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Job Automation and the Minimum Wage Debate
An anonymous reader writes "An article at FiveThirtyEight looks at the likelihood of various occupations being replaced by automation. It mentions President Obama's proposed increase to the federal minimum wage, saying big leaps in automation could reshape that debate. '[The wage increase] from $7.25 to $10.10 per hour could make it worthwhile for employers to adopt emerging technologies to do the work of their low-wage workers. But can a robot really do a janitor's job? Can software fully replace a fast-food worker? Economists have long considered these low-skilled, non-routine jobs as less vulnerable to technological replacement, but until now, quantitative estimates of a job's vulnerability have been missing from the debate.' Many minimum-wage jobs are reportedly at high risk, including restaurant workers, cashiers, and telemarketers. A study rated the probability of computerization within 20 years (PDF): 92% for retail salespeople, 97% for cashiers, and 94% for waitstaff. There are other jobs with a high likelihood, but they employ fewer people and generally have a higher pay rate: tax preparers (99%), freight workers (99%), and legal secretaries (98%)."
The higher the minimum wage, the more incentive there will be to automate those minimum-wage jobs. If it'd average out to $11/hr to have a robot do some cleaning, and the minimum wage is $10/hr, then a janitor willing to work for $10/hr will have a job. If the minimum wage goes to $12/hr, the robot will take the job instead.
I read somewhere an essay written around the time the minimum wage was being increased a few decades ago. This was during a time when there were still elevator operators. The author predicted that after the increase, elevator operators would get phased out in favor of automated elevators. That probably would've happened anyway, but raising the minimum wage probably helped speed up that process.
If it gets really bad there will be pressure to illegalize automation of certain classes of jobs.
I used to work in the IT dept. for a company that replaced forklift drivers with highly automated forklifts Vimeo: (http://vimeo.com/75513911) that were able to load trucks. The justification was never the cost of labor, but the increased accuracy in the supply chain, the ability to "house keep" (i.e. moving product bound for shipping close to the dock door it was headed out of, to increase maximum warehouse capacity by reducing average trip times); during the slow hours, as well as reduced damage to product, equipment and the facility. Automation is not about cost, its about having a machine do some work BETTER than workers. Arguing the cost is like arguing that cars are better at moving goods than humans because it costs less per mile to drive a car than it does to pay someone to carry your good. It does cost less, but thats not the point. Automation can scale much faster and increase accuracy, without increasing costs. Thats the point of automation. The benefits were obvious to anyone who had ever seen a mis-ship report or calculated the % of accidents involving a forklift. These units delivered
Many minimum-wage jobs are reportedly at high risk, including restaurant workers, cashiers, and telemarketers. A study rated the probability of computerization within 20 years: 92% for retail salespeople, 97% for cashiers, and 94% for waitstaff...
A few other jobs that were lost to technology:
The knocker-up was a person whose responsibility was to go out to people's houses and wake them up so they could get to work on time. Alarm clocks eliminated the need for them.
Acoustic locators were people who listened to acoustic mirrors to detect incoming aircraft before radar was invented.
And sure, we can talk about buggy whips. The point is, quite a few jobs and entire industries no longer exist as a result of automation. We can start throwing our shoes at the machines like during the industrial revolution, or we can enjoy the benefits they bring us, accept the growing pains, and adapt to the new world. Personally I don't want to have to pay some guy to come knock at my window every morning so I can go to work. I hope I live long enough to talk to the younguns about all the ridiculous jobs that used to exist when I was their age.
Warning: Opinions known to be heavily biased.
With the vehement anti-socialist thread that weaves throughout the American culture, the US will be one of the hardest hit by the coming automation age.
More socialist countries will have a chance of moving to the age of leisure, while America, god bless her, will move to the age of the gutter.
I live in a country where the minimum wage is roughly $15USD. More crucially though, I live in an area with low unemployment so the practical minimum wage is considerably higher.
What we have seen is changes like such as smaller retailers only have a single staff member on during the week. This means that when the staff member goes to the bathroom or gets lunch, the shop closes briefly. For larger retailers there is an ongoing shift towards self-checkouts, but as they are constantly pushing their costs this seems independent of wage levels.
Other fields have seen similar pressure. Restaurants try and make do with less staff, warehouses focus more on minimising idle time and companies may consider how often they really need the bins empty.
All of these are fundamentally positive changes.
So it is about costs.. just the reduction of costs from increased efficiency and production rates caused by the automation
...were on to something. Not that mechanization is evil - it is progress. But what we're seeing now that we have not faced in the past is technology and automation advancing faster than society's capacity to restructure the economy so that everyone has an opportunity for some basic livelihood. Extremes of poverty and desperation are not a good alternative.
"at some point we're going to end up with a civilization like in Star Trek TNG"
First --- I wish, that would be an incredible and ideal future.
But society is based on power and control, both in government and private industry.
Government and private industry simply isn't going to say "Dear commoners, robots will do everything and you don't need to work and you get a free ride" --- will never happen!
And --- even if it did, look at what people with too much time on hands do to this world: crime, gangs, terrorists, cults, drug users --- most of societies ills are AVOIDED by making these people have jobs so they don't have free time.
I'd love to get to a Star Trek TNG future, but the vast majority of the populace isn't going to start creating and researching or coding solutions to the world's problems in their spare time, which is why it won't work. And the power and authority would never support a free ride of "their creations" or their use of their power.
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Historically, some have speculated that with automation comes more and more leisure time, people not having to work because all of their needs have been fulfilled. What ends up happening in reality however (as we see now) is that productivity gains do end up with fewer people working but instead of more people working fewer hours, there are fewer people working more hours. What happens when there are not enough jobs to go around at all?
People won't have enough money to pay for goods. Will labor be parcelled out so more people work less? Will there be a perceived "non-need" for so many unemployed people? What happens then? I can't imagine it will be a pretty sight.
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Well if you ignore the fact that the project didn't save money-spent overall, then yes, its about costs.
What you are forgetting to take into account is that you get significantly more production, at a higher rate of accuracy with machines. In some cases (not all), the accuracy and production increase is simply unfeasible with a human workforce.
Its like asking how many postmen would it take to deliver all the world's email. There simply wouldn't be enough resources to do the job, regardless of cost.
I don't think you understand "cost" - if the increase in production and better accuracy didn't make the program cost effective, then they'd dump the smart forklifts and bring back the humans. Few businesses can afford to turn the core part of their business into a speculative testbed for technology that costs more to operate than the human workers it replaced. The project may very well have cost more than the human workers it replaced, but that expense was made up by the factors you just mentioned.
This doesn't take into account the one thing that most futurists never take into account. Maybe I'm not the only one who wouldn't enjoy going to a restaurant and not being served. Maybe I'd see that as a low-quality dive, and wouldn't be interested in a steak from a conveyor belt. Maybe the reason that I often go out to restaurants is specifically to be served by someone else. Maybe that's half the value.
What about the impending failure of capitalism?
You're confused. Capitalism is doing fine. It's government that's failing.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Would an abundance of goods with no requirement for people to work their butts off making them would be considered a problem. What is wrong with just letting people enjoy fruit of the modern civilization without considering our collective wealth a downside? Plenty of people will still find a way to work in order to afford more exclusive stuff line posh houses, luxury vacations or whatever. Lots more would find something productive to do just out of boredom. For everyone else, we should just encourage responsible birth control in the sense that if you can not even find your own place in society you are not in the position to teach your children to do the same.
That's sorta the argument you'll hear. I saw an interview on Fox News years ago where they brought on an economist who explained he would combat automation by taxing the rich and redistributing the wealth. The host said, "But that's socialism" and he replied "that's right, I'm a socialist". The whole rest of the interview was the Host just trying to come to grips with the fact that the man just admitted he was a socialist. I think if he said he skinned babies for a living he'd have gotten less of a reaction.
After 70 years of being told that Communism == Socialism == Hitler == bad it's just ingrained in American Society. It's really the only answer to automation. There just aren't enough jobs. The world _doesn't_ need ditch diggers, and we only need so many scientists even if everyone was the next Albert Eisenstein. But the notion that a job, any job, is better than no job is heavily ingrained in America.
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"Capitalism" does not mean "free from government interference". In fact, it thrives (and maybe depends on) on certain kinds of heavy government interference: IP laws, a solid banking system, corporate charters, and limited liability spring to mind.
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I believe the standard retort here is that despite many countries trying to implement communism over a 70 year period, all ended up with something with the general theme of authoritarian rule. It is reasonable to conclude that perhaps it is impossible to implement "communism" as Karl Marx envisioned - that it is a nice idea that cannot be realized with current levels of technology.
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Betcha if there is a pretty little girl in a short skirt at the checkout, next to a self serve, then you would happily stand in the 50 person line-up...
Excuse me, but please get off my Pennisetum Clandestinum, eh!
The fact is that most of the luddites were right-- they mostly died horrible homeless deaths of starvation. The fact is, they asked for training on the new machines and were refused (much as employers are today refusing to train employees). They were not just blindly rejecting new machines. The fact is they could see they were going to suffer terribly if the industrialists were allowed to go to the new technology with no social safety net for the luddites.
I think there are too many people for it to be as quiet this time.
And it is coming- it is unstoppable. It *could* be a utopia but it probably won't.
Space is too expensive to be a realistic proposition for more than a fraction of a percent of humans (a fraction of a fraction of a fraction). It's more about species survival than an SF wonderland of colonies with heavy meatsacks lifted out of the gravity well.
The automation coming on line *right now* is cheaper than human poverty level wages and can duplicate much of their labor. If so- with the exchange of labor for wages broken- you are looking at a fundamental challenge to the capitalist model.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Right, in a holistic sense, everything a company does is about maximising money in, and minimising money out.
However, the point the OP is making is that this isn't a simple case of how much a computer/robot costs per hour or per unit vs the human cost of doing the same thing. Such that a change in the minimum wage would in some elastic way change the number of jobs that are automated.
His point is that automation is typically a fundamental change in the way of doing business, and will be driven by considerations far bigger than cost per hour or per unit.
In fact it may be that a business would automate even if staff would work for free. That may be the only way to compete. He gives the example of the inability of postal workers to compete with email for example, regardless of pay rates.