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Worker pay vs automation tipping point may be coming, says this fast-food CEO

Need a 'tiered minimum wage': CEO
Need a 'tiered minimum wage': CEO

The soaring costs of paying workers — both self-imposed by many companies and government-mandated via minimum wage increases —make the calculus of replacing jobs with automation more attractive, said Andrew Puzder, chief executive of CKE Restaurants.

"As you make labor more expensive, you make automation a more viable alternative," Puzder told CNBC's "Squawk Box" on Friday. CKE is the company behind the Carl's Jr. and Hardee's fast-food brands.

Five or 10 years ago, ordering automated kiosks for 6,000 locations in the U.S. was too expensive compared to labor costs, he said. "[But] they're not too expensive now."

Replacing jobs with machines is "not something you like to do," but research shows many millennials want to order with technology instead of dealing with cashiers, he added. "They don't like the personal contact. They're not going to malls or restaurants anymore."

A Walmart department manager helps stock shelves with school supplies in San Diego.
Our wage hikes give workers more money to spend in our stores: Wal-Mart US CEO

Wal-Mart in February implemented the second phase of hourly wage increases for its employees to at least $10 per hour. Last year, worker pay at the retail giant was bumped up to $9 per hour.

While many states such as California and New York are increasing wage floors, the federal minimum wage has stagnated at $7.25 per hour since 2009.

"You could go to $9 [per hour] with minimal impact," Puzder said. "In our restaurants, we're already there. Our average wage for the crew level is about $11 [per hour]."

But a "real alternative" to raising the minimum wage that won't hurt business and can save jobs, according to Puzder, would be to expand the earned income tax credit, a benefit for working Americans with low to moderate income to reduce their tax burdens or provide refunds.

The earned income tax credit approach has bipartisan support in Washington, Puzder said. "Warren Buffett supports it. I support it."