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Starbucks’ AI Coffee Makers: A Productivity Case Study

Automation could allow baristas to be paid more and still net higher profits for company

William A. Levinson
Tue, 08/29/2023 - 12:03
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Starbucks’ implementation of artificial intelligence coffee makers1 offers a simple and ideal case study that can illustrate the synergy between efficiency, wages, profits, and inflation. Even if we don’t know the actual cost figures, we can use some hypothetical numbers to demonstrate how higher efficiency enables higher wages, higher profits, and lower prices.

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Although pressure to increase wages is generally linked to inflation,2 this paradigm assumes the higher wages aren’t driven by higher productivity. When workers become more productive, their product or service becomes cheaper rather than more expensive, and this is deflationary.

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Comments

Submitted by Anonymous (not verified) on Thu, 08/31/2023 - 15:21

This article was total

This article was total confusing and the author's message is completely garbled. 

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Submitted by Anonymous (not verified) on Sun, 09/03/2023 - 05:55

Outdated thinking

The link between productivity - pay was broken a lifetime ago and the gap has remained 3.5x. 

Emerson and Ford thinking is long gone. 

Automate and improve productivity to increase profitsand improve service - maybe improve working conditions. But don't kid yourself that it will drive up wages. The evidence has been clear for over 40 years. 

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