- Perhaps someday in the far future we'll be telling our grandkids about how restaurants once had human servers.
Instead of ordering from a kiosk or a phone a flesh and blood employee would come to your table, offer recommendations, and take your order.
So old fashioned, right?
- Yes, it seems like many of the food service technologies popularized during the pandemic are sticking around.
Even though the majority of Americans are vaccinated and we've largely gone back to eating maskless indoors, we're still scanning QR codes and scrolling through digital menus.
Why is that?
- Of course, COVID is still with us and still poses a threat to vulnerable people but we now know that you're far more likely to get it from the air than a piece of paper.
The reason we haven't reverted back to pre-pandemic dining trends has less to do with epidemiology or even technology than economics.
Specifically labor economics.
(upbeat music) - It's been called The Great Resignation, The Great Renegotiation, or The Great Reshuffle and it refers to an unprecedented spike in Americans voluntarily leaving their jobs beginning in early 2021.
At first, some politicians were quick to accuse people of being lazy, opting to live off government handouts rather than work for a living.
But as the picture became clear, economists found that most quitters were not leaving the workforce-- they were looking for a better job.
- And for a lot of them it worked.
In many regions, workforce participation is back up to or even higher than it was pre-pandemic.
Wages have risen virtually across the board although inflation has taken a chunk out of that and many workers find that they have more power and flexibility at their jobs than they did before.
- However, there are a few sectors still struggling to fill vacant positions, and hospitality is at the top of that list.
As of the summer of 2022, food service employment is still 6% below pre-pandemic levels.
There are two big reasons: as non-essential businesses, many restaurants closed their doors at the beginning of the pandemic.
Since their employees were some of the first to be laid off or furloughed they were also the first to find new jobs, many in burgeoning sectors like tech and logistics.
When the restaurant industry finally started to come back they found that their employees didn't want to... come back.
- That leads us to the second big reason.
These jobs were never that good to begin with.
Low pay, unpredictable schedules, lack of benefits and advancement potential.
Many of the people who used to work in the food service industry prefer their new jobs more, quoting higher pay and flexibility as the most important factors.
- But wait, if these jobs were so lousy, why did it take a pandemic for cooks and servers to finally leave the apron behind?
- The short answer is that the labor market is much tighter now due to several factors.
Not everyone who quit found another job.
Some started their own businesses, some went back to school.
A lot of baby boomers saw the pandemic as a good time to retire, taking their decades of work experience with them.
Gen-Zers have less interest in food service as a temporary job and more restrictive immigration policies have meant less migrant labor as well.
The cumulative result is that there aren't enough applicants to fill all the available positions, giving workers more leverage and choice.
- That's great for workers, but rough for the industry and it creates a destructive spiral.
Short staffed restaurants ask their employees to work harder.
Customers are less satisfied, giving more complaints and fewer tips.
As the job becomes less worth it more people quit and the problem gets worse.
- Employers are aware of the dilemma and many are putting their faith in technology as the magic solution.
QR codes, online menus, phone payments, robot servers-- anything that can cut down the number of humans on staff is being implemented.
There are even some artificial intelligence technologies being developed that can, say, understand a customer's spoken order at a drive-through or predict what ingredients to order from vendors to minimize food waste.
According to one survey, more than 75% of eateries now use at least three automated tools.
And the restaurant management software market is expected to grow by almost 16% annually over the next decade.
- But not everyone is on board.
Some food service employees say that working alongside tech makes the job harder, not easier.
Not all customers have smartphones and some that do aren't comfortable navigating technology.
Servers often have to play the role of tech support and may receive smaller tips from irritated diners.
Mobile ordering also encourages customers to make more additions and special requests while expecting machine-like speed and accuracy.
Servers and baristas who once prided themselves on their interpersonal skills now feel like dehumanized vending machines.
- It's not very pleasant for the customers either.
A study done by social psychologist Ryan Dwyer found that cell phone use during social interactions like shared meals decreased the enjoyment of the experience for everyone.
And we all know that using your phone for one thing, like ordering a drink can easily spiral into checking your email replying to texts, and scrolling through Insta.
- There are other unforeseen consequences of restaurant tech.
Many of these automated systems like the rest of the internet, collect data about you and your eating habits and share it with advertisers.
Some industry experts see a future where your menu is tailored specifically to you with prices that fluctuate depending on what's available or nearing expiration.
While it could be handy to have a menu that remembers your food allergies, surge pricing for meals has been met with pretty fierce backlash where it's been tried.
Imagine seeing your steak dinner go on sale right after you finished eating it.
- Besides eating out isn't just about acquiring a meal as efficiently as possible.
If that's your priority, you're better off ordering in.
As we said in a previous video you're paying not just for food, but an environment in which you can have meaningful human interactions.
Some restaurateurs still believe that the classic dining experience is what customers are looking for, and the only way to save it is to make the jobs more attractive to prospective and current employees.
- That can mean paying higher wages allowing more flexible schedules and offering benefits and perks.
But at a time when 53% of Americans have already cut back on dining out when food costs are up by 17% and 41% of restaurants can't even afford the rent where will they get the money to pay employees more?
Some are raising their prices others shrinking their menus or shortening their hours.
And many say that investing in an experienced staff is actually more cost effective.
Turnover is expensive.
You can end up spending more on training and recruitment than on the perks it would take to retain valuable employees.
- No one knows what will happen to the industry but the next couple years are likely to be transformative.
Perhaps dining in the future will be like stepping into an automated vending machine or maybe careers in food service will finally get the respect and compensation they deserve.
Or a potential recession could erode labor's bargaining power and restaurants will go back to business as usual.
- Like most economics, it's a question of values.
How much do diners value the traditional restaurant experience?
How much do employers value their employees?
- And how much do we all value face-to-face human connections?
