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Higher Minimum Wages Bring Automation and Job Losses, Study Suggests (axios.com)
An anonymous reader shares a report via email: As of the start of the year, 19 U.S. states had raised minimum wages, dramatizing a long simmering debate: Do minimum wages kill jobs, and make the working class worse off in the end? Or do they simply make them a little richer, with little or no loss to overall employment? In a new paper, economists Grace Lordan of the London School of Economics and David Neumark of UC Irvine parse 35 years of census data and come down on the worse-off side: For lower-skill jobs like bookkeepers and assembly-line workers, they say, higher minimum wages encourage employers to automate -- according to their calculations, a $1 increase can cost tens of thousands of jobs nationally.
We know how many jobs will be lost. Do we know how many workers will benefit from a $1 per hour increase? I think that number will be larger than the number of jobs lost.
Why is this concept so controversial ?
Why do those advocating the $15 hamburger wage not see this ?
5 out of 6 people enjoy Russian Roulette & 6 out of 7 Dwarfs are not Happy
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They had to look through 35 years of data to come up with that conclusion?
I'm a job creator.
Water is wet
The laws of supply and demand have been well-understood for generations. Both ends of the political spectrum regularly enact legislation based on them (sin taxes, etc.). For some reason certain people feel that this one area "needs" to be exempt from what is basically a law of nature, because it's politically inconvenient to them. Ironically, it's the folks that tend to go around insisting that they are a "reality-based community." The pseudointellectual contortions required to do this are pretty funny to watch, even though they're wrecking the portion of the economy most important to the most financially vulnerable. Maybe the whole "Fight for $15" thing is just a world-class troll by the 0.1%.
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Anything that encourages labor automation is a net benefit to the world. That tech is the only thing that has the potential to fundamentally alter how the economy works.
And a fundamental alteration is exactly what we need, because the status quo is "a tiny group of wealthy at the top, sitting on top of a smallish group of workers living comfortable lives, sitting on top of an enormous mountain (80% of the human population) of people who suffer in abject poverty for their entire lives."
No amount of law, religion, or charity has made this balance budge, and never will. Labor automation is a game-changer. Sure, there is risk that it might make things worse....but it is a risk well worth taking given how shitty things already are.
Lowering or eliminating income tax for those who make less than 25K would provide more than $1 an hour. Of course people would shout about losing income for the government. I think that the government needs to shrink anyways.
they are already automating away jobs with or without wage increases.
Raise the damn wages!!
In a free market, demand is always a function of price: the higher the price, the lower the demand. What may surprise most politicians is that these rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the one set to take effect later this month, are always seen as an act of governmental benevolence. Nothing could be further from the truth.
When confronted with a clogged drain, most of us will call several plumbers and hire the one who quotes us the lowest price. If all the quotes are too high, most of us will grab some Drano and a wrench, and have at it. Labor markets work the same way. Before bringing on another worker, an employer must be convinced that the added productivity will exceed the added cost (this includes not just wages, but all payroll taxes and other benefits.) So if an unskilled worker is capable of delivering only $6 per hour of increased productivity, such an individual is legally unemployable with a minimum wage of $7.25 per hour.
Low-skilled workers must compete for employers’ dollars with both skilled workers and capital. For example, if a skilled worker can do a job for $14 per hour that two unskilled workers can do for $6.50 per hour each, then it makes economic sense for the employer to go with the unskilled labor. Increase the minimum wage to $7.25 per hour and the unskilled workers are priced out of their jobs. This dynamic is precisely why labor unions are such big supporters of minimum wage laws. Even though none of their members earn the minimum wage, the law helps protect their members from having to compete with lower-skilled workers.
Employers also have the choice of whether to employ people or machines. For example, an employer can hire a receptionist or invest in an automated answering system. The next time you are screaming obscenities into the phone as you try to have a conversation with a computer, you know what to blame for your frustration.
There are numerous other examples of employers substituting capital for labor simply because the minimum wage has made low-skilled workers uncompetitive. For example, handcarts have replaced skycaps at airports. The main reason fast-food restaurants use paper plates and plastic utensils is to avoid having to hire dishwashers.
As a result, many low-skilled jobs that used to be the first rung on the employment ladder have been priced out of the market. Can you remember the last time an usher showed you to your seat in a dark movie theater? When was the last time someone other than the cashier not only bagged your groceries, but also loaded them into your car? By the way, it won’t be long before the cashiers themselves are priced out of the market, replaced by automated scanners, leaving you to bag your purchases with no help whatsoever.
The disappearance of these jobs has broader economic and societal consequences. First jobs are a means to improve skills so that low skilled workers can offer greater productivity to current or future employers. As their skills grow, so does their ability to earn higher wages. However, remove the bottom rung from the employment ladder and many never have a chance to climb it.
So the next time you are pumping your own gas in the rain, do not just think about the teenager who could have been pumping it for you, think about the auto mechanic he could have become – had the minimum wage not denied him a job. Many auto mechanics used to learn their trade while working as pump jockeys. Between fill-ups, checking tire pressure, and washing windows, they would spend a lot of time helping – and learning from – the mechanics.
Because the minimum wage prevents so many young people (including a disproportionate number of minorities) from getting entry-level jobs, they never develop the skills necessary to command higher paying jobs. As a result, many turn to crime,
On the surface, leftists say they support minimum wage increases because it supposedly makes low-end workers better off financially. The majority of leftists actually believe this to be true.
The leftist leadership, however, are not as short-sighted. They know that there are long-term consequences to economic distortions like minimum wages. They know that such distortions will cause other economic distortions, such as unemployment and an increase in automation.
That's exactly what the leftist leadership wants and needs! They need a large angry mob of economically-disadvantaged people to control. They want people who see themselves as victims. That's where the real power in leftism likes: pulling the puppet strings of large, economically crushed populaces.
Leftism can't succeed when the economy is strong. When there's a robust economy then individuals are empowered, self-sufficient, and can't legitimately pretend to be victims. That's exactly why leftists push so hard to distort and destroy economies. A strong economy with many independent and successful players is a toxic environment to leftism.
As long as there is something resembling a real economy present, we'll continually see leftists try to destroy it. As long as an economy is present, leftists don't have real power. Leftist ideology can't survive in times of stability, peace and prosperity.
Great, just great. Someone just got killed nazis over the weekend, and now we have the fascists coming out trying to scare us away from asking for a living wage so we can survive because it supposedly causes "job losses" and "automation". This is exactly what these nazis want us to think. We need to start removing these people from our societies permanently.
A "Study Suggested"? Just like it did for P being not equal to P? Or how energy drinks may be the trigger for substance use? Or that by "finally unlocking the recipe for magic mushrooms", the scientists may have laid the groundwork?
Gimme a break slashdot, provide some real news, please.
Right now, the taxpayer is subsidizing these low paying jobs with welfare. If raising the minimum wage encourages companies to automate, society will be better off because it makes the inefficient jobs obsolete.
The London School of Economics is just a mouthpiece for the blithering, tory, racist alt-right that want to see women and minorities kept poor and dependent. Their "study" omits inconvenient data to arrived at the desired conclusion.
I'm honestly a little shocked that the University of California system would even allow one of their professors to spend time with them on anything.
Either pay people a livable wage, or they will take it via legislation or angry mob.
We know how many jobs will be lost. Do we know how many workers will benefit from a $1 per hour increase? I think that number will be larger than the number of jobs lost.
Be careful of that calculation.
The justification behind Chinese off-shoring was that the benefits of reduced prices outweigh the domestic loss of wages. For example, the damage from losing one worker at $50K is more than compensated if 10 million people spend $1 less on some product. That frees up $10 million to be spent on other things, and the economy gets stronger.
The problem is that the benefits are not linear. You can easily see that by going to the limits of the policy - when all manufacturing is done in China and all workers are out of a job, for instance.
If you assume a fixed or shrinking pool of available jobs, then you quickly come to the point where there are more job-seekers than there are jobs. In this case the economic benefits can still be argued, but the cost of doing so is the loss of the $50K job and the extra burden of having an unemployed person in the labor pool.
It's not a linear function, and you can't rely on past economic studies that were done based on a previous historical situation.
So... be careful with that calculation.
No jobs no profits. . when does it end? keep the poor, poor! or automate and sell to only people with jobs that can afford the products. well double duh! on both of you
They will make the value out of thin air, and it stimulates manufacturing as people make mining equipment.
captcha: overflow
Because management never considered automation before talk about hiking the minimum wage started.....
Automation is going to happen regardless.
I'm old enough to remember living on minimum wage. and living through two hikes in the 90s
the first hike we lost health insurance, the second hike we lost other benefits
At the same time prices did go up, so it didn't help those on minimum wage, they stayed about even. The "rich" were not adversely affected by the increase, but the middle class were hurt because of the increased prices on almost everything, they didn't get an automagic raise.
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Thanks to the RIAA, I buy them used...
They aren't supposed to be providing a living wage. They are entry-level jobs. They are *supposed* to be filled by college students and people just getting started in the work force.
Once you increase the cost of those jobs, the value proposition changes, and they aren't "entry level" anymore. Most employers won't think twice about hiring someone at $4 to clean up a restaurant. If you have to pay them $15/hour, then they are going to need more value out of them. They are probably going to have the waiters and line cooks start cleaning up during their shift, and eliminate the position of cleaning person. Or they are going to hire a company to come in and clean up at night for $20 instead of paying someone $15 an hour all day.
Know who is going to get hurt the worst? Lousy employees making minimum wage. When it takes ten minutes for someone at McDonald's to get me an iced tea, that person isn't going to have a job at $15/hour. It might be worth it to hire them at $8/hour, but nobody is going to hire someone who performs at that level for $15/hour.
We are about to increased our minimum wage from $11.40 to $15. Restaurants are openly declaring significant layoffs. McDonald's is using Kiosks, and supermarkets in Toronto has started using a lot of self-serve checkout booths. in Ontario, we may also have universal minimal income doing as well (being discussed). It's going to be an interesting shift.
:D)
Apparently the magic number is around $30-40k/year salary when managers start considering replacing those employees with robots and/or AI. People in this salary area are most likely to be replaced by automation, or possibly an AI. We'll see how this pans out, but I'm a little worried the AI (not quite working in self-driving cars yet.
Amazon is certainly driving the robotic force forward. I saw a sign near Chicago announcing they are hiring for the new Amazon warehouse there, but that is probably just to get started with transition team, and after the robot force is in full force. I'm guessing 12-18 months before a portion of the new hires are out of work due to increased automation.( A guess, but hey why now).
"Imagination is more important than knowledge" - Einstein
Simple economic principle. If two entities are doing the same exact thing with the same quality, use the one which costs you less. Automation is going cheaper and more accurate everyday, while the states like mine, i.e. California, think that flipping burgers at MickeyD's should be treated as careers and raise the pay rates for jobs, which were supposed to be summer jobs for kids on vacation. If you are 30 and working at a burger joint for minimum wage, regardless how good that minimum wage rate is, you need to re-evaluate your life and see how you can improve yourself, instead of relying on others to foot the bill for your poor choices. Sorry for you, but it is the truth.
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The real reason the Left loves higher minimum wage is because it results in higher tax revenue for the government. Since it is very hard to make corporations pay income tax, it is far better and easier for big spending Democrats to collect taxes on wages earned - especially the 15.3% that gets taken off the top for Social Security and Medicare - their two big power-keeping pyramid schemes. That's really what they're after - keeping retirees dependent, and keeping the young captivated by the fear of starving to death when they can no longer work.
"Higher ... Wages [or higher labor costs] Bring Automation and Job Losses"
There, fixed that for you.
If the higher labor costs are brought on by a tight labor market, laws and regulations, or other factors (think boycotts), it makes automation more attractive.
Where I live, $15/hour is still too low to live hear. (A one bedroom shit apartment is over a $1,100 a month) What folks do is commute an hour or more one way from the poor areas. So, two hours a day is just traveling to and from the job. Plus work the 8+ hours and try to do the things that one has to do to live.
That's a shitty life. But they do it because there's just Walmart as an employer and some small businesses that have no job openings.
Yeah yeah yeah, they made "poor life choices" - they should have went to medical school.
See, the trouble with our society is that a person's worth is based upon their economic value. Can't make a living with the intelligence you are stuck with? Well, you're stuck as a poor slob eeking out enough to eat - just a like a Third World country,
Surprise surprise, if people would work for no pay and not need to eat, there would be very little automation. I think asking if raising the wages brings more automation might be one of the most legitimate targets for the phrase "begging the question" I've seen in years.
Also, not surprising it's complete bunk, because as the costs for automation is going down, there eventually will be no wage low enough for humans to compete with the machine which can pay it self off over a very long time if it's reasonably well built, and practically works for peanuts.
Thus, the question isn't "will higher wages bring more automation", but "for how long are humans even considered a viable alternative to automation".
This keeps coming up, time and time again. It's always an active point of discussion. And I don't mean to sit on the fence. I can see various points of view.
A) We have the workers who need the money
B) We have the small business owners who struggle to pay said wages.
For some reason, this always comes down to, business owners understanding that workers need more wages, but ultimately it hurts their bottom line. It results in businesses restructuring their businesses to adjust, ie, different operating hours, changing employee roles to have less staff on, or perhaps not hiring young, unskilled workers (kids' first jobs etc) to get more productivity.
But it almost seems like the whole notion is a really convenient way to brush a much larger problem under the rug.
Why do workers need more money? Why are business owners bearing the brunt of it?
I'm not saying there is an easy answer, but.. the fact is, those businesses most affected in my mind (service industry) depend on people having excess enough income to use said services. (I'm looking at you restaurant industry, for example)
But since everything inflates, and the wages don't seem to keep up, that's a compounding problem. Maybe some politicians, or us as a society as a whole should put our thinking caps on, and stop kicking this dead horse.
I think there is at least some truth to this study. It does make sense that businesses will automate whatever they can and raising the minimum wage may hasten that. But the thing not talked about is that as time goes on these technologies will come down in price and be cheaper than the current minimum wage and businesses will automate then anyway. So yes, it may hasten it a little bit, it certainly isn't the reason businesses are automating. So the choice is basically to keep the minimum wage where it is and have these jobs for an extra couple years while people still make less than they need to live or to raise the minimum wage and hasten the loss of these jobs but get everyone else closer to a wage they can survive on. If we wait, businesses will still save money with automation and will save money by continuing to pay wages people can't live on.
What needs to be addressed is how to help everyone who is pushed out of their job via automation. There needs to be some type of job training or something to help people adjust to the new economy, but that isn't happening. No matter what we do, people are going to lose their job to automation, it is just a matter of when. I think we should at least make sure that the people who don't lose their job to automation make enough money to live on.
"Information wants to be expensive" - Stewart Brand, the same guy who said "Information wants to be free"
All it takes is a touch screen monitor and a checklist or meal items. There's no wage low enough to make a person taking an order cheaper than a computer kiosk.
We should decide what minimum wage should be in today's dollars, then peg it to "inflation" so it doesn't "decrease automatically" like it does now.
Whether we use "consumer inflation" (set aside the argument that it's not "accurate" for most consumers) or some measure of inflation more targeted towards low-wage workers (i.e. heavily weighted for things poor people tend to buy) is another factor society must decide on.
If we do this, there will still be calls to adjust it every generation or two, but at least it will only be every generation or two, not every 5-10 years when inflation reduces the buying power of what-was-reasonable-years-ago to arguably-too-low-to-be-useful-today.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
Automation is going to supplant a lot of jobs. The only questions are: "Which ones?" and "How fast?"
Higher wages will accelerate the process, but we need to decide what happens as automation takes over regardless of changes to the minimum wage.
The whole article is a bit of a red herring. Whatever we decide for workers displaced by automation, we ought to do with these people. I'm not going to pretend I have a 100% fair solution, and no one seems to agree. So let's focus on the fundamental problem instead of fussing over a bunch of poorly-paid jobs that no one wants, including most of the people who have them.
Because on the whole, I think everyone is perfectly happy to let machines do more work. So we need to figure out how to make it work without FUD about losing jobs.
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According to the latest ruleset, this post should be modded as Vorpal Flamebait +5.
More automation and higher wages. With the extra savings retrain the displaced workers.
That will bring a cornucopia of wealth and prosperity as companies will lower prices and everyone will have more by earning less money. That's what the Republicans and Libertarians tell us!
I think the automation of crap jobs is the first real sign that a post scarcity society is possible. Unfortunately it's looking certain we'll navigate the changes to labor about as horribly as the historical Luddites and their opponents did. At least we have free porn now.
Hittin' all the hot buttons today, are we?
Why has this not been voted up? This is the best comment I've seen on Slashdot in many moons. The leftists, of course, will disagree because, well, they're leftists and are built to think entitlement.
America was literally at her best in the late 1940s through about 1963. After this, we started to flounder. The baby boomers took over from the greatest generation and everything since has pretty much gone pear shaped.
After the great war, every man and women who wanted a job could get one and a man could raise his family on his income alone, leaving his wife to raise the kids or pursue her own interests. Now? It takes both husband and wife working to make it most places. We in America have largely lost the notion of pulling ourselves up by our own bootstraps. I grew up under parents who were from the greatest generation. I paid for my own college, I paid for my own car, I paid for my own apartment, etc. I've never wanted to be reliant on others if I could at all avoid it.
the solution of course is not to create a city like in batman, but to really become the batman. not a clone, not a mere shadow or attempt. you must become the batman. when you do this, you will see why living in a cave or bunker is better than living with the rest of the population up where the evil day star attacks people every day without mercy.
If the only job someone can get doesn't make them enough to pay rent, utilities, and buy them sufficient food to eat, then there's a problem. Saying "Well, those people should go find a better job", or "Well, those people should go back to school and get a better education so they can get a better job", and similar comments, just are not helpful at all. Saying "Well, that's why we need Universal Basic Income" is even less helpful, because it just plain won't work on the scale of a country with 300,000,000 people in it, and even if it's only 10% (i.e. 30,000,000 people) who need a big handout from the government in order to actually sustain their lives, the other 90% are going to scream about it being unfair -- and I don't totally blame them. I think the real problem is capitalism; it can work if managed properly, but in it's current state capitalism is totally out of control, and it's creating an ever-widening gap between the poor and rich, destroying the middle class in the process. Whether it's out of control by chance or by design is a matter that should be investigated, but just like the problem of homelessness, this isn't going to go away just by ignoring it. You can't just throw people away, not and continue to call yourself a human being. We're supposed to be better than that.
Citizens salaries for everyone in the world when he becomes president. None will have to work and no one will be poor anymore!
Why do those advocating the $15 hamburger wage not see this ?
Because you're making a detached economic argument in favor of business interests, and they're making a "I need enough food to survive" argument in favor of community interests and human rights.
In most areas of the country, especially near big cities, the cost of living is approximately $15 if not much higher (I've seen estimates of more like $20-25 in New York City, for example). This is the cost of basic rent, basic utilities like electric and water, food, transportation to a job (whether by owning a small used car or taking the bus - what you think buses are free?), and replacement clothing (nothing fancy, just new pair of jeans every once in a while as old one rips). Basically, inflation is increase in cost of goods and services, and if you took the minimum wage of the '60s and '70s and adjusted it for inflation, it really should be something like $15 per hour now. With the productivity gains of the average American worker due to increased education and technology, it should probably be even higher, but almost all of the profit gains have gone to top executives rather than increased the salaries of those that actually do the work.
So what does this mean? It means any job paying less than approximately $15 per hour is NOT LIVABLE. You will starve, or end up homeless, or some sort of big problem. It's not sustainable. What I don't understand is why people make the argument of the don't "deserve" $15. Who says? Who decided some arbitrary number is the cap? The REAL issue is: does every person deserve enough to meet basic needs in modern society? I think the answer is unequivocally YES. Every American deserves the dignity of basic needs met, especially when they're willing to work full time to do so. No matter what the work is, if it takes up a full week of work, then they deserve to have basic bills covered, end of story. Full time work is opportunity cost -- if you're working full time, it means you don't have free time to take other jobs, attend school or training, etc. IT HAS TO BE WORTHWHILE. It has to be enough to survive.
Having "more jobs" that pay starvation wages is not really an improvement. It makes job numbers reports and corporate profits look better, but those aren't the only metrics of the success of a society. In fact, I think they're bad metrics; a much better one is: do we ensure every American that works hard can take care of themselves, and has opportunity to improve their lives? By that metric we are failing disastrously.
In my view, businesses that cannot budget for and pay living wages are FAILING BUSINESSES. A business that requires its workers to starve for its owner to make a profit is a FAILING BUSINESS and deserves no sympathy or respect. They should have to drastically change their business strategy or go out of business and be replaced in the free market by business owners that DO pay a living wage.
As far as automation goes, do you think they'll ever decide "Nah, I don't need more profit!"?. At best, low wages slightly delay automation, but make no mistake: it's coming. It's the story of the industrial revolution and the Gilded Age, big business grew larger and larger until it controlled the economy and could automate or improve efficiency, and laid off many many workers once they were unneeded. The poverty and starvation was great, which is what lead to so many of our labor reforms and formation of unions. We have to start putting human interests first over corporate interests. Don't fall for their propaganda. Every American that works hard deserves to live without fear of where the next meal will come from or how to pay rent this month.
And really, we should be taking advantage of automation to work LESS. Lower the amount of hours for full time work. Give everyone more time to raise their families, get involved in the community and local politics, take classes and improve education, volunteer, etc. There's more to life than wage labor. We can make that happen if we stop obsessing with letting big business take more, more, more for themselves.
Something seems a bit dubious about this research, almost like it is calculated to counter efforts at raising the minimum wage to a livable standard. And sure enough, there are some ties to a fiscally conservative think tank called, The Employment Policies Institute. The Employment Policies Institute is very pro-employer and pro-Privatized Health Insurance. This research study is simply meant to lobby elected officials to not raise the minimum wage. There is no credible, peer-reviewed research to suggest that raising the minimum wage accelerates automation. If raising the minimum wage had accelerated automation, we would have had FAR fewer jobs by now.
In general, the people that do lose their jobs on account of automation will eventually find alternative employment, and at an overall higher pay than what they were making before... so it's fairly clear that despite the immediate job losses, there are longer term net benefits to society that can be easily overlooked if you only focus on the here and now, as long as the minimum wage increases are kept within tolerances for the rate at which the cost of living has increased (which is historically is not typically a problem because minimum wage hikes usually lag several years behind the continual cost of living increases anyways).
File under 'M' for 'Manic ranting'
Low wages slow technological growth and reduce leisure time.
It's essentially stating the same thing, but without the worship of jobs, which are a means to an end.
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There are literally thousands of help wanted signs in Seattle at restaurants right now.
There didn't used to be hardly any.
And we have a $15/hour minimum wage.
-- Tigger warning: This post may contain tiggers! --
Are you sure it isn't libs and dems saying this?
According to the bureau of labor statistics,
Together, these 2.2 million workers with wages at or below the federal minimum made up 2.7 percent of all hourly paid workers.
So, around 1% would lose their jobs and the rest will have have a 15% rise in pay. Spending that should create some jobs, obv.
in practice (other than cheap widgets and lawn-chairs).
And food. And houses. And cars. And clothing. Making stuff less expensive is a big deal.
I know it's popular to crap on McDonald's, but it's amazing that you can walk into a restaurant that is fairly ubiquitous and, for a dollar or two, you can get a decent amount of protein and calories in the form of a hamburger, prepared for you. For another dollar-fifty, you can get a salad. In the history of the world, this is unprecedented. For most of human history famine has been a huge problem. It still is in some parts of the world, but that is a distribution problem, not a supply problem.
Automation causes job losses.
If automation was already on the cusp of automating jobs at minimum wage, then those jobs would have been automated soon, anyways.
From TFS:
For lower-skill jobs like bookkeepers and assembly-line workers,
OK, so you cherry-pick medium-skill jobs that typically pay above-minimum-wages and have already lost tons of ground to automation (in the case of factory workers, the job losses stretch back 40 years) as an admonition against raising the minimum wage?
Lesson learned, that's a fine way to run a flawed study.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
I don't know about you but when a job can be automated then I think it should be automated because it saves a human from doing an unfulfilling job. This may put a bunch of people out of work but is a separate issue that should be addressed on it's own. Not having to work is an ideal, not a curse.
Anons need not reply. Questions end with a question mark.
I'll play devil's advocate here. What right do you have to take money from somebody and give it to somebody else? That's essentially what you're doing. If somebody who has money wants to give it away shouldn't that be up to them?
I actually support UBI, but those are the kinds of things you'll have to have an answer for. And "But it's only fair" doesn't really fly. An appeal to fairness falls on deaf ears since taking money from me and giving it to somebody who doesn't work never 'feels' fair.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Norway has no minimum wage, and has higher incomes and less inequality than America. Other countries with no minimum wage: Denmark, Sweden, Switzerland.
Go UBI. The possible downsides of minimum wage are obvious - and although it might work in some instances, in our current situation it will only accelerate automation. It's also not tenable to just allow wages to erode without recourse - the bargaining power of the working class is rapidly approaching zero, and it will end up requiring three jobs to make ends meet for unskilled workers.
UBI puts all the incentives in the right place, it's fair, and it's humane. It allows a true market price to be established for labor, with laborers that aren't desperate and powerless. It's easily affordable too with pretty minor restructuring of the tax code, especially since it would streamline so much bureaucracy and allow us to get rid of welfare, etc, which puts all the incentives in the wrong direction.
Oh, and before you ask, no, I wouldn't personally benefit from UBI because of my tax bracket, and yes, I WOULD vote for it even though my taxes would likely go up somewhat. This isn't freeloading - it's humane and economically beneficial social policy.
I'd rather have my fellow Americans able to live on a single job even if it means smaller profits for billion dollar corporations.
Where I work as a maintenance machinist supporting high volume thermoplastic molding machines ,they had to raise the wages by a dollar to get enough line workers who are steady and reliable. That said they have contracted to automate 6 out of 15 lines and are looking to eliminate a good percentage of warehouse workers as well thought additional automation.
All told we will be able to operate with about 80 less workers on the payroll. And this was suddenly justifiable over one dollar and hour increase!
Basic supply and demand dictates this relationship. However, that is not enough to declare higher wages a BAD thing. A balance needs to be made between wages and employment. Factors such as the net impact on social services costs and living conditions need to be taken into consideration.
Long story short both sides over simplify the situation to a horrific extent. Evidence such as the report that indicated ", a $1 increase can cost tens of thousands of jobs nationally." Seems to support the liberal perspective as tens of thousands of jobs is small compared to the millions of hours worked at minimum wage.
Those that will automatize are not driven by minimum wages, they will do it anyways. And for the others, unless minimum wage is raised significantly, it will not make them go to automation. I think this is a pretext.
That said, a _lot_ of jobs will be lost to automation in the next decades. It will not be possible to keep society functioning, unless alternate means of getting money to people are used. The problem is that while automation is dumb, it can be dumb very fast and with a lot of predefined knowledge and unfortunately, many human jobs do not actually require intelligence for most of what they do.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Since we are all told daily there is a patriarchy keeping women down by only paying them 77 on the dollar, the obvious solution is to hire only women for minimum wage at $11.55/hr, bc a man would naturally earn the full 15/hr. That 23% savings will go an awfully long way!!
Oh wait, that oft repeated statistic has been debunked time and time again as an utter bullshit fallacy of the left. There are already laws in place that would prevent that. Darn, guess the patriarchy will have to find another marginalized group to exploit.
It's still legal to pay illegal aliens under the table for meager work right? I mean, who opposes short shrifting them and not paying payroll taxes for them...
Oh, wait, that's illegal too? Darn!
Guess we'll just have to use machines bc there is no way i'm paying someone $15/hr flip burgers or get my order wrong. /sarcasm
...automation and job loss. Lack of a minimum wage for farming did not stop those plucky "automators" from reducing farm jobs by about 97% in a century flat. Nor were Luddite concerns related to 19th-century English minimum wage policies.
The automatiion/wage situation was really nailed to the wall by this fine journalism in The Atlantic five years back:
https://www.theatlantic.com/ma...
We are taken to hang-ten on the dividing line between automation and human-work in the case of Maddie Parlier, auto-parts worker who was next up for replacement. The nearly-empty auto-parts factory in which she works automates a job when the machine to do it falls in price below two years' salary. She makes $13/hour, or about $25K/year - and the machine that could replace her exists, but costs $100,000 so her job is "safe" - for a few years.
So this is really about your societal standards. "We don't work for less than $13 an hour" is no different conceptually from "We don't work full time before age 16" and "We don't let employers work people more than 16 hours at a time" and "We don't let our employers work people with no safety equipment" even though safety equipment costs money and therefore, mandating it costs jobs.
These societal rules of COURSE have prices: "forbidding child labour" caused 100% job loss for the affected kids, and serious financial hardship for their families, I'm sure there was a lot of smirking at the time about how much harm had been done by Good Intentions.
If you hate the minimum wage, consider reading "Utopia for Realists" by Rutger Bregman. One of the cases for Universal Basic Income is that the moral argument about minimum wage vanishes: with the minimum already taken care of, $1/hour for a job you enjoy might make perfect sense.
that if minimum wage had kept pace with productivity it'd be $23/hr.
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OK, then let's be like Germany, where higher education is FREE.
Higher Education is "Free" from financial responsibility _IF_ you meed a stringent set of criteria. Primarily a high GPA for the duration of your education, but other factors can be included. You can still go to higher education _AT_COST_ if you don't have the requirements, but "FREE" certainly is a dishonest presentation.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
As your link points out, though, they also have unions, which that author believes is responsible for those higher incomes. When the U.S. enacted a federal minimum wage in 1938, union membership was over 28% of the workforce. Now that it's below 11%, I'm not sure you can point to those countries as reasons the U.S. shouldn't have a minimum wage.
Sure, we could try to undo decades of right-wing assaults on organizing and collective bargaining, hoping that we eventually might reach a point where there was sufficient union membership to make a minimum wage unnecessary.... You know, waiting for bad judges to die, changing a ton of anti-union legislation both at the state and federal level as if conservatives wouldn't fight each and every modification tooth-and-nail, or we could just pass a simple single increase in the minimum wage and index it to inflation, right now. I think the choice is obvious, particularly given the low likelihood of success in boosting union membership.
I first experienced minimum wage in 1982. It was $3.35 / hour. That is equivalent to $9 / hour today after adjusting for inflation. But that is the wrong way to measure pay expectations. In any healthy economy, personal income grows faster than inflation. Adjusted to match median personal income growth, that $3.35 should be considerably more than $9 / hour today.
Looking at the numbers, it turns out that the 1980-81 time frame is a key turning point in the distribution of income gains in the US. From 1967 to 1980, the bottom 20% had a 20% real gain while the top 5% gained about 10%. From 1967 to the present, the bottom 20% gained about 25% while the top 5% gained 100%.
So there has been virtually no growth in the economic success of the bottom 20% of the country since 1980 where the top 5% has nearly doubled their wealth after adjusting for inflation.
So, what changed? The remarkable growth in the income of the neediest in the country in the short 13 years prior to 1980 has been widely contributed to minimum wage laws and affirmative action. Hmmmm.
What I don't get is why someone who doesn't "need" a living wage should not be given one for a job that deserves a living wage, because, well, a full time job is a full time job and supposed to pay a living wage.
Will the pensioner decide to bury the extra cash so it does nothing to anyone?
Why the hell do the rightwing insist on "What do you NEED" when it comes to paying others but whine about communism where it's "to each according to their need"??? And what CEO NEEDS a million dollar payout? But nothing about what someone NEEDS there, is there.
yeah, not officially, but in reality, there are.
Even the link you posted points out they have no government set minimum wage primarily because strong unions already took care of that and with nearly 100% membership, they have practically the force of law anyway.
love trotting out these "studies" every few years. while struggling grad students benefit briefly from such employment, couldn't the money have been better spent?
The conclusion that companies won't implement automation if labor is cheap enough has some validity. The problem with the conclusion is that the cost of labor is only one of at least a dozen factors to consider.
There is a similar problem when discussing minimum wages in general, let alone increases in minimum wage. If profit margins are too low businesses lay off people, which often reduces their overall business. Consider a Grocery store that can't hire enough people and customers end up leaving before making a purchase, often leaving items in carts. Already short labor is needed to restock items and customer service goes down further, resulting in permanent lost of customers over a short time.
The alternative is to raise prices so that all consumers end up paying more, which results less disposable income in the economy to go toward other businesses. People purchase less clothes, less music, fewer cars, etc.. etc... (FWIW I grew up in poverty so know what you skip out on or get by questionable means when money is not available)
Contrary to what certain political figures want you to believe, it's not like the majority of businesses and business owners are like Scrooge McDuck rolling in the dough laughing at the peons. In fact those companies are an extreme minority.
We suffer with a lack of consideration and dialogue because of half truths.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Axios...enough said. Love the choice of words: "Reich also quibbles with the paper's focus "
Quibbles not Critical or Criticizes.
News site back by JP Morgan & Chase Co., PhRma, Boeing, BP, Bank of America, Koch Industries, S&P Global, United Health Group, Walmart, PepsiCo and Cooley LLP. https://en.wikipedia.org/wiki/... Yeah they don't have an ax to grind about raising the minimum wage.
Because without $10 that person starves or is thrown out onto the street to starve. Therefore there is no equality in this contract.
If there were a UBI then there would no longer be a disparity of power between the one offering a job and the one looking for it. At that point if you can't find someone to do it at $10 you either pay more or do the work yourself. If you don't want to do it yourself, then why the hell should anyone else be forced to do it or starve?
The government isn't actually concerned with minimum wage workers or with the job losses. The actual goal is to increase revenues from income taxes, so as long as there is a net gain from income taxes minimum wage increases will continue.
It's at best a short term remedy even if minimum wage workers still have jobs after the hike. Just because you pay workers more doesn't increase the value of their services. If they can't be replaced with automation, they become an inflationary pressure as the economy adjusts. At the same time some jobs that were higher than minimum wage suddenly become minimum wage, and devalue the progress that next rung of folks have made in their career. Those folks get to start over.
I'm in a region with aggressive wage hike legislation. It has had an observable impact. Now I place my fast food orders at an automated kiosk, my banks have fancy ATMs placed in front of what used to be teller windows just a year ago, and the stores I go to all have started converting checkout isles to self-checkout.
Automation can't be stopped. Eventually we're going to have to figure out what to do with all these extra humans. The civilization that solves that problem will win in the end.
> higher minimum wages encourage employers to automate
The obvious solution, then, is to make it illegal to automate. Labor intensive jobs must remain labor intensive.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
If I lose one $50k worker and save $10 million a year then yes, there's $10 million in the economy. But now that worker is out a job and is desperate to get one. Our complete lack of a social safety net and/or a dole means the cost of that worker doesn't fall on society at large, but on the workforce (in the form of lower wages as labor supply climbs).
In practice you're $50k worker takes a pay cut, which depresses everyone's wages. That $1 dollar doesn't make it into the economy at large because of wage suppression. Instead it's pocketed by the owner class and we take another step towards wealth inequality & oligarchy. This has been going on since the cold war ended and folks started feeling comfortable with moving factories overseas again. Marx predicted all this, but all anyone can remember about him is that a couple of right wing dictators used his books for rabble rousing rhetoric...
tl;dr; you can't compete with slave labor. That's why you have tariffs.
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To hook their cart to a rich man's wagon, and instead work on following through on what Karl Marx's central tenet was: Ownership of the manufacturing by the proletariat.
Until the proles start working for themselves instead of the bourgeois the problem of minimum standard of living will continue. And even once they do own it, they will have to collectively bust their own asses to make it continue working, and migrate their manufacturing base to new products as they old ones fall behind.
This is where the real failure came in. The prole masses had neither the creativity, the education, the independence, or the self-starting necessary to keep from allowing central figures to dictate ideology and their livelihoods to them.
The long term solution is pirate-esque 1 share per prole, with n+1 shares for the elected 'captain' with n(and if required, its stepped values of shares) based on how many layers of administration they are fool enough to have. Too many layers and you end up just like Russia, or China, or America with all the money leeching to the top while the proles struggle to survive. If you don't there isn't much room for advancement, which means you need profit sharing and a cultural desire to increase production and profitability for the good of all members of staff, not just yourself. Without this, you just end up with a pool of slackers who will slowly drag the company down until it collapses. Just look at Soviet Russia, or Sears+K-Mart for examples. Once the proles lose all faith in the system, the system slowly grinds into an unprofitable mess.
Also, for anyone who didn't notice: This is not by itself incompatible with Capitalism. Where the issues come into play is ensuring only employees of a company can own shares of a company (which AFAIK is illegal under US and many European countries laws.) and ensuring that when an employee enters/exits a company their share cost (or deposit) is paid in/cashed out. Do this and we can have dozens or hundreds of relatively large cooperative corporations each providing services to the people and each other without directly trampling on the financial needs of the proles.
Sadly this will never happen, because average people want the possibility of lording their livelihood and financial success over others, even when they themselves will never reach the position of being able to lord over others. It is leaving open the possibility that matters to them.
There is no (viable) "left" in the United States.
Same old story of bullies. Rich people going I'm not giving you anything but a shit sandwhich, and if you fight to get better than that shit sandwhich, we'll make it taste extra like shit. The money is there, the raw resources are there, the products are there, the food is there, but you can't have any of it. People talk about money like it's a finite thing. It's not, it's made up and infinite, and they use it to control what you have to do to have some things. In North America there is enough food, cars, luxury items even that people don't need to go without. If the economy was more balanced, it would be better (except for the people at the top). More freedom, more fun, more choices, less suffering. Like who do they think they are threatening? They want to charge North American prices and take north american money but pay china wages. Well, if no one has jobs or money here, no one buys your products, either. So it's just as bad for them to have no one employed. There isn't going to be automated machines who earn money and buy your products. Increasing prices to line their products good, they have more profit than ever before, but somehow wages will destroy everything if they even remotely follow the increases. I'm not buying it. (Get it? see what I did there?)
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Many here do not understand the cost of hiring an employee.
- Yes, you have the per hour pay rate.
- But you also have the fed and fica. The federal government charges an additional 7.62% of the wage paid, to the employer on top of the wages.
- And there is also, added Workers Comp. Ins. charges which are based on the number of employees and the size of the payroll.
- Equal Opportunity Employment laws.
- And there is health care, if you have 50 employees, the ACA requires you to provide health care. There are 27,000 pages of reg's in the ACA alone.
- Finally, there are numerous reports that are required by the feds, states, etc. when a business has employees that also add to the cost of choosing to hire. Making the choice to hire is a real balancing act for small businesses.
I think the basic formula is base pay rate plus 50%+ is a real estimated cost to the employer.
FYI I am not saying any of this is wrong, but there is a lot more cost for each employee than just the base pay rate. And in order to understand anything one should have all the facts.
Partially correct, the minimum wage adjusted for inflation would be $6.65 from 1960, and it is $7 today. http://www.stateofworkingameri... the problem is not the minimum wage, but that some stuff did increase vastly above the inflation. A 2 bedroom in 1980 in San Francisco was $500 / $600, but now it vastly increase to $4000 in some extreme cases. Inflation adjusted rent should be around $1400. https://medium.com/@mccannatro... For all practical intent and purpose, due to housing speculation (which is still frankly going on) and some ancillaries effect which do not help but increase the problem (e.g. airbnb , rent apartment converted to quasi hotel rooms), rent has become nearly 50% or 60% of the monthly cost of people if they stay in city center, so they are relegated far away from their work, which decrease their likelihood of entertainment or self education (it is hard to go to a side course when you spend 4 hours on travel during the day) and increase stress. Basically I agree with you it is jsut that your data is not 100% correct.
C. Sagan : A demon haunted world:
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visit randi.org
Shouldn't this be obvious? Make workers more expensive produces the expected result of companies seeking alternatives to expensive workers?
Well, I see a good thing of it.. get the race to automation into higher gear. Once that automation really starts to make a dent, we'll revisit the immense unemployment it's created.
There isn't going to be automated machines who earn money and buy your products.
See this is your flaw. Automated machines will most definitely be earning money, for their owners. They will be much more efficient at making money than their human counterparts ever were. They'll never call in sick, hell, they don't even need to go home. They can work 24/7. They don't complain, they don't form unions. How could anyone *NOT* make money with these?
Second point: Actually, it is speculated that automation will have some job-creating effects. There will still be a need for people to maintain those bots. And buy replacement parts.
So yeah, automations will definitely be making money, and they'll definitely be employing their caretakers and buying replacement parts.
Do you really need a study for this? I suggest a trip to Seattle.
We should automate all jobs and eliminate work. There seems to be some puritan idea of work being good for the character or something. No, work is a terrible waste of the gift of life, and the sooner we are rid of it, the better.
The costs of automating jobs is heading in one direction, down.
Every year it becomes more economically feasible to replace workers with machines.
So $1 /hr pay rise or not, those jobs are at risk.
The rest of the world will eventually adapt and cope, the USA will struggle because the UBI will be seen as socialism
There is more to minimum wage than just how much a working person gets payed. Minimum wage ia also about how low we allow labor productivities to be. employing people at $2 an hour is good for no one.
From the same old people
National Bureau of Economic Research also known as theCorporate Whores who sold pricing studies to keep Big Tobacco in business
You really need better sources for economic SPECULATION!!
These guys are good enough as record keepers for recessions, but not much else.
Actually, it is speculated that automation will have some job-creating effects. There will still be a need for people to maintain those bots. And buy replacement parts.
Only retards speculate that there will be any substantial amounts of jobs created this way. You see, the whole point of automating is to get humans out of the loop. As soon as you start to need lots of maintenance, that equals having to pay workers so they can pay for rent and food. Besides, industrial robots have been able to maintain each other for like 30 years.
So, automation can replace a whole lot of humans, robots are quite capable of maintaining themselves and if you're wearing out parts at a high pace that's probably not happening at a higher pace than currently or you're proposing to wear out people rather than machines instead. And again, it's quite possible to create automations which make new parts to replace the worn out ones.
There are not going to be any where near as many jobs created running the automated industry as gets removed by it. Not by a long shot.
Here is an interesting thought experiment. Assume our main goal is that everyone gets a living wage.
First assume we don't have minimum wage laws. Therefore the government needs to make up the difference. (This is a bit how it is now with subsidized housing and food stamps.) This seems like a reasonable system. If we did have a minimum wage then it might be too high for full employment and the government would have to fully pay for this living wage. Therefore the companies are offsetting this cost. Of course, with this system, what incentive do these workers have to get a job. If this was a free market then a company would need to pay above the cost of living to get people to work, probably a lot above since getting a few extra bucks is not going to entice someone to work 8 hours a day. Of course, if the company couldn't afford the cost of living, it can't afford more, so these jobs don't exist. Therefore, this system doesn't help.
Next assume, we do have minimum wage laws that are somehow pegged at cost of living. Is this much different? Not really. Still there is little incentive for people at this wage to work. Perhaps we have minimum wage at something like twice the cost of living. This is less clear. A business might not be profitable at the higher wage and people might be willing to accept the lower wage. (The only upside is we would be making it harder for companies to not share the wealth and perhaps decrease inequality for some at the potential cost of pushing some people back to cost of living and increasing their inequality. Assuming reducing inequality was a goal, the details could be decided based on employment data.)
Last assume, we have universal basic income. (Tying it cost of living is an interesting problem.) This looks like a good solution. There is no wall to cross for entry level jobs. Any money a job offers you is money in your pocket. One can think of this as a way to redistribute wealth. Image a closed system where everyone got an equal share of 10% of the pie and the rest was distributed based on value added to the economy. To me this seems like a reasonable trade-off.
Chris Mesterharm
Thomas Sowell has written extensively on this subject. Minimum wage laws were introduced by blatantly racist legislators pushing eugenic goals in the early 1900s, with the intention of rendering "undesirables" unemployable, and therefore unable to marry and have children.
Today's minimum wage advocates are more stupid than evil, but they still do horrible damage to the least-skilled members of society. They imagine that a minimum wage law says "Here you go: you get to earn at least this much!", but what they actually do is forbid you from earning anything unless your labor is able to fetch that cutoff price.
The real minimum wage is always zero.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The biggest problem with not raising the minimum wage, imo, is that if it's low enough that a full time employee on minimum wage qualifies for state assistance then the reality is that the tax payers are footing part of the paycheck for the company involved.
To few comprehend the enormous amount of corporate welfare going on as tax payers fund the lives of minimum wage workers, while the corporation reaps the profit.
The minimum wage should always be set high enough that someone working full time earning it would not qualify for government assistance.
Unlink employment from health insurance or make it more EU like where in some cases the employer pays in something or can pay something in. But they are not stuck paying the higher costs of sick people (higher rates small places and can be in for a big hit (self fund))
benefits cliffs are an issue where it can be better to not work or not to work more then X hours.
strong unions already took care of that and with nearly 100% membership
Union membership by country:
Sweden - 82%
Denmark - 76%
Norway - 57%
Switzerland - 22%
Businesses where low wages are common, such as retail and fast-food, are the least likely to be unionized.
Of course they'll automate. They'd automate anyway. Their ideal world is no workers, affluent customers, and I assume packs of armed drones keeping the starving armies away from their mountain lairs.
Of course we need unions, mandated non-capital representation on corporate boards a la Germany, international laws forbidding seeking slave labor, minimum wages, and YES, rent controls. Or it goes to hell fast.
Minimum wages have gone up for a century or more and unemployment is still near the minimum.
The argument for Universal Basic Income should not be based on any concept of fairness or trying to guarantee outcomes. That path is generally unworkable anyway.
It should be about self preservation.
If a societies wealth ends up too concentrated among a small segment of the population (say 10%), you are going to end up with 90% of the population having a huge incentive to destroy the social economic system that is screwing them over.
More bluntly, a rich person is able to live a life of comfort and luxury because all of his poorer neighbors are not envious and angry enough to want to tear his head off and take his shit.
If 90% of the population is living in poverty and squalor, the wealthy 10% have a good incentive to spread enough of the wealth around to keep that 90% content enough that they do not want to murder wealthy.
END COMMUNICATION
Besides it's not like the US has a lack of low paying jobs... In fact unemployment isn't high, it's just many of the jobs are low paying.
Too low unemployment isn't healthy either, it might worthwhile translating some of the low paying jobs into fewer slightly higher paying jobs when unemployment is low. If unemployment is too low that'll hinder growth too..
Canada currently has relatively low employment (just googled for a graph)...
So the idea of translating some of the low paying jobs to higher paying jobs might be worth while... Sure unemployment might increase a little in the process, but if unemployment keeps going down it'll eventually strangle the economy too.
When unemployment is low, encouraging automation by increasing minimum wages seems to make sense.
Note: from a human perspective having a living minimum wage always makes sense.
If everyone worked 60 hours a week, then not enough would be out consuming to keep econ going. And it may make for less available jobs since 2 people do the work that 3 normally would. Still doesn't scale. Try again.
Robots have a great work ethic, by the way. (Until they break down.)
Table-ized A.I.
You're looking at a single market. They don't buy food, buy cars, houses, toliet paper, paper plates, go camping, visit the waterslides, etc. There is a large part of the economy you're ignoring.
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Who did not see that coming? Low wage jobs are generally low skill and if employers have cheaper alternatives then they will at least try them out. I suspect though its less about automation, and more about fewer workers doing more work for that higher minimum wage.
File this one as not so common common sense...
Norway nationalized the North Sea oil fields, their economy is atypical.
Norway has a very aggressive personal income tax rate, approaching 40%.
The average US worker pays 0% personal income tax, over 40% of tax filers actually get refunds in excess of all monies paid in.
https://tradingeconomics.com/n...
Ken
the sun will come out tomorrow
It's common sense that if a job can be automated, but hasn't yet due to cost, that increasing wages could suddenly make it worth automating. It's also common sense that if the job can be automated and the only factor is cost, that eventually it will be automated regardless of wages. So I think using "automation" as a bogey man to keep wages low is foolish at best.
Short term inflation in areas that use a lot of unskilled labor is the main reason I'm usually against minimum wage increases, but honestly, if you look at the cost of living (especially housing costs), it's clear wages need to go up across the board these days. I know a lot of "conservatives" (which I consider myself conservative leaning) would argue that it's not McD's responsiblity to insure their employees can pay rent or buy food (and its really not), but it hurts all of us if people starting out can't actually survive without leaning on their parents or the government. Increasing min wage so the burden is shared equally (in the form of inflation) is probably the cheapest & fairest overall way of handling the problem.
Automation will happen regardless of what happens with the minimum wage.
Manufacturers see an opportunity to reduce labor cost AND introduce what is thought to be a more reliable, consistent, predictable labor resource. It does not matter what the minimum wage is.
Machines are there every day, all day. Their output typically is predictable. They don't organize into unions. Their performance isn't affected by personal problems. They don't need rest breaks, bathroom breaks, lunch breaks, healthcare plans, pensions or 401k's. Typically you can turn the overhead lights off while the machines do their work. All the OSHA issues go away. And the equipment is a capital asset and can be depreciated over some period of time whereas an employee has increases in the burden rate.
There probably are more reasons, but I think the list I've given already add up to a tidy profit margin.
An effective "democracy" creates the illusion the people have a say in their government.
ABSTRACT: The economic ignorace of the “Let’s Raise the Minimum Wage” gang is matched only by their smugness. In their confused, economically-illiterate universe, you either advocate for an increase in the minimum wage or you hate poor people. As anyone with an understanding of basic economics can tell you, this is precisely the opposite. As economists have discussed for years and study after study shows, minimum wage laws ultimately lower the earnings of the poorest members of the working poor and force mom and pops out of business in favor of the corporate chain mega-giants. But there is something altogether darker to this story of the minimum wage than the perversity of its effects or the smugness of its proponents. The sad truth is that minimum wage laws were first discussed and advocated for by those who knew that it would make the poor even poorer and actively wished that to be the case.
________________________
"OK, here's an idea no one's thought of before. You know how fast-food workers are organizing in the US right now to fight for a $15/hour minimum wage? That's stupid. They're still going to be just scraping by on a wage like that. So why not make it something that'll really make a difference? Why not $150/hour?
"Think about it: At $150/hour, they'll have to work only a few hours a week to make the same money they're making working full-time right now. Or if they continue to work full- time, then they'll be earning a six-digit annual income! Pretty soon everyone will be rich!
"Brilliant, right? Fight for $15? Pffffffffff, that's for slaves. Fight for $150, that's what I say!"
You might think this is a parody of the Let's Raise the Minimum Wage school of bad economics. You might even think it's a sophisticated meta-parody of the people who parody the Fight for $15 campaign. But sadly, neither scenario is the case. This is the actual, honest-to-goodness "argument" of genuine economic illiterates like Vox.com "journalist" Matthew Yglesias, who dropped these gems on the Twittersphere last week:
You'd have a big burst of inflation, nobody would lose their jobs, a lot of old debts would be wiped out, and we'd be better off for it.
— Matthew Yglesias (@mattyglesias) July 3, 2017
Excuse me? Could you repeat that?
"Let the Fed figure out how to make it work."
"Nobody would lose their jobs."
"You'd have a big burst of inflation and we'd be better off for it."
Sigh.
Now, to be fair, Yglesias is rather notorious for his guerilla gorilla journalism approach of throwing a whole bunch of steaming crap at Twitter and then deleting the turds that don't stick, so take his latest droppings with a grain of salt. But the sad thing is that, as much as this line of reasoning has become the go-to reductio ad absurdum to reveal the economic stupidity of the Fight for $15 movement, it is still unironically put forward by some of that movement's proponents as a legitimate idea.
It's heartening that some of the responses on Twitter have accurately identified various parts of this insanity:
I legitimately have no idea if this is trolling or the dumbest economic idea I have ever heard of pic.twitter.com/gQ5OkMgou8
— WarHawkileaks (@Wokieleaksalt) July 3, 2017
and
Let's just add three zeroes to every dollar amount in the U.S., but say the zeroes are implied so we don't have to print new money.
— Adam Sanders (@adamsanders) July 3, 2017
But for those who prefer their economics to come from economists rather than social media, you're in luck. A brand new paper from a University of Washington team studying the effects of Seattle's minimum wage laws has just been published by the National Bureau of Economic Research. Unlike the previous literature on the minimum wage laws (the ones that earnest socialists like to cite
Unions in Europe also tend to be much more rational than ones in the US. In the US they are often all about making union leadership richer, and using the members to get ahead. For example, the IAM (machinist's union) which tends to strike at Boeing every 3-4 years. Boeing holds out just long enough so, when they give in to union demands for a 4% or 5% increase over the next few years, they've already saved enough wages not paid to the striking workers to offset that strike. Yet the union leadership demands and pushes for that strike every single chance they get - and use it to increase dues and raise their own salaries (which are quite high, most qualifying as being in the top 1%).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Alternative headline: "Higher minimum wages to promote innovation and new inventions.".
And in other news, "Water is WET!"
So what this is saying that the laws of economics haven't been repealed and what we predicted before the idiotic $15 minimum wage is coming to pass.
I know that there are idiots that think that businesses exist only to pay workers, but it's not true. Businesses exist to make a profit by providing a good or service that is either superior in quality or price (or both). Nothing more.
Ever notice how they normally raise minimum wage a $1.25 every 10 years or so, and now they want to jump it all the way up to $15.00 an hour? Ever wonder why? Well, if they can get it up that high, that's the range where they can replace low-income workers with AI and make a good profit. I can see all of the dumb, poor, and stupid of the 19 states that have accepted this going "HELL YES!" to that minimum wage price increase, which is exactly what they want them to think and do. They are being played, and they're WAY too stupid to even realize this.
Anywho, ideas are meant to be discussed and debated at times, and if the world is incapable of seeing AI and near complete automation as a very, very serious threat to humanity because of insatiable greed in individuals and profits on Wall Street, then we totally deserve the wars that will be fought over this situation.
Basically, I'm trying to warn the world that these financial gifts with the steep increases in minimum wage are not what they first seem to be or appear, as are others in the economic community. They are not trying to help the poor. They are trying to destroy them and eventually get rid of the middle class with AI and automation, and the general pubic are WAY too stupid to see that they are actually being their own worst enemy when voting such things into law. From this article, 19 states have agreed to make significant increases to the minimum wage. It might already to too late to stop this shit from happening.
In the next 5-to-10 years, you'll start to see AI receptionist that answer a business phone and talk with people, they'll probably sell for $20K, and they'll even have installment plans for business owners. You'll also see folks interacting with their cars in conversation, asking the about the current weather at their destination, the current location of their children, and so forth. AI is going to sweep the world, and when people finally start complaining about them not being able to find a job to support their families, it will all be rationalized away, with them all saying that they can't afford to hire humans, their AI's work longer and harder -- 24/7/365 -- and that they never, ever complain, don't require breaks and medical leave, and on and on, making humans even more dependant on the government.
To add insult to injury, Dumb Fuckerberg and Bill Gates of Hell seem like they're doing a great thing, supporting code.org, trying to teach kids to design software and hardware, right? WRONG! What they are really doing is trying to inundate the technical industry with techies to promote competition and LOWER the average cost of programmers and engineers, increasing their profit margins in the process. This is a long-term plan for them. All of the technical industry execs and Wall Street want to see this happen. This is all about greed, and it always will be.
It WILL happen. Maybe a minimum wage can make it happen a bit sooner, maybe not, doesn't matter - it WILL happen.
So any jobs lost due to minimum wage would have been lost regardless, just maybe a few years later.
Human labour cannot EVER compete with machines -sooner or later the capital investment for automation is ALWAYS worth it. Even if minimum wage hastens that a bit, it is not doing anything that wouldn't have happened eventually anyway.
In the meantime, those who ARE still employed can at least pay their bills, feed their families, save up some money to send their kids to college, and you know - go shopping which creates at least SOME new jobs.
Water is wet and the sky is blue.
This is about the political economy and wage suppression. You don't hear the talking heads raise the risk of rising commodity prices and unemployment. Add some point you have to decide which side you are on, and if you want to carry water for employers. There is a cost to doing business.