bakeries in San Francisco, a coffee shop in Berkeley, grocery stores in Oakland, a grill in Santa Clara, and apparel manufacturers through the state. In September of this year, nearly one-quarter of restaurant closures in the Bay Area cited labor costs as one of the reasons for shutting down operations. And just this past week, a California-based communications firm announced it was moving 75 call center jobs from San Diego to El Paso, citing the state’s rising minimum as the “deciding factor.” (Dozens of additional stories can be found at the website FacesOf15.com.)

A crowd of about 350 protesters stand on Broadway in front of a McDonald’s restaurant, Tuesday, Nov. 29, 2016, in New York. (AP Photo/Mark Lennihan)

Other states are also learning the same basic economic lesson: Customers have a limit to what they will pay for service. Voters in Washington, Colorado, Maine and Arizona voted to raise minimum wages on Election Day, convinced of the policy’s merits after millions of dollars were spent by union advocates. In the immediate aftermath, family-owned restaurants, coffee shops and even childcare providers have struggled to absorb the coming cost increase—with parents paying the cost through steeper childcare bills, and employees paying the cost through reduced shift hours or none at all.

The out-of-state labor groups who funded these initiatives aren’t shedding tears over the consequences. Like their Soviet-era predecessors who foolishly thought they could centrally manage prices and business operations to fit an idealistic worldview, economic reality keeps ruining the model of all gain and no pain. This brings me to my last correct prediction, which is that the Fight for $15 was always more a creation of the left-wing Service Employees International Union (SEIU) rather than a legitimate grassroots effort. Reuters reported last year that, based on federal filings, the SEIU had spent anywhere from $24 million to $50 million on the its Fight for $15 campaign, and the number has surely increased since then.

This money has bought the union a lot of protesters and media coverage. You can expect more of it on November 29. But the real faces of the Fight for $15 are the young people and small business owners who have had their futures compromised. Those faces are not happy ones.

The Fresh Food Supply Chain and Product Safety

By Randy Fields

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A look at how the perimeter departments are being impacted differently under FSMA versus the center store.

Fresh foods are critically important to grocery retailers because these categories help create a point of differentiation from competitors. Store operators highlight the fresh sections in ads, promote the categories with in-store signage and now support the departments digitally and through social media. This isn’t to say the center store dry grocery items aren’t marketed, but they don’t get the advertising and promotional love that the produce, meat, dairy, deli, bakery and floral areas receive.

Given this focus, retailers and their suppliers work diligently to ensure the safety of the fresh products offered. They know that one slipup in produce or the deli can wreck the company’s reputation for months or longer. This is particularly true for the many fresh products that don’t have a brand standing behind them to share the impact (or blame).

Ask retail food safety directors where they spend most of their time and the answer 90+ times out of 100 is in the fresh areas. There are simply more things that can potentially go wrong in fresh and less that can go wrong with dry grocery. Sure there is the occasional ingredient issue, but the center store doesn’t have to worry about spoilage or even packaging problems now that nearly everything is tamper proof.

The bioterrorism act mandates that each link in the supply chain knows where their ingredients or product came from and where it was distributed. Recently, much effort has gone into developing traceability technologies and processes with the produce supply chain taking the lead. Growers and their trading partners are piecing together systems that allow practitioners to follow each batch of product through to the retail store, but the operative phrase is “piecing together.” Very few technologies can provide complete farm-to-fork traceability without standard product identification codes used by all participants in the supply chain. When a participant does not use the standard product identifier, visibility to the path of a product ends.

On the regulation front, the seven FSMA rules move the emphasis of the FDA from detection and response to prevention, which impacts both fresh and shelf-stable products. On a practical level, however, compliance with the rules is often more challenging for fresh products because of their limited shelf life. Also, some of the rules apply specifically to produce, meaning retailers and their produce suppliers need to pay special attention to preventing foodborne illness in the department.

At the recent Produce Marketing Association’s Fresh Summit in Orlando, Bob Whitaker, Ph.D., the trade group’s chief science & technology officer, and Jim Gorny, Ph.D., vice president, Food Safety & Technology, both emphasized the importance of communicating each retailer’s and supplier’s compliance with the FSMA regulations to the consumer. The North American Meat Institute, International Dairy-Deli-Bakery Association and other trade groups representing the marketers of fresh products have also been very active in helping both retailers and suppliers comply with the new regulations.

Beyond FSMA, retailers and their fresh foods suppliers need to do more work to not only ensure a safer supply chain, but to let consumers know they are working on food safety every day. Transparency needs to extend throughout the supply chain so suppliers and carriers can report on any potential safety issue from the farm to the checkout stand, because retailers are requiring more support from suppliers and more documentation for each load received. And, audits need to be periodically conducted to ensure accepted industry best practices are being followed.

Technology is helping the food safety process, especially in the fresh area, by organizing documentation for FSMA compliance and by providing supply chain transparency. The systems now available integrate all product and vendor information into a retailer’s ordering systems to ensure every requirement is met before a purchase is completed. They also send out alerts when additional details are required and they confirm that each lot shipped adheres to accepted best practices for food safety.

At the end of the day, all items sold in a supermarket or online must be safe for the consumer. The challenge is somewhat bigger with fresh foods than it is with dry grocery, so retailers and their suppliers must work that much harder to ensure the safety of products sold to their customers. A combination of accurate document management, compliance audits and traceability technology is now the most likely scenario to accomplish this goal.

Spoiler Alert: It makes sure nothing goes to waste

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PAT GREENHOUSE/GLOBE STAFF/FILE

The Greater Boston Food Bank has tapped into the Boston-based food-matching platform Spoiler Alert.

By Janelle Nanos GLOBE STAFF  NOVEMBER 27, 2016

In mid-September, the Greater Boston Food Bank received an unexpected bonanza: a donation of 11,000 organic eggs. But there was a problem. The nonprofit can distribute only unexpired food, and the expiration date on the eggs was approaching fast.

Fortunately, the region’s biggest food bank uses Spoiler Alert, a platform that connects distributors with food-rescue organizations. Within three hours, the eggs were claimed, scrambled, and served at a Salvation Army community center in Dorchester, and used in the teaching kitchen in the center’s culinary arts training program.

Spoiled food is a costly problem, accounting for about $218 billion in financial losses to US farms, businesses, and consumers each year, according to ReFED, a group of companies, nonprofits, and foundations that was formed last year to minimize food waste. Since its launch in 2015, Spoiler Alert’s food-matching platform has been adopted by 200 businesses and nonprofits in New England to cut down on waste and encourage donations by making them easier to track.

The company was created by two MIT Sloan School of Management graduates, Ricky Ashenfelter and Emily Malina, and their chief technology officer, Marty Sirkin, and has worked its way through the city’s accelerator programs, winning $50,000 from MassChallenge in 2015 and a spot in this year’s Techstars Boston cohort.

Earlier this month, it raised a $2.5 million seed round and announced a partnership with Sysco Corp., the largest wholesale food distributor in the country. Sysco generated more than $50 billion in revenue in the year ended in July, distributing food to restaurants, hospitals, universities, and hotels in the United States, and has begun using Spoiler Alert in the Northeast to help manage food donation efforts.

Spoiler Alert’s desktop software makes it easy for food distributors to put a bat signal-like alert up whenever they have excess food, and people registered for the service receive a text, e-mail, or in-app notification every time that such food becomes available.

“At Daily Table I like to think of Spoiler Alert as an opportunity to further meet our mission of capturing healthy, tasty products before they make it to compost or trash,” said Ismail Samad, executive chef of the Dorchester grocery store, which sells food and prepared meals gleaned from donations. He said he relies heavily on Spoiler Alert to source the food for his store shelves.

But part of Spoiler Alert’s recent success can be credited to another, rather wonky aspect of its platform, which helps companies navigate the tax code. Last December, Congress passed a bill that expanded the tax breaks companies can receive for donating food, making it easier for small businesses to donate and for farmers to assess the fair market value of their inventories.

Spoiler Alert’s software streamlines the process for donors to keep track of what they’re giving away, helping them account for the price, cost, and weight of every apple or mayonnaise jar they donate using the stock keeping unit (SKU) numbers in their inventory systems.

In turn, the nonprofits receiving the food are able to electronically sign off on the donations. The result is an automated list of deductions with documented receipts, making a clean and simple record for tax purposes. The company’s theory is that if they make it easier for companies to process tax paperwork, they’ll rescue more food.

“There is more than just good will associated with food waste management or donation facilitation,” said Ashenfelter, the company’s chief executive. “There’s actually some real business value that major corporations can achieve through tax benefits and reductions in waste hauling.”

David Constantine, chief executive of the health startup Kindrdfood and one of the cofounders of MassChallenge, said Spoiler Alert’s plan to position itself to work with the tax code makes it interesting for investors, as they see the opportunity for scale.

“If you read their website, they’re a technology company, but it’s not like they created a software system that’s never been dreamed of before,” he said. “They went after a supply opportunity and linked up stakeholders and found a great way to make incentives align for tax purposes.”

The company’s founders are optimistic that the tax breaks for charitable contributions will remain in place under a new Trump administration, and hope that their focus on the economic benefits that corporations can obtain through donations will appeal to lawmakers of any political persuasion.

“The bottom line has always been a very important part of how we talk about and market Spoiler Alert,” said chief product officer Emily Malina. “We want to help companies do good for their communities and talking about the cost and tax savings has always been an important part of that conversation.”

USDA FORECASTS 2016 GROCERY STORE FOOD PRICE DECLINE

BY DTN Washington Insider | November 28, 2016

Food-at-home (supermarket) prices are now forecast to decrease between 1.25% and .25% in 2016, the first year since 1967 that grocery store food prices could reflect annual deflation, according to an updated forecast from USDA’s Economic Research Service (ERS).

“Recent declines in prices for beef and veal, poultry, and eggs” are behind the now-lower forecast, ERS noted. “Lower transportation costs due to deflated oil prices as well as the strength of the US dollar have placed additional downward pressure on food prices in the first half of 2016. A strong U.S. dollar makes U.S. goods less desirable to foreign markets, leaving more potential exports on the domestic market. Comparing the 2015 average price level with the 2016 level to date, the CPI for food-at-home is down 1.1%.”

Another factor: “Retail food prices have remained flat or decreased for eight of the first ten months in 2016.”

The reduction in grocery store prices also lowered the overall food price increase to a range of 0.25% to 1.25%, putting the rise in line with the lowest level seen since at least 1974 of an increase of 0.8% seen in 2010.

One area not revised is for forecast for food-away-from-home costs to rise 2.5% to 3.5%. “Food-away-from-home prices have been rising consistently month-over-month due, in part, to differences in the cost structure of restaurants versus supermarkets or grocery stores,” ERS observed. “Restaurant prices primarily comprise labor and rental costs with only a small portion going toward food. For this reason, decreasing farm-level and wholesale food prices have had less of an impact on restaurant menu prices.”

While forecast to rise in 2017, ERS economists now forecast that increase to be just 0.5% to 1.5%, down from their month-ago outlook. “Despite the expectation for declining prices in 2016, poultry, fish and seafood, and dairy prices are expected to rise in 2017,” ERS said. They included their usual caveat that weather, unforeseen events, the value of the US dollar or shifts in energy prices could alter the 2017 outlook.

Reductions in 2016 from forecasts the prior month were noted in meats, poultry, fish, eggs and dairy products, with individual meat products such as pork, beef and other meets revised down again.

Organic Food Market to Grow at CAGR 14% Until 2021

Growing awareness among consumers about health benefits of consuming organically produced food drives upward trajectory

According to TechSci Research report, "Global Organic Food Market By Product Type, By Region, Competition Forecast and Opportunities, 2011 - 2021", global organic food market is projected to grow at a CAGR of over 14%, during 2016-2021, on account of rising disposable income coupled with growing awareness among consumers about health benefits of consuming organically produced food. Additionally, rising internet penetration, aggressive marketing strategies by major companies and easy availability of these food products on the back of robust distribution network are projected to boost sales of organic food across the globe. In 2016, about 43.7 million hectares of agricultural land was under organic cultivation, which was managed by over 2.3 million producers across the globe. Moreover, leading players operating in global organic food market are offering these products in environment friendly packaging to lure consumers.

North America and Europe dominated global organic food market and accounted for a cumulative revenue share of around 80% in 2015.These regions are expected to generate significant demand for organic food products through 2021, due to rising disposable income levels and well developed distribution network to ensure availability of a wide variety of organic food products. Additionally, organic fruit & vegetables dominated global organic food market in 2015, as these products are cultivated without the use of chemical fertilizers and pesticides. However, demand for organic processed food is anticipated to grow at a robust pace during the forecast period,on account of changing lifestyles, rising working women population base and scarcity of time.White Wave Foods, Hain Celestial, General Mills, UNFI, Sprouts Farmers Market and Edeka Group arefew of the major players operating in the global organic food market.

"Increasing average household annual spending on food, rising awareness about health benefits associated with organic foods, greater accessibility of these products through small to medium scale retailers, continuous development in supply chain network and implementation of initiatives to encourage farmers to switch to organic farming are projected to fuel organic food sales across the globe. Additionally, a number of organic food manufacturers are also complying with international standards and are labelling their products accordingly in order to increase acceptability of these products across the globe." said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.

"Global Organic Food Market By Product Type, By Region, Competition Forecast and Opportunities, 2011 - 2021” has evaluated future growth potential of global organic food market and provides statistics and information on market structure, size, share and future growth. The report is intended to provide cutting-edge market intelligence and help decision makers to take sound investment evaluation. Besides, the report also identifies and analyzes emerging trends along with essential drivers, challenges and opportunities present in global organic food market.

What Supermarkets Reveal About Inequality

BY LEAH BINKOVITZ · NOVEMBER 21, 2016

Leah Binkovitz | @leahbink | November 21, 2016

Via Flickr user I-5 Design and Manufacture.

By 2050, the United States is expected to be roughly 46 percent white, 30 percent Hispanic and 12 percent black, according to Rice University’s Hobby Center for the Study of Texas.

Meanwhile Texas’s own demographics are ahead of the curve, clocking in at 45 percent white, 38 percent Hispanic and 12 percent black back in 2010.

But despite that diversity, historically, sociologists and others who study inequality have focused largely on disparities between just two groups, whites and blacks.

A new study co-written by Kinder Institute researchers and published in the journal Race and Social Problems suggests that method is likely outdated, given the shifting demographics of the country. Too often, the discussion leaves out the huge, and growing, Hispanic population group.

The typical black-white way of studying inequality may have “outlived its relevance” and needs to be reassessed, write Kinder Institute research fellow Heather O’Connell, Rice University associate sociology professor Jenifer Bratter and Lester King, a researcher with Houston Sustainability Indicators Project at Rice University in the paper titled “Community Resources in a Diverse City: Supermarket Location and Emerging Racial Hierarchies.”

Focusing on access to supermarkets in Houston, the researchers assessed how Houston’s large Hispanic population fit into the better-documented black-white disparities.

Houston’s demographic transformation provided the perfect testing ground. The city transitioned “from an essentially biracial Southern city into the single most ethnically and culturally diverse large metropolitan region in the nation,” as the Kinder Houston Area Survey puts it. The city is roughly 44 percent Hispanic, 26 percent white, 23 percent black and 6 percent Asian, according to the latest census estimates.

From the report: Block Groups with a Supermarket within Half a Mile in the City of Houston, 2010.

Supermarket access has consistently served as a “symbol of neighborhood quality and community-investment,” the report explains. Others agree. The Houston Grocery Access Task Force, convened by the city as a public-private response to inequalities, has also highlighted supermarkets’ connection to community health, housing values and employment opportunities.

“Many communities that are underserved by supermarkets also lack other important amenities and services needed to attract and retain retail investment, such as sidewalks, lighting and good transportation networks,” a 2012 report from the task force concluded.

In their analysis, the Rice University researchers focused on large grocery stores that had a payroll of at least 50 workers, chain name recognition, and at least $2 million in annual sales. That approach often excludes smaller stores and ethnic markets, they acknowledged, but was consistent with efforts to examine whether an area was receiving significant external investment.

They found that white-black disparities persisted when it came to supermarket access, “even after accounting for local differences in economic composition.”

“Increasing racial [and] ethnic diversity, even in Houston, is not erasing the social consequences of race in our society,” said O’Connell.

But the report also found a more detailed breakdown of disadvantage in what it described as a “tri-racial system.”

Using data from the American Community Survey, the 2010 census and 2010 business listings of big-name supermarkets, the researchers categorized neighborhoods by the racial/ethnic majority in each areas, as well as the second-largest racial or ethnic group. They would up with pairings like white-Asian or Hispanic-black.

Overall, roughly half of Houston’s block groups are within a half-mile of a supermarket. But, because of clustering, they’re not evenly spread throughout the city. “This clustering leaves some areas of the city with relatively less investment, particularly when comparing the southern and northeastern portions of the city with the northwestern corner of the city,” the authors explain.

That’s where the neighborhood categories come in. The most consistent predictor of a neighborhood not having access to a supermarket is the size of its black population. Communities that were majority white with Asians as the second-most populous group were the most likely to have a supermarket within walking distance. They were followed by Hispanic majority neighborhoods that had a sizable Asian population, then by neighborhoods with no majority.

The researchers identified these three types of neighborhoods as the most advantaged in terms of supermarket access. At the bottom of the list were black-Hispanic, white-black and black-white communities.

After controlling for median income, population and land size, intersection density, percentage of people with a college degree and the concentration of retail jobs, the researchers found that 80 percent of neighborhoods with a majority of white residents followed by Asian residents were expected to have a supermarket within a half mile, compared to only 30 percent of neighborhoods with a majority of black residents followed by white residents.

The predicted probability that each neighborhood will have a supermarket within a half mile.

In the middle, the researchers found a third tier of stratification for largely Hispanic communities. The findings also point to substantial differences even among majority white spaces. So, while a neighborhood dominated by white and Asian populations is most likely to have a supermarket nearby, a white-majority neighborhood where black residents made up the second largest group is one of the least likely to have a supermarket within a half-mile.

“What this tri-racial system tells us is that social stratification is happening along multiple racial and ethnic lines and to somewhat differing degrees depending on the group,” said O’Connell.