6 ms·

Try a $15 Minimum Wage and See Those Jobs Get Automated Out of Existence

4 points by fixxer 11y ago

canthonytucci 11y ago
Won't let me view article with 1blocker installed on iOS. Oh well.
blacksqr 11y ago
Good luck staying in business when you automate your entire customer base out of work.
Thetawaves 11y ago
What about the Automat? It's been proven again and again that people don't want to deal with poor vending machine food, and fast food has been on the decline for almost a decade now. Consumers have already made the choice, and Carls Jr is not it. Automation won't change that.
andrewclunn 11y ago
Oh please, if those jobs could have been automated already, then they would have. It's cheaper technology that will eliminate those jobs, not a $15 minimum wage.
- anthony_james 11y ago
  That's not necessarily true. A $15 minimum wage is a doubling of the wage rate in most states, and as a result, doubles the incentives for someone who automates the minimum wage jobs out of existence. It's all relative. If we assume entrepreneurs want to deliver a million dollars worth of value and the minimum wage was $8, they would have to automate 125,000 jobs out of existence in order to achieve $1,000,000 worth of value-added. With a $15 minimum wage, they now only need to automate ~67,000. That's almost half the work they'll need to do now for the same result.
  - andrewclunn 11y ago
    The limitations of things like self checkout have been largely customer driven, the expense of equipment (installation, repairs, etc...), and the logistics of such a transformation. I think there are many more hard limits on the ability to replace on site service workers with technology than most people realize. The barriers are far greater than a few dollars an hour per employee. If they weren't the low wage service workers would have already been replaced. This is also not an area that drives technological innovation, but rather benefits from advances made by other industries, so I do not believe that raising the minimum wage would escalate this process.
pink_dinner 11y ago
Mandating a higher wage through law won't work in the long-run. Inflation will catch up in a few years and a person making $15/hour will no longer have the increased spending power they once had when they first got the boost in pay.
- Thetawaves 11y ago
  There are several problems with this simplified view of the economy. Namely that the inflation rate is not realistically tied to minimum wage in any way. In your view, why do we even have a minimum wage at all? Obviously if the job is so inefficient at creating wealth that it isn't worth paying minimum wage to do the work, that work needs not be done at all.
  - anthony_james 11y ago
    Inflation has averaged about 2.5% annually since 2000. In 20 years, the spending power of a 100% bump in minimum wage (from ~$7.5 to $15) would be destroyed. This conservatively assumes that business owners just don't automatically increase the price point of their goods more rapidly than the average. His viewpoint isn't simple, it's realistic. Often times there are jobs that provide value at an hourly rate greater than $0.00 and less than whatever the minimum wage is at. The job could be done, and provide meaningful value, so just because it isn't worth paying a minimum wage doesn't mean the job shouldn't be done at all. It's a difficult situation because the employer wants to pay the worker a fair value for the job, but the government forces them to pay more than the fair value of their work. That's a poor moral and financial situation, and so businesses look for people in other countries, or technology to automate the job completely. The trouble with increasing a minimum wage is that it increases the reward for whichever entrepreneur is able to automate that job function, which would further income inequality in the long run by causing job loss of all those workers. One question I have is why do we care so much about protecting minimum wage jobs? If no one had the safety net of a minimum wage job, they would be forced to innovate and pursue groundbreaking research in other fields - such as medicine or technology. Imagine if the rate of innovate was exponentially increased - think of the thousands of lives we could save or the decrease in costs of healthcare if we said "no one can work at Starbucks - you have to be a doctor." source: http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_...
PhantomGremlin 11y ago
It is happening gradually, but Oregon is already doing this: http://www.oregonlive.com/politics/index.ssf/2016/03/its_official_kate_brown_signs.html http://www.oregonlive.com/politics/index.ssf/2016/03/its_off... I think it's great that an "experiment" like this is taking place in a single state. It gives the rest of the country the opportunity to observe, to learn from the experiences of others.

4 points by fixxer 11y ago

canthonytucci 11y ago

Won't let me view article with 1blocker installed on iOS. Oh well.

blacksqr 11y ago

Good luck staying in business when you automate your entire customer base out of work.

Thetawaves 11y ago

What about the Automat? It's been proven again and again that people don't want to deal with poor vending machine food, and fast food has been on the decline for almost a decade now. Consumers have already made the choice, and Carls Jr is not it. Automation won't change that.

andrewclunn 11y ago

Oh please, if those jobs could have been automated already, then they would have. It's cheaper technology that will eliminate those jobs, not a $15 minimum wage.

anthony_james 11y ago
That's not necessarily true. A $15 minimum wage is a doubling of the wage rate in most states, and as a result, doubles the incentives for someone who automates the minimum wage jobs out of existence. It's all relative. If we assume entrepreneurs want to deliver a million dollars worth of value and the minimum wage was $8, they would have to automate 125,000 jobs out of existence in order to achieve $1,000,000 worth of value-added. With a $15 minimum wage, they now only need to automate ~67,000. That's almost half the work they'll need to do now for the same result.
- andrewclunn 11y ago
  The limitations of things like self checkout have been largely customer driven, the expense of equipment (installation, repairs, etc...), and the logistics of such a transformation. I think there are many more hard limits on the ability to replace on site service workers with technology than most people realize. The barriers are far greater than a few dollars an hour per employee. If they weren't the low wage service workers would have already been replaced. This is also not an area that drives technological innovation, but rather benefits from advances made by other industries, so I do not believe that raising the minimum wage would escalate this process.

pink_dinner 11y ago

Mandating a higher wage through law won't work in the long-run. Inflation will catch up in a few years and a person making $15/hour will no longer have the increased spending power they once had when they first got the boost in pay.

Thetawaves 11y ago
There are several problems with this simplified view of the economy. Namely that the inflation rate is not realistically tied to minimum wage in any way. In your view, why do we even have a minimum wage at all? Obviously if the job is so inefficient at creating wealth that it isn't worth paying minimum wage to do the work, that work needs not be done at all.
- anthony_james 11y ago
  Inflation has averaged about 2.5% annually since 2000. In 20 years, the spending power of a 100% bump in minimum wage (from ~$7.5 to $15) would be destroyed. This conservatively assumes that business owners just don't automatically increase the price point of their goods more rapidly than the average. His viewpoint isn't simple, it's realistic. Often times there are jobs that provide value at an hourly rate greater than $0.00 and less than whatever the minimum wage is at. The job could be done, and provide meaningful value, so just because it isn't worth paying a minimum wage doesn't mean the job shouldn't be done at all. It's a difficult situation because the employer wants to pay the worker a fair value for the job, but the government forces them to pay more than the fair value of their work. That's a poor moral and financial situation, and so businesses look for people in other countries, or technology to automate the job completely. The trouble with increasing a minimum wage is that it increases the reward for whichever entrepreneur is able to automate that job function, which would further income inequality in the long run by causing job loss of all those workers. One question I have is why do we care so much about protecting minimum wage jobs? If no one had the safety net of a minimum wage job, they would be forced to innovate and pursue groundbreaking research in other fields - such as medicine or technology. Imagine if the rate of innovate was exponentially increased - think of the thousands of lives we could save or the decrease in costs of healthcare if we said "no one can work at Starbucks - you have to be a doctor." source: http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp http://inflationdata.com/Inflation/Inflation_Rate/Long_Term_...

PhantomGremlin 11y ago

It is happening gradually, but Oregon is already doing this: http://www.oregonlive.com/politics/index.ssf/2016/03/its_official_kate_brown_signs.html http://www.oregonlive.com/politics/index.ssf/2016/03/its_off... I think it's great that an "experiment" like this is taking place in a single state. It gives the rest of the country the opportunity to observe, to learn from the experiences of others.