Political  Calculations

It's often assumed that the kind of technology that automates the jobs that low income earners can do will come to replace the people who do those jobs. But is that really true?

The answer to that question is that it depends. The reason it depends is because new technologies can impact more than just the cost of labor for employers. They can also be used to generate more revenue than could be achieved without the use of the technology, allowing an employer to grow their business by enough of a margin so that no jobs need to be cut, or can even be added to facilitate the business' growth.

With that in mind, consider the arrival of thousands of table-based tablets at many U.S. restaurants, where the early indications is that they boost restaurant revenue by a large enough margin that the restaurants that have incorporated the technology have no plans to trim their wait staffs. Via Core77:

I learned a few things as a waiter in the '80s and '90s. One was that spiked hair and a fanny pack was not a good look. The other was that a server's job isn't just to take the orders and sling the chow—our job was to sell. Bigger checks meant bigger tips, and the manager was constantly coaching us on which high-margin specials to push, which desserts we needed to move, what the exciting new beer we had on tap was.

Well, now the Chili's Grill & Bar chain has found that, surprise surprise, tablets are better than humans at selling. "When your server is a screen, you spend more money," as The Atlantic puts it. Since installing over 55,000 tablets at tables, the restaurant has found that diners order more appetizers and desserts and even leave bigger tips by going along with the default tip setting, which is of course jacked up. They also tie the kids up with unlimited on-screen games that run $0.99.

Political Calculations

Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.

Be the first to read Political Calculation's column. Sign up today and receive Townhall.com delivered each morning to your inbox.


Get the best of Townhall Finance Daily delivered straight to your inbox

Follow Townhall Finance!