Decades of McDonald’s, there was White Castle. Thanks to historians The hamburger chain with the creation of modern fast food industry as we know it.
the Legend goes The founder of White Walter “Walt” and Anderson began making Hambrager in early to mid -1910 after it became disappointed by the time it took to cook meat balls. One day, Anderson broke the meat ball with a spoon and prosperity, he had a hamburger pie that could cook much faster. If this is true, Anderson’s embrace of Hamerger was really part of seeking more productivity – to cook and sell more meat sandwiches in less time.
It may or not to be the story of the origin is false, but after the establishment of White Castle in 1921, Anderson and his co -founder, Billy Ingram, were pioneering in many distinctive features of the fast food industry, including helping hamperger from national basics, and unified practices through their assembly restaurant series. The white castle took a lot of pain to be fruitful, such as Burger Square To increase the number of burgers that can suit the grill, and reduce its list on a few elements, which simplifies the process of preparing food and cooking and serving. (To learn more about the pioneering history of the White Castle, listen to this Planet money Cooperation with 99 % invisible).
So, yes, from the beginning, fast food restaurants are designed to be an example of productivity. Almost everything about them was directed towards customer service as quickly as possible and efficiently.
However, according to a new study, fast restaurants and other restaurants stopped seeing productivity gains between 1992 and 2019. While the productivity of the rest of the economy “has grown steadily”, “flat” remained for restaurants. Fast food chains and other restaurants have struggled to find innovative ways to serve customers in a faster clip.
The study does not dig about the reason for seeing restaurants slowing out the growth of productivity. Perhaps after many years of innovations, fast food restaurants hit a roof and faced a problem finding more efficiency. They seem to have failed to take advantage of major technological changes, such as the collective adoption of the Internet and smartphones, to serve customers faster. Or maybe fast food chains simplified their commercial operations with the help of new technologies, but at the same time, there may be anti -productivity forces. For example, perhaps consumers I started to want a variety of food Fast food companies diversify their lists, making food preparation more complicated and slower. Whatever the reason, this study you find, fast food and other restaurants have stopped seeing a significant growth of productivity for nearly 30 years.
But according to this new study, this changed dramatically during the Covid-19s. Fast food and other restaurants have witnessed a “amazing increase” in productivity-and has been more productive since then.
What caused this “strange increase” in productivity? This day in Planet money Newsletter.
Beyond increased productivity
The name of the study is “The strange increase in productivity in American restaurants“This is by economists Austan Golsby, Chad Sephrson, Rebecca Goldgov, and Joe Tatarka.
When the epidemic was struck in 2020, economists found that the restaurant industry witnessed a brief but sharp decline in productivity. There were a lot of disturbances in business during the era of closure and far social, which harm the ability of restaurants to serve customers.
However, shortly after, something great started to happen: restaurants woke up from decades’ productivity slumber and began to innovate to serve customers faster.
Economists found that after 2020, the restaurant industry witnessed an increase in productivity “to a 15 % higher level of the stable pre -stable state. This increase continued even with the emergence of total economic conditions to normal.” In other words, the average restaurant witnessed 15 % sales per employee.
Why did this happen? Economists go through various explanations to increase productivity and then demolish most of them.
Is this perhaps just a strange coincidence related to data in data? no. They found a constant change through multiple data sets.
Is this perhaps because many restaurants died through the epidemic, and this helped give a boost to the restaurants that survived? In particular, has the remaining restaurants found costs and efficiency – in Econospeak, “Frames of Size” – because they now have less competition and a larger group of customers? No, economists found. Data does not support this hypothesis.
To find the answer to the reason for the increasing productivity of restaurants, economists have turned into “microdata” from smartphones. This data provides systematic information about things like the time spent by customers in restaurants. They say this data is more comprehensive for fast food restaurants (also known as “limited service”), so it focused on this sector of the market. Their data covers visits to “more than 100,000 restaurants throughout the United States” from January 2019 to December 2022, which represents about $ 24 billion in sales.
Why did fast food restaurants become more productive? Economists found a big idea of ​​data: the average length of customers who spent it in restaurants decreased, and the percentage of customers who spend less than 10 minutes increased in restaurants. And who spends less than 10 minutes in a restaurant? Customers and delivery! Since the epidemic, customers wanted to eat and deliver much more than before. Economists say this change in consumer behavior enabled restaurants to re -renew their business operations and work in innovative ways.
“Restaurants have discovered how to serve more customers faster, especially the type that will not be there long,” says Chad Sevson, an economist at Bath College of Business at the University of Chicago, who participated in the authorship of this study. “They have seen a special increase in the number of customers who can meet their requests and get out of the door in less than 10 minutes.”
Although economists’ data does not determine exactly what companies have done to accommodate customers faster, Syverson refers to various anecdotal examples. For example, restaurants began to use smart phone applications to interact with customers much more through the epidemic. And they started doing things such as building a food shelves outside, so that customers can order meals on the Internet, then-or to deliver people-they can only enter and seize this food quickly. Another example: some fast food restaurants Their paths doubled More workers are devoted to receiving driving orders.
Economists found that restaurants that managed to investigate service and delivery – as the “client time” was shortened – witnessed the largest storms of productivity.
And I think you, eat and deliver, by definition, means that customers do not sit and eat in the restaurant, and this also means that workers in restaurants had to spend less time cleaning tables, floors and bathrooms. For popular restaurants in particular, a greater number of clients who are ready to eat outside the buildings also helped to remove limited physical space restrictions within their buildings, allowing them to provide a larger consumers base.
In addition, many companies have struggled to employ workers in the narrow labor market during this period, and this may have given an additional incentive for companies to know more productive ways to spread technology and workers. “It is necessary to be the mother of the invention,” Severson says. “
What does this mean for fast food workers and consumers?
ECON 101 suggests that when workers are more productive and thus create more value, employers will pay them more.
However, contracts of search, including by by Massachusetts Institute for Economics of Technology Darwin Asimoglu and Simon JohnsonThis is not an automatic process. Sometimes, workers may need to organize, hit, or elect politicians who pass policies such as the minimum higher wages to force employers to share high productivity fruits with their workers.
“We know that the wages in the restaurant industry have witnessed very rapid growth – much higher than the average – it comes out of the epidemic,” says Sevson. So, the total patterns line up. We do not have wage data at the restaurant level, so I cannot say for sure whether the relationship of wage production continues across restaurants. But my long -term speculation is based (which was seen in many markets) that wages and productivity tend to move together. Certainly I will not think about this productive opening as a bad news for workers. “
Well, this is restaurant workers. Maybe good news. What about consumers?
Research from ACEMOGLU and another collaborator, PASCUAL RESTREPO, indicates that companies sometimes use machines to load work mainly to customers themselves. Therefore, for example, stalls of self -examination in grocery stores mean that customers, instead of paid workers, examine the groceries. This may help in the bottom line, but sometimes it may also be pain in the rear of customers. Acemoglu and Restrepo Call this “Easy techniques” because they kill jobs without necessarily enhancing productivity or making consumer experience better.
Likewise, restaurants’ dependence on QR and other self -order technologies may be faster and cheaper than the company’s perspective, but sometimes it can be annoying from the consumer perspective, especially if you really want to sit and care. Instead of having a paid employee, you must open your smartphone and may download an application, write your credit card number, the address of bills and e -mail, then submit the application yourself without obtaining the brain of a paid employee on the list. In fast food settings, this may be important. In fact, self -order may be more convenient, especially after downloading in advance of your applications with your payment information. But in the food settings in sitting and watering, the infallible human process can be flawed to order food sometimes annoying and more consuming time for customers.
Syverson says he believes that most of the sitting restaurants have discovered that most customers hate QR codes and other disturbing demand methods adopted during the epidemic.
“I think QR symbols in particular are a nice example of something that may have been created in principle efficiently (and may have done little), but not somehow enough of the clients who have been estimated,” says Sevson. “As a result, my impression that they have been largely declined, especially in full -time restaurants.”
But many other changes that still have fast food and other restaurants that were adopted during the epidemic. Think about requesting a smartphone application, rapid food shelves, and more delivery options and expanded corridors.
Syarson says the highest productivity produced by these new technologies and commercial operations is generally good news for consumers. When companies can make and sell more in less time, the cost of everything they make in general decreases. We have a modern seizure with inflation may hide these benefits. But Severson is that the bulk of the evidence shows that productivity gains are often transferred to consumers through low prices.
For this reason and more, economists love productivity in general. They look at such a magical sauce that is poured on the economy, allowing all of us to get more.
“Productivity growth is very important,” says Sevson. “It is the only way we get continuous increases in our economic well -being, and is associated with good things for business, workers, agents and entire economies.”
There may be a reason for the hope that fast food restaurants will witness another wave of productivity growth in the coming years. Many The experience of using artificial intelligence and Robots To accelerate demand, prepare food and other aspects of their business to enhance productivity. Fast food can become faster.
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