Slashdot Mirror
California's $15-an-Hour Minimum Wage May Spur Automation (computerworld.com)
An anonymous readers links to an article on ComputerWorld: For many California business groups, the state's decision to gradually raise its minimum wage to $15 by 2022 is a terrible thing. But for its technology industry, it may be a plus. Higher wages, says the California Restaurant Association, will force businesses to face "undesirable" options, including cutting staff, raising prices and adopting automation. But a higher minimum wage will "signal to tech companies and entrepreneurs" to look at the restaurant industry, said Darren Tristano, president of Technomic, a research group focused on the restaurant industry. The state's governor and legislators reached an agreement Monday to raise the wages. "I think there are a lot of tech companies that are looking at the restaurant industry to accelerate their growth," said Tristano. The restaurant industry is primed for change, said Tristano, "Many of the routines that take place in restaurants are not very different from 30 to 40 years ago," he said.
No matter what "minimum" is dictated by statists? I'm shocked, shocked!
You say that now, but most of the food you eat at a restaurant is already prepared by machines. And when a machine can serve, it will show up.
I have been saying for years that an increase in the minimum wage can partly pay for itself by spurring automation. And that's a very good thing, for everyone.
Some business owners might prefer to pay a bunch of people $1/hour to dig a ditch using a shovel, but at $15/hour, you gotta use a backhoe.
I always find it funny when rightwingers complain that a minimum wage increase is simultaneously entirely inflationary AND that it will cause you to lose your job to automation.
I've often thought that we are using far too LITTLE automation, not too much. If burger flipping can be automated, why the heck aren't we automating it? Oh, right, because it's cheaper up-front (but not long-term) to just pay someone a poverty wage.
And it's also always funny to see rightwingers pull out the Luddite critique, i.e. that automation will put us out of jobs, when in fact we've had increasing automation for centuries, now, but not any lower voluntary unemployment. So the Luddite critique is ridiculous when OTHER people use it, but totally fine otherwise...
And then, realize that we had a real minimum wage of about $11/hour in the 1960s, when productivity was FAR lower, when we had far less economic productivity per person. If you adjusted the minimum wage for productivity growth, it'd be over $20/hour right now.
I actually think that by NOT raising the minimum wage, we've stymied technological progress. Yes, there's definitely a limit to how fast you can increase the minimum wage without hitting inflation (or possibly some unemployment), but we're not near that limit with $15/hour.
I am always bemused that after call centers being moved to India, manufacturing jobs ending up in China, and even Fords being built in Mexico that people can't fathom that increasing labor costs at home might have an affect on the job market. Like the US labor market is somehow a product of American exceptionalism, free from other cost concerns.
While trying to increase the ranks of the middle class is laudable, it seems to be more ending jobs for entry-level workers.
The difference in yearly income between a burrito engineer and a degreed and licensed professional is about $10k under the new scheme. Why bother with the school debit, the professional associations, and yearly certifications when you could just work fast-food?
Except once that pandora's box of automation is opened, even those professional careers are fair game.
Look at the old US car makers who refused to let the government force them to provide cars that were safer and got better gas mileage.
They fought the regulations, refused to comply, sued and delayed, and eventually got their market taken away by car makers who provided all of those benefits in less expensive vehicles
At which point, the manufacturers tried to blame it all on the unions without considering their own recalcitrant behavior
Yeah, they can all suck it, we see through their bs for the lies that it is
Okay, so why does it remove entry-level jobs for minorities but apparently not for white teenagers? Maybe whatever causes that disparity is where the problem really lies.
"[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz
If the current problem of terrorism shows one thing, then that this is patently false.
If I have nothing and you have everything, I can not only win, I can actually not lose. You, on the other hand, can only lose. Because you have nothing to gain from fighting me. Fighting me accomplishes nothing for you. I have nothing you could want or use. You, on the other hand, do have a lot that I could want or use.
What have we gained in this war on terror so far? Well? Name it. I could not really think of a single thing that we won. But boy, did we lose. Liberty. Safety. Not to mention the waste of money and human lives. We have to fear the next attack.
Are we winning yet?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Because the performance / cost of automated technology is steadily increasing.
This wage change only has the potential to bring very slightly sooner what seems an inevitable trend toward significant job losses to automation.
Minimum wage rise or no, society is going to have to deal with one of:
A) Guaranteed annual income (for existing as a human in the country).
B) Building really tall barbed wire walls (with automated machine guns/frickin' lasers?) to divide the still-employed and automation owners/shareholders from the increasing hordes.
Where are we going and why are we in a handbasket?
Sounds good in theory, but look around any retirement home for a strong counterexample. You'll see a lot more people watching TV than painting, writing books, studying, etc. Yes, they're old, but that's not why they're vegging out. It's because they're people. It's often been said that most people start dying the minute they retire.
Cyber-Vandal, you need to watch a movie called Idiocracy, it's the world we'd end up with if people didn't have any real purpose in life. Maybe a single-digit percentage would do as you suggest; the rest would fritter away their lives doing nothing of value to anyone, getting fat, weak, sickly, dumb in the head, and/or getting into one kind of trouble or another. Humans need something to fight for, and when there's nothing to fight for, we wither away and die.
Are YOU using the TOOL, or is the TOOL using YOU? Think about it!
This argument was addressed and debunked by Adam Smith when he invented economics. The argument that higher wages causes inflation isn't really true, because that cost is spread out over the production of the employee. Inflation is caused by more by companies taking excessive profits since the increased cost multiplies as their production goes down the supply chain.
Suppose the local businesses have a 10% profit margin, and that a large fraction of that is fixed costs (rent, power, loans, taxes, etc). Now, suppose that 10% of their customers just lost their job to automation and no longer patronize them. Now their profit goes to zero, and their employees also get canned. This causes cascading business failures are fewer and fewer people in the town can afford to pay for things like going out to eat and movies and new cars. Now your local businesses get trashed, and the pool of unemployed go up, pushing down the value of labor. This, in turn, causes over a longer term, wage depression as there is now much more competition for jobs, and people are now willing to work at the mill for minimum wage instead of being able to demand a higher salary. Now the millworkers have less disposable income, which feeds into this depressionary cycle.
But someone will take advantage of the depressed wages, you say. Sure, why? Are you going to move your Googleplex to Modesto? Your expensive white collar people are unwilling to move there; there aren't any restaurants and such; it's now a poor people town. If low wages are important, move the plant overseas, otherwise, put the new plant where the people you're moving want to live. But, you say, they can get lower cost white collar employees there. Maybe, but those individuals left to get higher paying jobs, and when the real estate value plummeted, so did school funding and the quality of teachers, as the better ones didn't want to live there.
This is the death spiral that bay area taxes and minimum wages have pushed on the central valley. $15/hr in SFO is a reasonable minimum wage. It's going to kill the last 5 full time jobs in Modesto where $15/hr is well over a living wage and, frankly, more than unskilled labor is worth there.
This is why I support a change to a formal basic income. Looking at the stats and polls, though, I don't think it's likely in the near term.
- you are talking about increasing taxes on people who are still productive in the economy populated by more and more unproductive people. For me, as an employer and a person whose views on economics will not change the direction of a country at all the answer is also extremely obvious: outsourcing, which is what I do. 2/3 of my workforce is outsourced already, higher taxes and regulations will cause more outsourcing.
Isn't it clear that severe pain is on the way no matter what under the current economic model? I can't see a way out of it. At all.
- I do. But I understand the root problem, which is absolutely necessary to understand if you are interested in actual solution, not just kicking the proverbial can down the ever shortening road.
Individual freedom, removal of the central planning collectivism, dismantling 99% of the government, thus reducing taxes, regulation, money and interest rate manipulation, returning to a sound money system that promotes actual savings and productivity.
That is the actual way out of it, the Chinese understood it a few decades back, maybe it's time for the Western world to get it.
You can't handle the truth.
Yes, that is fair. My point was that we heard the exact same arguments.
It actually wasn't too long ago that we raised the minimum wage from $7.45 to $10.25, either. We increased it by about 50% in the seven years prior to 2011 (source) with little noticeable effect on unemployment (no source for that, but it all gets a tad murky due to the 2008 recession at that point).
"Government is like fire; a handy servant, but a dangerous master." -- George Washington
I had the opportunity to sit in the kitchen of a retired mechanical engineer. I recall he worked at Caterpillar for a while but also a couple other places. He had some stories about the unions.
One story I recall was that there was a system to start trains that someone was trying to sell him. Apparently starting a train is a lengthy process, or at least was, with many steps which with the right hardware could be automated to take less time and effort. Well someone did the math on this and they could not buy this system. Turns out that rail engineers tend to be unionized, and part of the contract is that they get paid so much for starting the train being as this is a relatively lengthy and complex process. By automating the process the rail companies would have to pay for the hardware AND still have to pay the engineers as if this device did not exist. Getting the union to agree to have the engineers get a pay cut is unlikely to happen. What this also means is that the trains tend to idle in the yards because it's cheaper to burn the diesel than it is to pay the engineers to turn off and then restart the engines if idled for even relatively lengthy periods.
So, unions are dicks to their employers and the environment.
That was just one of many stories I got to hear about how the unions cause troubles for their employers, increasing costs and inhibiting advancement. I have no doubt that someone else came along with a better product than the union car makers. They are very reluctant to change even if it can make their lives easier.
I blame the unions.
While I agree that this is an undesirable side effect of raising the minimum wage in some (or many?) circumstances, I also at the same time disagree with the idea that wages should be kept low (and in some cases well below the poverty line) simply to provide employment. By your argument, the result of this minimum wage hike is that McDonald's now has more productive workers at the expense of lesser skilled workers being more often unemployed. I see that as a zero-gain, but also zero-loss, proposition.
Now while your point that it removes an important rung on the economic ladder is at least in some (or again, many?) cases true, I tend towards my more capitalistic opinions - that wages should not be kept low simply to provide employment to the unskilled. There should be a wage floor that allows unskilled workers to consume baskets of goods, not merely subsist on them. For the record, I am currently unemployed, have been for a year, and live on a shoestring budget. 90% of my expenses are tax-free, give or take. Things like groceries, diapers, medications, rent, all of it is tax-free in most modern societies. Raise the minimum wage for my wife, and we'll have more money for luxuries, or at least, for taxable consumer goods, returning nearly all of that to the economy rather than a savings account or investment fund, and also returning more of it to government coffers.
Without minimum wage legislation, the market will tend towards indentured servitude (I know, that's a rather poignant term to use). I would rather see poverty level wages eliminated entirely, and a corresponding rise in unemployment, than see subsistence level wages proliferated. If that means I pay more for my Big Macs, I'm all for it. There is a reason I don't shop at WalMart, and don't buy clothing made in Bangladesh. I want the people who manufacture and sell my consumer goods to be capable of supporting a family. It's why I buy my coffee from Starbucks - they pay well (decently, at least, at least in Canada). I for one am happy to see more productive, and hopefully better paid, workers at McDonalds, knowing that the people working there can afford to feed a family. If that means higher unemployment, that is a sacrifice I am willing to make.
I suppose it all boils down to this - I'd rather see fewer better paying jobs than more lesser paying jobs (grammar, ugh...).
"Government is like fire; a handy servant, but a dangerous master." -- George Washington