21 ms·

Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

125 points by frostmatthew 11y ago

EdSharkey 11y ago
stagflation
- WalterSear 11y ago
  We are going to get both - mass redundancy on top of stagflation - reporter cum arm-chair economists notwithstanding.
- pessimizer 11y ago
  Negative interest rates.
oconnore 11y ago
Here is the critical section of the article: > What about the workers thrown out of jobs by the new robo-waiters? Many would get new jobs, though the way this would work is often ignored. > Most restaurants would keep longer hours (they're paying for the rent and the robots anyway), meaning many workers would get a raise and change shifts. No, the workers are now fired. They don't get a raise. > The advanced robo-restaurant technology would itself be a valuable American export good, and people would be employed in designing and selling it. Yes, but not the people we just fired. > Some low-wage work would be reallocated out of the relatively low-social-value restaurant sector and into things like child care and home health assistance, for which there is ample demand. If there is ample demand for such things, and those things pay better, and typical restaurant workers are qualified, then we should already see a mass exodus from restaurant work. We don't. Thus one of these things isn't true. > Since poor people are now making more money... You have not given any evidence to support this.
- HillaryBriss 11y ago
  > The advanced robo-restaurant technology would itself be a valuable American export good ... Yeah. I don't know about this one either. Why do I get the feeling America will be buying a really large fraction of those robots from overseas?
- bradleyprice 11y ago
  This was my thought as well. I'm not even sure how to judge this article. It seems very misinformed with making assumptions without any supporting evidence on how we get there. It's true that automation would bring in new jobs, but not the jobs that the people affected would be able to jump into. As far as the whole child care and home health jobs go, I'm not sure there would be a mass influx of opportunities there. I don't know if I've ever personally seen employees at a daycare making much more than minimum wage and there's already a thin margin with daycares. So, I'd think they'd be in same trouble as a restaurant employee.
  - protomyth 11y ago
    Daycare is a hard industry to pay decent wages since it's basically a replacement for an adult to stay home and the child to staff ratio is a factor (infants were 3 to 1 staff). Also, about 1/2 the population (males) are heavily discriminated against (85+% women). I did budgets for a group of daycares serving 45 families in the 90's and we did not pay well even for ND.
- curiousgeorgio 11y ago
  > Some low-wage work would be reallocated ... Since poor people are now making more money, there will be opportunities to sell them things — things like restaurant meals! — that they couldn't previously afford, which in turn creates demand for new jobs. Even if the poor people were making more money, the rest of the logic here is equally as flawed; somehow by firing people and replacing them with machines, those people will spend more money, and that will create the same jobs for which they were replaced by machines. Kind of a new twist on circular logic where each point in the circle is also a logical fallacy.
- cornholio 11y ago
  You are essentially making the luddite case. The counterargument usually goes like this: yes, people would be fired and there will be serious pain in the short run; however the machines will drastically improve productivity, therefore reduce prices, so real wages will go up along with demand and the extra income not spent on, say, buying feed stock for your horse, will go in creating other jobs and economic sectors that will make use of the available labor. The government can and should ease the transition by offering skill-training and incentives. While economically sound, I'm skeptical this process can go on forever. The human biology and mind is clearly limited, while the progress of machines does not seem to be. So eventually you will hit a fundamental limit where larger and larger chunks of the workforce will simply be too old, uneducated or simply too human to keep up. How close we are to this fundamental limit it's anyone's guess, but I would venture to say we are closer than most think. At the point where a serious part of the population is unable to participate in the labor market, this ceases to be an appropriate system to distribute the fruits of economic activity and some form of basic income is required to maintain social order.
  - deegles 11y ago
    I read somewhere that the amount of people employed in the transportation industry is roughly equal to the tech industry. If 75% or more become redundant, where will they go? Certainly not the restaurant industry... One theory I have about all of the coding "boot camps" popping up is that they are preparing for an exodus of people from the next job sector to be automated/eliminated (auto-lated?).
    - protomyth 11y ago
      If you look at the most popular job in each state, you will find truck driving is either #1 or pretty high on the list.
      - greeneggs 11y ago
        Citation: http://www.npr.org/sections/money/2015/02/05/382664837/map-the-most-common-job-in-every-state http://www.npr.org/sections/money/2015/02/05/382664837/map-t... The prevalence of secretaries from 1984-1988 is interesting, too.
- fleitz 11y ago
  In 1900 there were 1.6 billion people, and we had a lot less technology, with many people living in poverty. In 2016, there are 7 billion people, we have a lot less technology, only about 1 billion still live in poverty. If technology 'killed' jobs we shouldn't have more than about 400 million people employed in the world.
- mangeletti 11y ago
  I hereby give you an honorary 1000 karma. Reading this article disgusted me. I'm not a "republican" or "democrat", or anything else for that matter, but I have some intelligence and sense. Arguing that raising minimum wage will some how lead to more prosperity is the same thing as stating "people with minimum wage jobs currently have prosperity". The minimum is the minimum, no matter how high we raise it. The only thing raising the minimum wage does is punish people like my little brother who worked so hard to get to $14/hr. If minimum wage is raised to $15, he will earn minimum wage again. This means the buying power he has earned over the past 3 years will be lost to those who should be starting where he started 3 years ago. If you don't understand the difference between that and prosperity, then you're an idiot. That's not an ad hominem attack. That's meant in the literal sense.
  - dragonwriter 11y ago
    Minimum wage increases, experience has shown, put upward pressure on wages generally. It is not the case that everyone making between the old minimum wage and the new minimum wage ends up at the new minimum after the change.
    - SEJeff 11y ago
      Source? I'd like to read up on that.
    - clarkmoody 11y ago
      Let's continue your thought: If minimum wage increases put upward pressure on wages generally, then what happens? Higher wage levels in general means more money in people's pockets, and this can turn into general price inflation (especially since business costs have risen due to the general level of wages going up). So let's assume you now have inflation. This means everything just got more expensive, so now that new higher wage level buys you less and less. And now the people who are completely out of work and can't command the minimum wage for their skills/labor are even farther behind.
      - petra 11y ago
- blazespin 11y ago
  Yes, people will be fired. Yes, that is fine. Yes, we need a minimum guaranteed income as a result of increased automation. Ideally, you'd get the income for going to school and learning.
- sharkjacobs 11y ago
  remember a hundred years ago, when 90% of Americans were employed in agriculture? Remember when tractors were invented, and now only 2% of americans work in agriculture? Yeah, it sucks that 88% of americans are unemployed now.
  - refurb 11y ago
    I was thinking the same thing. Just replace whatever job people are saying will be automated with {horse shoe maker, blacksmith,farmer} and you'd swear the current discussion was taking place in the 1900's.
melling 11y ago
How did someone come to this conclusion? "Right now the retirement age is rising from 65 to 67, and most people think it will have to go up to 70. If robots can do a lot of the work instead, we could put it back down to 65 or even to 62 while still growing the economy. " Robots are going to pay the social security tax.
- unclebucknasty 11y ago
  >How did someone come to this conclusion? With much tortured logic and wishful thinking. Not only will the robots cover social security, they'll also cut the lawns of poor people and keep their mint julep glasses filled.
- HillaryBriss 11y ago
  Assuming everything else stays the same, if a swarm of robots enters the economy and starts doing a shit-ton of everyone's work at a tiny cost, then productivity skyrockets and we all start collecting unlimited social security checks starting at age 62. But everything else won't stay the same. Consumers will start to demand more from the businesses and governments that use these robots. Businesses that don't get more robots -- or more expensive robots -- will be left behind. Pretty soon the productivity miracle disappears and we all have to work until we're 70, just like before.
- djrogers 11y ago
  I honestly couldn't figure this one out either... Although now that I think about it, I wouldn't put it past some politicians to come up with a plan to tax businesses for automation as a way to counter the SS shortfall. Kinda like taxing miles driven now that cars are so efficient the gas taxes don't work anymore.
- kuschku 11y ago
  > Robots are going to pay the social security tax. Those robots are owned by business owners like half of the people commenting in this thread, and, like the comments already show, they’ll push for 0 taxes on their robots. They’d rather have people die than to increase the costs of their products by a few dollar.
- 11y ago
davidiach 11y ago
Thought experiment. If the government will start forcing your employer to pay you, lets say 70% more than you currently make beginning next month (if they want to keep you), would you be worried about losing your job? Oh, and let's not forget, nobody else will be allowed to hire you from that point on if they don't pay you at least that amount that your current employer will be forced to pay you from now on.
- redmorphium 11y ago
  If I were replaceable by automation, I would be.
- notatoad 11y ago
  And the other thought experiment: you're currently making 70% more than somebody who holds significantly less responsibility than you do, and has significantly less skill than you. If the salary their position pays is increased to match your salary, what are you going to do?
wrong_variable 11y ago
A hike in the cost of labour was the reason why the industrial revolution happened in Britain vs India. Even today, the cost of labour is so little in India that there is no need to innovate in robotics,AI etc. To me the question should be framed as - do we want minimum wage workers to be slaves ? This is essentially the argument being made. If robots are actually cheaper then why haven't they being deployed yet ? Having done research in robotics when I was younger - there are more productive use of roboticist's time then to go after minimum wage service workers. Its non-trivial to exchange a waiter with a robot, and we already have "ready made" food - so why do people still go restaurant ? The only thing a hike in minimum wage is going to do is cut into the profits of restaurant owners, landlords and big chain corporations.
- GFK_of_xmaspast 11y ago
  > A hike in the cost of labour was the reason why the industrial revolution happened in Britain vs India There was also the forced de-industrialization of one of those nations by the other one.
- erichocean 11y ago
  > If robots are actually cheaper then why haven't they being deployed yet? Easy: because software is hard.
unclebucknasty 11y ago
The article makes a number of arguments as if stating accepted facts, when much of it doesn't even logically follow. >Some low-wage work would be reallocated out of the relatively low-social-value restaurant sector and into things like child care and home health assistance, for which there is ample demand. If this is true, then what is preventing it from happening now? >we are able to produce everything we need with less labor, we can afford to let people work less. The tired old utopia argument. Robots will do everything while we all sun on the beach. Firstly, this ignores the fact that people spend their time working because they need money, not because there is work to be done. Secondly, If we are making things with less labor, then there is less demand for labor and, thus, lower wages. Yet, the producers realize higher profits. The actual result is not utopia for all, but the wealth divide that we see now. >Most restaurants would keep longer hours (they're paying for the rent and the robots anyway), meaning many workers would get a raise and change shifts. Not sure where any of the leaps of logic packed in there originate. The entire statement is completely irrational. >advanced robo-restaurant technology would itself be a valuable American export good, and people would be employed in designing and selling it Complete sleight of hand. We're talking about the effect on low wage workers, not highly skilled robotics designers and sales engineers. The people who are displaced are very unlikely to gain employment designing the robots that are replacing them.
TheSpiceIsLife 11y ago
> Even better, to the extent that we are able to produce everything we need with less labor, we can afford to let people work less. I'm doubtful. From what I've seen it just means that those who do have full time jobs are expected to work more. Why employ two people for 20 hours a week when you can have one person for 40hrs a week? For most industries the managerial and administrative overheads are less with fewer staff who work longer hours. > but has not really succeeded in shedding much light on where innovation comes from or what policies support it. Deirdre N. McCloskey might have something to say about that in her tomb 'Bourgeois Dignity: Why Economics Can't Explain the Modern World'[1][2]. tl;dr her argument is that the ability to bring innovation to market, profit, and be dignified in doing so is the factor that brought about the modern world. And besides, we only have to look at other developed nations with liveable minimum wages to see that it hasn't caused an automation revolution. Where I live, Australia, has an adult minimum full-time wage of $17.29[3] and has an unemployment rate of 5.8%[4] (for some definitions of 'unemployed'). A liveable minimum wage isn't going to cause an automation revolution. The Automation Revolution is going to be what causes the automation revolution, and for that to happen we're going to need cheap general purpose robots trickling in to the second hand market. When a business can buy a general purpose robot for less than 5x the annual salary of a full-time employee, and it can learn new skills as easily as a human, we'll be close. It's looking like that's a way off yet. 1. http://www.deirdremccloskey.com/ http://www.deirdremccloskey.com/ 2. https://en.wikipedia.org/wiki/Deirdre_McCloskey https://en.wikipedia.org/wiki/Deirdre_McCloskey 3. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/minimum-wages#current-national-minimum-wage https://www.fairwork.gov.au/how-we-will-help/templates-and-g... 4. http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0 http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0
- hardcandy 11y ago
  Australia is being fueled by huge external stimulus from China, which won't last forever. It's not the best example to use. Some of the mature European democracies provide much more useful data.
  - TheSpiceIsLife 11y ago
Pyxl101 11y ago
I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages at current profitability levels. Seattle's minimum wage for example has caused a massive loss of jobs compared to the rest of the state: https://www.aei.org/publication/minimum-wage-effect-from-jan-to-sept-seattle-msa-restaurant-jobs-fell-700-vs-5800-food-jobs-in-rest-of-state/ https://www.aei.org/publication/minimum-wage-effect-from-jan... Minimum wage directly causes unemployment by making it illegal to employ people at their fair market wage. [Edit: I'd be glad to read an argument for minimum wage if someone would like to link one. The articles that I see in the news tend to engage in moralizing and lack real explanation and justification.]
- Retra 11y ago
  The "good argument" for having a minimum wage is that without it, wages will be pressured down, because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity. Besides, you're just assuming people should be employed at "fair market wage." The political process is part of the market, and the fair market wage is determined by what is politically determined to be fair (AKA, minimum wage) just as much as it is by employers' demands. As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare.
  - fche 11y ago
    "As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare." That's funny, but true. You know what else is at least as true? No people are entitled to employment, especially at a loss to the business.
xorgar831 11y ago
It's amazing how pushing technical boundaries is seen as worthy challenge, but helping the those who are struggling with basic needs is seen as impossible and an irritating overstep by the government.
alkonaut 11y ago
Minimum wage hikes are tough pills to swallow, but they are a reaction to lack of wage increases over time. If the lowest wages had followed the s&p or management comp. over the last decades then this would be a non-issue. Weak labor/low organization and the fact that many bought the myth of "trickle down economics" has kept the lowest wages where the 1% wants them. As for automation: if there are gains from automation they are likely there already. I Mercedes builds cars much differently in the US compared to Germany despite big differences in labor costs. One difference that is immediately noticeable with high labor costs is not in industry but in services 1) more self-service such as self checkout at grocery store, self-checkin at airport 2) no non-essential services such as greeters, bag-packers, 3) DIY is common
nxzero 11y ago
Automation unless the becomes the norm will never complete replace humans. For example, number of places allow you to place an order via an app, but customer with the awareness and ability to do so will just stand in line waiting. Plentiful amount of additional explains, but the point is customer, not business decide what they want, and customers often herd or group think.
danielrhodes 11y ago
I think what you're going to see with any minimum wage hike is that businesses who have thin margins, namely restaurants and small stores, will be forced to go out of business or be forced to degrade their quality of service. Labor costs are for any business the biggest line-item expense. Spending on "robo waiters" or what have you is a big upfront capital expenditure, and I doubt many restaurants will be able to finance it. But it's not just small establishments: even Walmart is very exposed to these wage hikes. While it appears like they have lots of money, a lot of how they do what they do is based on cheap labor. In SF, after they boosted the minimum wage, I observed a few stores go out of business. I'm all for people being paid more, but I doubt people losing their jobs altogether was the intended consequence. Another thing I observed was the price of eating out in SF rose considerably. I remember feeling shocked that for a simple lunch (certainly not a luxury), I paid over $30. Things like that hurt people on the lower end of the economic spectrum, especially since poorer people are very sensitive to food prices. The sad thing is: after taxes, if somebody is working the maximum hours they can without being a full-time employee (which very few minimum wage earners are), this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life. Perhaps I am cynical, but I don't see these wage hikes as having a net positive impact. What drives up wages is a shortage in the labor supply and businesses that need more skilled employees who they are willing to train and keep for awhile. A minimum wage hike just gives businesses more reasons not to hire people.
- pm24601 11y ago
  > this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life. It absolutely would have a big impact. You are talking food for a money, a monthly bus pass and cell phone cost.
  - danielrhodes 11y ago
    Yeah admittedly that judgement largely depends on where you live and the cost base. In my opinion, that wouldn't buy you much in SF or NY. For somebody located outside of a city, it could have a much bigger impact.
eximius 11y ago
What happens when automation displaces a sufficient portion of the unskilled workforce that their value is less than 'minimum wage'? In an increasingly technical and automated society, what do we do about those who cannot adapt or become skilled enough to work in the increasingly technical workspace? We can either manufacture menial, useless jobs or admit to ourselves that HAVING to work is not necessary. We NEED to begin exploring Universal Basic Income to learn how to accommodate this in the future. It's either that or we let those who can't join the workforce suffer. I don't know that we're there yet, but we will someday. Sooner than we think.
- blazespin 11y ago
  we already are exploring it in the form of food stamps, tax credits, guaranteed student loans, etc. I agree, we should be pushing more though.
mbfg 11y ago
I'm all for raising the minimum wage, temporarily it may help people for several years. The truth is the automation wave is coming quickly regardless of what people are paid. And it's not for just minimum wage jobs. Think about jobs like truck driver where there's probably several million people who count this as their profession in the US. In 10-20 years, that number will probably approach 0. There's a nasty new world order coming where a vast majority of jobs will be gone. There will be super wealthy 'robot owners' and peasant/slaves, and probably first in america. The only hope is that the government completely changes the entire society through 'more than' basic income. Of course we know that won't happen. It is high unlikely that even a subsistent basic income will be put in place. The government is run by the super-rich, and really only does what ever it takes to protect their interests. Hopefully my life span doesn't range long enough that i feel the devastating impact of these changes, but i fear the timespan where this occurs is so accelerating that it will be here in force way before we estimate it today. 30 years? I can see it being here in 30 years. Even if you have a job that is 'automation-proof' or 'automation-resistent' but not an elite, your income will be paltry compared to the super rich class, and thus you will be relegated to the masses. Yeah, I know, i sound hysterical. Hopefully i am. I doubt it.
- crdoconnor 11y ago
  >There's a nasty new world order coming where a vast majority of jobs will be gone. If anything is going to cause this dystopian future to happen it'll be trade deals like TTIP and TPP not magical androids. >Even if you have a job that is 'automation-proof' or 'automation-resistent' but not an elite, your income will be paltry compared to the super rich class Americans have fought (and won) against robber barons before and they will do again. This kind of shift in wealth is a cyclical thing that happens with or without jetsons-style robot maids.
  - yummyfajitas 11y ago
    How do TPP and other trade deals which allow Chinese people to compete economically with Americans destroy jobs? I'm assuming, of course, that Chinese are people too.(I've never been there but I've met a few of them. They didn't seem that different from me.) Out of curiosity, did ending Jim Crow (allowing blacks to compete economically with whites) also destroy jobs? Can we create prosperity by making up arbitrary divisions and then imposing internal trade barriers?
guelo 11y ago
FYI, large minimum wage increases in the San Francisco Bay Area in the last few years have been accompanied by drops in unemployment.
- soared 11y ago
  link?
- white-flame 11y ago
  Has the size of the minimum wage worker pool decreased as well? That area is pushing out the non-high-income.
- jbuzbee 11y ago
  But of course, San Francisco is hardly a good representative of the state. What happens when the Dairy Queen in Fresno is required to pay the local teenagers $15 an hour, or around $30K a year, to sell ice-cream cones? My guess is that there's going to be one less Dairy Queen in California and those teenagers will be out of a job.
Animats 11y ago
Robotic fast food restaurants have been built. Check out AMFare, from American Machine and Foundry, deployed in 1964.[1][2] Automatically produced a range of meals (burgers, hot dogs, chicken, fries, shakes) comparable to most of McDonalds' business. This worked, and served real customers for a year, but was never deployed beyond one test location. Apparently it wasn't cost-effective. AMF returned to their more successful product, automated bowling alleys, which they still make and operate. There's a startup trying to do a burger machine now.[3] Typical pretty web site, no installations. Last updated in 2014. McDonalds deployed a robotic kitchen in Phoenix AZ last year, and it hasn't been heard from since.[4] Looking at the trade magazine of fast food, QSR (https://www.qsrmagazine.com https://www.qsrmagazine.com), there's not much talk about kitchen automation. Even when they discuss a higher minimum wage, they barely mention automation[5] Most of the newer systems look less effective than the AMF system from 1964. What's happened instead is movement of more processing upstream. The AMF system took in potatoes and bulk ground beef to make french fries and hamburger patties. Today, french fries are cut in a big plant elsewhere, and patties are pre-formed and shipped refrigerated. A fast food operation today is a final assembly plant. One idea that did not catch on was automating fast food managers out of a job. Hyperactive Bob [6] is a system from a decade ago which watched images of customers lined up and lines at the drive-through, then decided how much food should be cooked ahead of orders. (That's the definition of fast food in the industry - is food cooked for inventory?) The company is still in business, but they mostly sell outdoor displays for drive-throughs. So robots are not a threat to restaurant employment in the near term. Maybe 10 years out, but not yet. [1] http://archives.chicagotribune.com/1964/05/28/page/81/article/a-m-f-automates-drive-in-chef http://archives.chicagotribune.com/1964/05/28/page/81/articl... [2] https://www.youtube.com/watch?v=FmXLqImT1wE https://www.youtube.com/watch?v=FmXLqImT1wE [3] http://momentummachines.com/ http://momentummachines.com/ [4] http://newsexaminer.net/food/mcdonalds-to-open-restaurant-run-by-robots/ http://newsexaminer.net/food/mcdonalds-to-open-restaurant-ru... [5] https://www.qsrmagazine.com/outside-insights/ten-tips-survive-minimum-wage-increases https://www.qsrmagazine.com/outside-insights/ten-tips-surviv... [6] http://www.post-gazette.com/business/tech-news/2006/06/16/Fast-food-assistant-Hyperactive-Bob-example-of-robots-growing-role/stories/200606160187 http://www.post-gazette.com/business/tech-news/2006/06/16/Fa...
- _delirium 11y ago
RivieraKid 11y ago
Automation will change the job market structure, i.e. what jobs and wages are available, which will have two major effects: 1. Change in income distribution and therefore inequality (not necessarily for the worse, but it seems likely). People often say that automation will result in unemployment, but that's only true if the minimum wage is fairly high. The real danger is rising income inequality. 2. Change of the fraction of GDP that goes to labour (as opposed to capital). Again, seems like it will be a change for the worse. The share of labour has been slowly decreasing for some time.
shkkmo 11y ago
Anyone claiming to definitively know the results of increasing minimum wage is talking out their ass. The economic effects of minimum wage increases are complicated and situation dependent. I think the people making 'back of the envelope' economic' here are being intellectually irresponsible. I personally think that the minimum wage is a bad solution to the problem of providing a minimum income to our citizens. By requiring people to hold a job to receive an minimum income, we create a glut of 'un-skilled' workers and we drive the price of that 'un-skilled' work down to the price floor created by the minimum wage. This means that jobs people don't want to do aren't being automated because there is so much cheap labor. By creating a minimum wage price floor, we also eliminate the ability to offer jobs that don't produce enough capture-able value. (E.G. investigative journalism or child-care for low income workers). This means we are forced to automate jobs that people do want to do, but that are unfeasible due to the minimum wage price floor. By gradually switching from a minimum wage to a minimum income, we can fix the current inefficiencies in the job market while solving the same problem.
fizixer 11y ago
My response, as a minimum-wage hike supporter, to those CEOs who say "if you raise minimum wage, we'll automate": "Good! get off your lazy ass and make some technological progress!" That also means we should raise minimum-wage more often.
- rwjwjuwjudf 11y ago
  Yes, if humans are only being used in place of machines because human labor is cheaper, then we should make human labor more expensive.
karmacondon 11y ago
I think the fundamental purpose of a business is to accomplish a task, not to employ people. For example, I don't care how many people are employed to keep hackernews running. I'm thankful for their efforts, but I don't care if it's one person, ten people, or one bot. Or how much any of them get paid. The only thing that consumers and businesses care about is the end result. If a job can be done by a machine, that's fine. People will find new forms of employment. Or they won't. But we can't expect businesses or consumers to misallocate their resources for the sake of someone's job. Fortunately, fully automating the process of driving or running a restaurant is decades away. We have time to implement a basic income. Or just come up with more ways to employ people. The number of available jobs is limited only by imagination. "Instagram Photo Producer", "Online Forum Discussion Facilitator", "3D Printed Object Finisher". Someone can pay someone else to do any given thing, and now that's an occupation. "Potential Job Titles" isn't a finite list, and we can't ever run out of them.
- x5n1 11y ago
  Full employment is one of the fundamental macroeconomic objectives. So yes as governments you do expect exactly that. You also expect to reduce disparity between the rich and poor. Why? Because you don't want people to revolt and create chaos. If unemployment goes up too much and there are no jobs, people will revolt and violence will occur... in which people will probably destroy your peaceful stable life... your factory... and your government. So yes the government has to as its objectives solve these issues. If they don't then people have the right to get rid of such a government, and take all your wealth and means of production.
  - drodgers 11y ago
    The government could achieve full-employment by drafting everyone or paying them to dig ditches then fill them in again, but that would be really wasteful. If there's actually nothing useful for some people to do (they can't find a job that supports them) then we should stop thinking of employment as a requirement for survival. If the economy can't find full-time roles for some people, then we as a society — though the state — can just give them money to survive (a 'basic income') and let them do whatever they want with their time (including working part time jobs that wouldn't be able to sustain them on their own). It would be a much more productive and enjoyable use of their time than digging ditches :p
blazespin 11y ago
Good article, but he neglected to mention that it makes way for guaranteed minimum incomes.
JulianMorrison 11y ago
I don't want employment, and hell no I definitely don't want full employment, just the opposite. I want us as a species to transition to a leisure society with the ick automated away, and the only jobs humans do being ones humans would love to do for the sheer fun of it. Because a minimum wage has a loophole for "not employed at all", it isn't good enough. A Basic Income has no such loophole, and will allow poor people to reject awful jobs, forcing them to be automated.
- djrogers 11y ago
  I'm curious about this. In your ideal above, how would one go about pursuing their dreams without an ability to earn excess capital through labor? For example, my goal is to have a nice house on 50-100 acres. I also really enjoy jet skiing and boating with my family - especially from a nice lakefront rental with a private dock. I can't fathom how I would pursue those goals in a 'leisure society'... Or as a prole would I be expected to just accept my assigned housing, only use public transportation, and put my name in an annual lottery for one of the state run vacation compounds?
  - JulianMorrison 11y ago
    An approach I've considered is, that the living allocation by default is just comfortable. You'd be able to get allocated a city apartment or a rural house. But this is coupled to a delegation based "liquid" direct world democracy where you can either direct your surplus yourself, or delegate it to someone (or some organization). And recursively they can delegate it too. So suppose you were Elon Musk and you said, I want to build a colony on Mars, you'd probably be able to draw the interest of large delegating entities who would grant resource priority to the program so it could make rockets, and other entities would have projects that needed launching, and so forth. Or compare a smaller project, if you were a marine biologist and you wanted to equip a boat and go study penguins, there would be some delegating entity that would care about penguins, and you'd get your boat. Perhaps even if you just wanted a particularly beautiful house, you'd be able to draw enough aesthetes to your cause. But if you were just a jerk who wanted a mansion, well, probably not. [Edit: for clarity, you could conceptualize this system as something like crowdfunding, except global, recursively delegated, and directing resources directly instead of money.]
Evolved 11y ago
It seems like with regards to restaurants, this would only mostly apply to fast-food restaurants. Raising the minimum wage doesn't really appear to have an effect on servers given that the majority of their pay is from tips and they are effectively legally paid less than minimum wage anyway. Furthermore, it isn't supposed to be a living wage. You're not supposed to be a single mother of 3 supporting yourself working at McDonald's. The minimum wage is supposed to be for those new to the work force and then you're supposed to better yourself and get a higher wage job. Where's the incentive to invest in yourself to earn more if you're making $15/hr for menial work?
- mbfg 11y ago
  So your thinking is that people will start making $15/hr and say to themselves, wow, i'm living in paradise! Really?
- JoeAltmaier 11y ago
  That is an old dead horse. What job folks are 'supposed' to have according to middle-class morality is irrelevant. Today only about one minimum-wage worker in 10 are teens. A third are over 35. They haven't had a raise in 7 years. We're talking 25 million people who can't pay basic bills. And we're not going to make them into 25 million more engineers or programmers or anything else really. There aren't enough jobs in the entire rest of the economy for these folks to fill. It isn't going to get better by itself. Now Carl's wants to automate the counter. Banks are automating, expected to reduce head count by 30%. These things happen across the industry, those folks aren't earning minimum wage, they're out of a job.
- unprepare 11y ago
  >Where's the incentive to invest in yourself to earn more if you're making $15/hr for menial work? What made you go from 30k to 50k to 75k to 100k to 150k?
partycoder 11y ago
Before computerized elevators, there were manually operated elevators. Before automatic telephone switchboards there were manually operated telephone switchboards... Those things were relatively modern. Future people will say: before automated kitchens there were manually operated kitchens, before automated cleaners there were janitors, before self-driving cars there were manual cars... and so on. The domain of tasks that can only be done reliably by humans is shrinking. Humans are being pushed to do more complex things. But that doesn't scale infinitely. Robots eventually will be able to do better.
- mbfg 11y ago
  Agreed. It's interesting that this thread is almost entirely about low wage earners. Truck drivers were added to the conversation, but the truth is it's not about low wage earning, but about rote working. In 10-20 years, i'd expect The job of accountant being pretty much wiped off the map for humans. Turbo Tax, et. al, was a nascent first step. Doctors, Nurses, Hospital Administrators, Staff will be significantly pared down, and given much more commoner positions, as I can go down to Walgreens, sit in the gene therapy booth and cure my own cancer, hiv, leukemia, als, etc. etc. Perhaps Baby docs will survive the longest... that's kind of icky even for a robot. Dentists? Higentists? I'd expect in that period of time, we will be able to regrow teeth beyond the first set of adult teeth... so, really what's the point of your job function. Middle Management? Various surveys suggest people actually would prefer to report to a computer, rather than a human, and really, will it be that hard to believe that middle management can't be done via robot? That's a good number of people without jobs. Bus/Train/Plane Drivers, gone soon as well. Almost all manufacturing jobs will be gone. As automated surveillance reaches its crescendo, surely police forces can be significantly trimmed, even without the introduction of robocop. And on and on... If you want a job in the near future, start planning for one that is highly chaotic. But with everyone fighting for those jobs, don't expect much in pay.
  - partycoder 11y ago
    Well the truck driver's work is not only to drive. Also to do maintenance on the truck, inventory and such. How do you change a flat tire on a self driving truck? You will still need some alternative. That alternative can be automated, sure... but it's a problem yet to be solved.
deleted 11y ago
[deleted]
toomanythings2 11y ago
I own several franchised fast food restaurants. This article ignores several key points. Robots are expensive and would need to be custom made for each restaurant to replace humans. Also, there would be missing the human touch, making a restaurant visit cold and automated. No more "service" and personal touches. You get what you get. The immediate issue is, who pays for the increased labor cost? You do. And, no, it won't just add a dime to your bill. My labor cost has gone up 150% since I started in this 30 years ago as an investment. All my material costs are also up at least that same amount. The unit cost to you of one of our products was $4 back then. Today it is $8. I now feel I hire better people but I hire fewer of those people and, currently, won't hire teenagers cause they're unreliable but the quality of person I need to run with this light crew is hard to find, more due to the stigma of working fast food than the actual pay (though that's part of it). The customer is price sensitive. The customer likes the human touch. If restaurants go robotic, the most popular restaurants will be those without one, and while the idea of raising pay to $15/hour is great, someone has to pay for that, and that someone is you.
- mbfg 11y ago
  This is a very sane point of course, and you are right that the consumer, and perhaps the low wage earner (in cases of the McDonald's type restaurants) now loses his extra wage to extra meal costs, so it is self defeating. The problem though is that your costs are not driven up just by wage costs, but by many other things that are not helping the low wage earner. So the self defeating part of the "rising cost past to the consumer" is only a fraction of what makes life miserable for those who are at the bottom. Increasing there pay directly helps them 100%. And so it is still a net win.
  - toomanythings2 11y ago
    Those "other things" mean the cost of food, paper, cleaning supplies, etc. that make a restaurant run. Those same materials are made by low wage earners who, if given $15/hour, will drive up the cost of the supplies I use, thus increasing my operating costs.
galfarragem 11y ago
Risking to be simplist, the political dialectic will be soon resumed to: the right to be supported by society VS the right to work for society

125 points by frostmatthew 11y ago

EdSharkey 11y ago

stagflation

WalterSear 11y ago
We are going to get both - mass redundancy on top of stagflation - reporter cum arm-chair economists notwithstanding.
pessimizer 11y ago
Negative interest rates.

oconnore 11y ago

Here is the critical section of the article: > What about the workers thrown out of jobs by the new robo-waiters? Many would get new jobs, though the way this would work is often ignored. > Most restaurants would keep longer hours (they're paying for the rent and the robots anyway), meaning many workers would get a raise and change shifts. No, the workers are now fired. They don't get a raise. > The advanced robo-restaurant technology would itself be a valuable American export good, and people would be employed in designing and selling it. Yes, but not the people we just fired. > Some low-wage work would be reallocated out of the relatively low-social-value restaurant sector and into things like child care and home health assistance, for which there is ample demand. If there is ample demand for such things, and those things pay better, and typical restaurant workers are qualified, then we should already see a mass exodus from restaurant work. We don't. Thus one of these things isn't true. > Since poor people are now making more money... You have not given any evidence to support this.

HillaryBriss 11y ago
> The advanced robo-restaurant technology would itself be a valuable American export good ... Yeah. I don't know about this one either. Why do I get the feeling America will be buying a really large fraction of those robots from overseas?
bradleyprice 11y ago
This was my thought as well. I'm not even sure how to judge this article. It seems very misinformed with making assumptions without any supporting evidence on how we get there. It's true that automation would bring in new jobs, but not the jobs that the people affected would be able to jump into. As far as the whole child care and home health jobs go, I'm not sure there would be a mass influx of opportunities there. I don't know if I've ever personally seen employees at a daycare making much more than minimum wage and there's already a thin margin with daycares. So, I'd think they'd be in same trouble as a restaurant employee.
- protomyth 11y ago
  Daycare is a hard industry to pay decent wages since it's basically a replacement for an adult to stay home and the child to staff ratio is a factor (infants were 3 to 1 staff). Also, about 1/2 the population (males) are heavily discriminated against (85+% women). I did budgets for a group of daycares serving 45 families in the 90's and we did not pay well even for ND.
curiousgeorgio 11y ago
> Some low-wage work would be reallocated ... Since poor people are now making more money, there will be opportunities to sell them things — things like restaurant meals! — that they couldn't previously afford, which in turn creates demand for new jobs. Even if the poor people were making more money, the rest of the logic here is equally as flawed; somehow by firing people and replacing them with machines, those people will spend more money, and that will create the same jobs for which they were replaced by machines. Kind of a new twist on circular logic where each point in the circle is also a logical fallacy.
cornholio 11y ago
You are essentially making the luddite case. The counterargument usually goes like this: yes, people would be fired and there will be serious pain in the short run; however the machines will drastically improve productivity, therefore reduce prices, so real wages will go up along with demand and the extra income not spent on, say, buying feed stock for your horse, will go in creating other jobs and economic sectors that will make use of the available labor. The government can and should ease the transition by offering skill-training and incentives. While economically sound, I'm skeptical this process can go on forever. The human biology and mind is clearly limited, while the progress of machines does not seem to be. So eventually you will hit a fundamental limit where larger and larger chunks of the workforce will simply be too old, uneducated or simply too human to keep up. How close we are to this fundamental limit it's anyone's guess, but I would venture to say we are closer than most think. At the point where a serious part of the population is unable to participate in the labor market, this ceases to be an appropriate system to distribute the fruits of economic activity and some form of basic income is required to maintain social order.
- deegles 11y ago
  I read somewhere that the amount of people employed in the transportation industry is roughly equal to the tech industry. If 75% or more become redundant, where will they go? Certainly not the restaurant industry... One theory I have about all of the coding "boot camps" popping up is that they are preparing for an exodus of people from the next job sector to be automated/eliminated (auto-lated?).
  - protomyth 11y ago
    If you look at the most popular job in each state, you will find truck driving is either #1 or pretty high on the list.
    - greeneggs 11y ago
      Citation: http://www.npr.org/sections/money/2015/02/05/382664837/map-the-most-common-job-in-every-state http://www.npr.org/sections/money/2015/02/05/382664837/map-t... The prevalence of secretaries from 1984-1988 is interesting, too.
fleitz 11y ago
In 1900 there were 1.6 billion people, and we had a lot less technology, with many people living in poverty. In 2016, there are 7 billion people, we have a lot less technology, only about 1 billion still live in poverty. If technology 'killed' jobs we shouldn't have more than about 400 million people employed in the world.
mangeletti 11y ago
I hereby give you an honorary 1000 karma. Reading this article disgusted me. I'm not a "republican" or "democrat", or anything else for that matter, but I have some intelligence and sense. Arguing that raising minimum wage will some how lead to more prosperity is the same thing as stating "people with minimum wage jobs currently have prosperity". The minimum is the minimum, no matter how high we raise it. The only thing raising the minimum wage does is punish people like my little brother who worked so hard to get to $14/hr. If minimum wage is raised to $15, he will earn minimum wage again. This means the buying power he has earned over the past 3 years will be lost to those who should be starting where he started 3 years ago. If you don't understand the difference between that and prosperity, then you're an idiot. That's not an ad hominem attack. That's meant in the literal sense.
- dragonwriter 11y ago
  Minimum wage increases, experience has shown, put upward pressure on wages generally. It is not the case that everyone making between the old minimum wage and the new minimum wage ends up at the new minimum after the change.
  - SEJeff 11y ago
    Source? I'd like to read up on that.
  - clarkmoody 11y ago
    Let's continue your thought: If minimum wage increases put upward pressure on wages generally, then what happens? Higher wage levels in general means more money in people's pockets, and this can turn into general price inflation (especially since business costs have risen due to the general level of wages going up). So let's assume you now have inflation. This means everything just got more expensive, so now that new higher wage level buys you less and less. And now the people who are completely out of work and can't command the minimum wage for their skills/labor are even farther behind.
    - petra 11y ago
blazespin 11y ago
Yes, people will be fired. Yes, that is fine. Yes, we need a minimum guaranteed income as a result of increased automation. Ideally, you'd get the income for going to school and learning.
sharkjacobs 11y ago
remember a hundred years ago, when 90% of Americans were employed in agriculture? Remember when tractors were invented, and now only 2% of americans work in agriculture? Yeah, it sucks that 88% of americans are unemployed now.
- refurb 11y ago
  I was thinking the same thing. Just replace whatever job people are saying will be automated with {horse shoe maker, blacksmith,farmer} and you'd swear the current discussion was taking place in the 1900's.

melling 11y ago

How did someone come to this conclusion? "Right now the retirement age is rising from 65 to 67, and most people think it will have to go up to 70. If robots can do a lot of the work instead, we could put it back down to 65 or even to 62 while still growing the economy. " Robots are going to pay the social security tax.

unclebucknasty 11y ago
>How did someone come to this conclusion? With much tortured logic and wishful thinking. Not only will the robots cover social security, they'll also cut the lawns of poor people and keep their mint julep glasses filled.
HillaryBriss 11y ago
Assuming everything else stays the same, if a swarm of robots enters the economy and starts doing a shit-ton of everyone's work at a tiny cost, then productivity skyrockets and we all start collecting unlimited social security checks starting at age 62. But everything else won't stay the same. Consumers will start to demand more from the businesses and governments that use these robots. Businesses that don't get more robots -- or more expensive robots -- will be left behind. Pretty soon the productivity miracle disappears and we all have to work until we're 70, just like before.
djrogers 11y ago
I honestly couldn't figure this one out either... Although now that I think about it, I wouldn't put it past some politicians to come up with a plan to tax businesses for automation as a way to counter the SS shortfall. Kinda like taxing miles driven now that cars are so efficient the gas taxes don't work anymore.
kuschku 11y ago
> Robots are going to pay the social security tax. Those robots are owned by business owners like half of the people commenting in this thread, and, like the comments already show, they’ll push for 0 taxes on their robots. They’d rather have people die than to increase the costs of their products by a few dollar.
11y ago

davidiach 11y ago

Thought experiment. If the government will start forcing your employer to pay you, lets say 70% more than you currently make beginning next month (if they want to keep you), would you be worried about losing your job? Oh, and let's not forget, nobody else will be allowed to hire you from that point on if they don't pay you at least that amount that your current employer will be forced to pay you from now on.

redmorphium 11y ago
If I were replaceable by automation, I would be.
notatoad 11y ago
And the other thought experiment: you're currently making 70% more than somebody who holds significantly less responsibility than you do, and has significantly less skill than you. If the salary their position pays is increased to match your salary, what are you going to do?

wrong_variable 11y ago

A hike in the cost of labour was the reason why the industrial revolution happened in Britain vs India. Even today, the cost of labour is so little in India that there is no need to innovate in robotics,AI etc. To me the question should be framed as - do we want minimum wage workers to be slaves ? This is essentially the argument being made. If robots are actually cheaper then why haven't they being deployed yet ? Having done research in robotics when I was younger - there are more productive use of roboticist's time then to go after minimum wage service workers. Its non-trivial to exchange a waiter with a robot, and we already have "ready made" food - so why do people still go restaurant ? The only thing a hike in minimum wage is going to do is cut into the profits of restaurant owners, landlords and big chain corporations.

GFK_of_xmaspast 11y ago
> A hike in the cost of labour was the reason why the industrial revolution happened in Britain vs India There was also the forced de-industrialization of one of those nations by the other one.
erichocean 11y ago
> If robots are actually cheaper then why haven't they being deployed yet? Easy: because software is hard.

unclebucknasty 11y ago

The article makes a number of arguments as if stating accepted facts, when much of it doesn't even logically follow. >Some low-wage work would be reallocated out of the relatively low-social-value restaurant sector and into things like child care and home health assistance, for which there is ample demand. If this is true, then what is preventing it from happening now? >we are able to produce everything we need with less labor, we can afford to let people work less. The tired old utopia argument. Robots will do everything while we all sun on the beach. Firstly, this ignores the fact that people spend their time working because they need money, not because there is work to be done. Secondly, If we are making things with less labor, then there is less demand for labor and, thus, lower wages. Yet, the producers realize higher profits. The actual result is not utopia for all, but the wealth divide that we see now. >Most restaurants would keep longer hours (they're paying for the rent and the robots anyway), meaning many workers would get a raise and change shifts. Not sure where any of the leaps of logic packed in there originate. The entire statement is completely irrational. >advanced robo-restaurant technology would itself be a valuable American export good, and people would be employed in designing and selling it Complete sleight of hand. We're talking about the effect on low wage workers, not highly skilled robotics designers and sales engineers. The people who are displaced are very unlikely to gain employment designing the robots that are replacing them.

TheSpiceIsLife 11y ago

> Even better, to the extent that we are able to produce everything we need with less labor, we can afford to let people work less. I'm doubtful. From what I've seen it just means that those who do have full time jobs are expected to work more. Why employ two people for 20 hours a week when you can have one person for 40hrs a week? For most industries the managerial and administrative overheads are less with fewer staff who work longer hours. > but has not really succeeded in shedding much light on where innovation comes from or what policies support it. Deirdre N. McCloskey might have something to say about that in her tomb 'Bourgeois Dignity: Why Economics Can't Explain the Modern World'[1][2]. tl;dr her argument is that the ability to bring innovation to market, profit, and be dignified in doing so is the factor that brought about the modern world. And besides, we only have to look at other developed nations with liveable minimum wages to see that it hasn't caused an automation revolution. Where I live, Australia, has an adult minimum full-time wage of $17.29[3] and has an unemployment rate of 5.8%[4] (for some definitions of 'unemployed'). A liveable minimum wage isn't going to cause an automation revolution. The Automation Revolution is going to be what causes the automation revolution, and for that to happen we're going to need cheap general purpose robots trickling in to the second hand market. When a business can buy a general purpose robot for less than 5x the annual salary of a full-time employee, and it can learn new skills as easily as a human, we'll be close. It's looking like that's a way off yet. 1. http://www.deirdremccloskey.com/ http://www.deirdremccloskey.com/ 2. https://en.wikipedia.org/wiki/Deirdre_McCloskey https://en.wikipedia.org/wiki/Deirdre_McCloskey 3. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/minimum-wages#current-national-minimum-wage https://www.fairwork.gov.au/how-we-will-help/templates-and-g... 4. http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0 http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0

hardcandy 11y ago
Australia is being fueled by huge external stimulus from China, which won't last forever. It's not the best example to use. Some of the mature European democracies provide much more useful data.
- TheSpiceIsLife 11y ago

Pyxl101 11y ago

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages at current profitability levels. Seattle's minimum wage for example has caused a massive loss of jobs compared to the rest of the state: https://www.aei.org/publication/minimum-wage-effect-from-jan-to-sept-seattle-msa-restaurant-jobs-fell-700-vs-5800-food-jobs-in-rest-of-state/ https://www.aei.org/publication/minimum-wage-effect-from-jan... Minimum wage directly causes unemployment by making it illegal to employ people at their fair market wage. [Edit: I'd be glad to read an argument for minimum wage if someone would like to link one. The articles that I see in the news tend to engage in moralizing and lack real explanation and justification.]

Retra 11y ago
The "good argument" for having a minimum wage is that without it, wages will be pressured down, because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity. Besides, you're just assuming people should be employed at "fair market wage." The political process is part of the market, and the fair market wage is determined by what is politically determined to be fair (AKA, minimum wage) just as much as it is by employers' demands. As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare.
- fche 11y ago
  "As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare." That's funny, but true. You know what else is at least as true? No people are entitled to employment, especially at a loss to the business.

xorgar831 11y ago

It's amazing how pushing technical boundaries is seen as worthy challenge, but helping the those who are struggling with basic needs is seen as impossible and an irritating overstep by the government.

alkonaut 11y ago

Minimum wage hikes are tough pills to swallow, but they are a reaction to lack of wage increases over time. If the lowest wages had followed the s&p or management comp. over the last decades then this would be a non-issue. Weak labor/low organization and the fact that many bought the myth of "trickle down economics" has kept the lowest wages where the 1% wants them. As for automation: if there are gains from automation they are likely there already. I Mercedes builds cars much differently in the US compared to Germany despite big differences in labor costs. One difference that is immediately noticeable with high labor costs is not in industry but in services 1) more self-service such as self checkout at grocery store, self-checkin at airport 2) no non-essential services such as greeters, bag-packers, 3) DIY is common

nxzero 11y ago

Automation unless the becomes the norm will never complete replace humans. For example, number of places allow you to place an order via an app, but customer with the awareness and ability to do so will just stand in line waiting. Plentiful amount of additional explains, but the point is customer, not business decide what they want, and customers often herd or group think.

danielrhodes 11y ago

I think what you're going to see with any minimum wage hike is that businesses who have thin margins, namely restaurants and small stores, will be forced to go out of business or be forced to degrade their quality of service. Labor costs are for any business the biggest line-item expense. Spending on "robo waiters" or what have you is a big upfront capital expenditure, and I doubt many restaurants will be able to finance it. But it's not just small establishments: even Walmart is very exposed to these wage hikes. While it appears like they have lots of money, a lot of how they do what they do is based on cheap labor. In SF, after they boosted the minimum wage, I observed a few stores go out of business. I'm all for people being paid more, but I doubt people losing their jobs altogether was the intended consequence. Another thing I observed was the price of eating out in SF rose considerably. I remember feeling shocked that for a simple lunch (certainly not a luxury), I paid over $30. Things like that hurt people on the lower end of the economic spectrum, especially since poorer people are very sensitive to food prices. The sad thing is: after taxes, if somebody is working the maximum hours they can without being a full-time employee (which very few minimum wage earners are), this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life. Perhaps I am cynical, but I don't see these wage hikes as having a net positive impact. What drives up wages is a shortage in the labor supply and businesses that need more skilled employees who they are willing to train and keep for awhile. A minimum wage hike just gives businesses more reasons not to hire people.

pm24601 11y ago
> this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life. It absolutely would have a big impact. You are talking food for a money, a monthly bus pass and cell phone cost.
- danielrhodes 11y ago
  Yeah admittedly that judgement largely depends on where you live and the cost base. In my opinion, that wouldn't buy you much in SF or NY. For somebody located outside of a city, it could have a much bigger impact.

eximius 11y ago

What happens when automation displaces a sufficient portion of the unskilled workforce that their value is less than 'minimum wage'? In an increasingly technical and automated society, what do we do about those who cannot adapt or become skilled enough to work in the increasingly technical workspace? We can either manufacture menial, useless jobs or admit to ourselves that HAVING to work is not necessary. We NEED to begin exploring Universal Basic Income to learn how to accommodate this in the future. It's either that or we let those who can't join the workforce suffer. I don't know that we're there yet, but we will someday. Sooner than we think.

blazespin 11y ago
we already are exploring it in the form of food stamps, tax credits, guaranteed student loans, etc. I agree, we should be pushing more though.

mbfg 11y ago

I'm all for raising the minimum wage, temporarily it may help people for several years. The truth is the automation wave is coming quickly regardless of what people are paid. And it's not for just minimum wage jobs. Think about jobs like truck driver where there's probably several million people who count this as their profession in the US. In 10-20 years, that number will probably approach 0. There's a nasty new world order coming where a vast majority of jobs will be gone. There will be super wealthy 'robot owners' and peasant/slaves, and probably first in america. The only hope is that the government completely changes the entire society through 'more than' basic income. Of course we know that won't happen. It is high unlikely that even a subsistent basic income will be put in place. The government is run by the super-rich, and really only does what ever it takes to protect their interests. Hopefully my life span doesn't range long enough that i feel the devastating impact of these changes, but i fear the timespan where this occurs is so accelerating that it will be here in force way before we estimate it today. 30 years? I can see it being here in 30 years. Even if you have a job that is 'automation-proof' or 'automation-resistent' but not an elite, your income will be paltry compared to the super rich class, and thus you will be relegated to the masses. Yeah, I know, i sound hysterical. Hopefully i am. I doubt it.

crdoconnor 11y ago
>There's a nasty new world order coming where a vast majority of jobs will be gone. If anything is going to cause this dystopian future to happen it'll be trade deals like TTIP and TPP not magical androids. >Even if you have a job that is 'automation-proof' or 'automation-resistent' but not an elite, your income will be paltry compared to the super rich class Americans have fought (and won) against robber barons before and they will do again. This kind of shift in wealth is a cyclical thing that happens with or without jetsons-style robot maids.
- yummyfajitas 11y ago
  How do TPP and other trade deals which allow Chinese people to compete economically with Americans destroy jobs? I'm assuming, of course, that Chinese are people too.(I've never been there but I've met a few of them. They didn't seem that different from me.) Out of curiosity, did ending Jim Crow (allowing blacks to compete economically with whites) also destroy jobs? Can we create prosperity by making up arbitrary divisions and then imposing internal trade barriers?

guelo 11y ago

FYI, large minimum wage increases in the San Francisco Bay Area in the last few years have been accompanied by drops in unemployment.

soared 11y ago
link?
white-flame 11y ago
Has the size of the minimum wage worker pool decreased as well? That area is pushing out the non-high-income.
jbuzbee 11y ago
But of course, San Francisco is hardly a good representative of the state. What happens when the Dairy Queen in Fresno is required to pay the local teenagers $15 an hour, or around $30K a year, to sell ice-cream cones? My guess is that there's going to be one less Dairy Queen in California and those teenagers will be out of a job.

Animats 11y ago

Robotic fast food restaurants have been built. Check out AMFare, from American Machine and Foundry, deployed in 1964.[1][2] Automatically produced a range of meals (burgers, hot dogs, chicken, fries, shakes) comparable to most of McDonalds' business. This worked, and served real customers for a year, but was never deployed beyond one test location. Apparently it wasn't cost-effective. AMF returned to their more successful product, automated bowling alleys, which they still make and operate. There's a startup trying to do a burger machine now.[3] Typical pretty web site, no installations. Last updated in 2014. McDonalds deployed a robotic kitchen in Phoenix AZ last year, and it hasn't been heard from since.[4] Looking at the trade magazine of fast food, QSR (https://www.qsrmagazine.com https://www.qsrmagazine.com), there's not much talk about kitchen automation. Even when they discuss a higher minimum wage, they barely mention automation[5] Most of the newer systems look less effective than the AMF system from 1964. What's happened instead is movement of more processing upstream. The AMF system took in potatoes and bulk ground beef to make french fries and hamburger patties. Today, french fries are cut in a big plant elsewhere, and patties are pre-formed and shipped refrigerated. A fast food operation today is a final assembly plant. One idea that did not catch on was automating fast food managers out of a job. Hyperactive Bob [6] is a system from a decade ago which watched images of customers lined up and lines at the drive-through, then decided how much food should be cooked ahead of orders. (That's the definition of fast food in the industry - is food cooked for inventory?) The company is still in business, but they mostly sell outdoor displays for drive-throughs. So robots are not a threat to restaurant employment in the near term. Maybe 10 years out, but not yet. [1] http://archives.chicagotribune.com/1964/05/28/page/81/article/a-m-f-automates-drive-in-chef http://archives.chicagotribune.com/1964/05/28/page/81/articl... [2] https://www.youtube.com/watch?v=FmXLqImT1wE https://www.youtube.com/watch?v=FmXLqImT1wE [3] http://momentummachines.com/ http://momentummachines.com/ [4] http://newsexaminer.net/food/mcdonalds-to-open-restaurant-run-by-robots/ http://newsexaminer.net/food/mcdonalds-to-open-restaurant-ru... [5] https://www.qsrmagazine.com/outside-insights/ten-tips-survive-minimum-wage-increases https://www.qsrmagazine.com/outside-insights/ten-tips-surviv... [6] http://www.post-gazette.com/business/tech-news/2006/06/16/Fast-food-assistant-Hyperactive-Bob-example-of-robots-growing-role/stories/200606160187 http://www.post-gazette.com/business/tech-news/2006/06/16/Fa...

_delirium 11y ago

RivieraKid 11y ago

Automation will change the job market structure, i.e. what jobs and wages are available, which will have two major effects: 1. Change in income distribution and therefore inequality (not necessarily for the worse, but it seems likely). People often say that automation will result in unemployment, but that's only true if the minimum wage is fairly high. The real danger is rising income inequality. 2. Change of the fraction of GDP that goes to labour (as opposed to capital). Again, seems like it will be a change for the worse. The share of labour has been slowly decreasing for some time.

shkkmo 11y ago

Anyone claiming to definitively know the results of increasing minimum wage is talking out their ass. The economic effects of minimum wage increases are complicated and situation dependent. I think the people making 'back of the envelope' economic' here are being intellectually irresponsible. I personally think that the minimum wage is a bad solution to the problem of providing a minimum income to our citizens. By requiring people to hold a job to receive an minimum income, we create a glut of 'un-skilled' workers and we drive the price of that 'un-skilled' work down to the price floor created by the minimum wage. This means that jobs people don't want to do aren't being automated because there is so much cheap labor. By creating a minimum wage price floor, we also eliminate the ability to offer jobs that don't produce enough capture-able value. (E.G. investigative journalism or child-care for low income workers). This means we are forced to automate jobs that people do want to do, but that are unfeasible due to the minimum wage price floor. By gradually switching from a minimum wage to a minimum income, we can fix the current inefficiencies in the job market while solving the same problem.

fizixer 11y ago

My response, as a minimum-wage hike supporter, to those CEOs who say "if you raise minimum wage, we'll automate": "Good! get off your lazy ass and make some technological progress!" That also means we should raise minimum-wage more often.

rwjwjuwjudf 11y ago
Yes, if humans are only being used in place of machines because human labor is cheaper, then we should make human labor more expensive.

karmacondon 11y ago

I think the fundamental purpose of a business is to accomplish a task, not to employ people. For example, I don't care how many people are employed to keep hackernews running. I'm thankful for their efforts, but I don't care if it's one person, ten people, or one bot. Or how much any of them get paid. The only thing that consumers and businesses care about is the end result. If a job can be done by a machine, that's fine. People will find new forms of employment. Or they won't. But we can't expect businesses or consumers to misallocate their resources for the sake of someone's job. Fortunately, fully automating the process of driving or running a restaurant is decades away. We have time to implement a basic income. Or just come up with more ways to employ people. The number of available jobs is limited only by imagination. "Instagram Photo Producer", "Online Forum Discussion Facilitator", "3D Printed Object Finisher". Someone can pay someone else to do any given thing, and now that's an occupation. "Potential Job Titles" isn't a finite list, and we can't ever run out of them.

x5n1 11y ago
Full employment is one of the fundamental macroeconomic objectives. So yes as governments you do expect exactly that. You also expect to reduce disparity between the rich and poor. Why? Because you don't want people to revolt and create chaos. If unemployment goes up too much and there are no jobs, people will revolt and violence will occur... in which people will probably destroy your peaceful stable life... your factory... and your government. So yes the government has to as its objectives solve these issues. If they don't then people have the right to get rid of such a government, and take all your wealth and means of production.
- drodgers 11y ago
  The government could achieve full-employment by drafting everyone or paying them to dig ditches then fill them in again, but that would be really wasteful. If there's actually nothing useful for some people to do (they can't find a job that supports them) then we should stop thinking of employment as a requirement for survival. If the economy can't find full-time roles for some people, then we as a society — though the state — can just give them money to survive (a 'basic income') and let them do whatever they want with their time (including working part time jobs that wouldn't be able to sustain them on their own). It would be a much more productive and enjoyable use of their time than digging ditches :p

blazespin 11y ago

Good article, but he neglected to mention that it makes way for guaranteed minimum incomes.

JulianMorrison 11y ago

I don't want employment, and hell no I definitely don't want full employment, just the opposite. I want us as a species to transition to a leisure society with the ick automated away, and the only jobs humans do being ones humans would love to do for the sheer fun of it. Because a minimum wage has a loophole for "not employed at all", it isn't good enough. A Basic Income has no such loophole, and will allow poor people to reject awful jobs, forcing them to be automated.

djrogers 11y ago
I'm curious about this. In your ideal above, how would one go about pursuing their dreams without an ability to earn excess capital through labor? For example, my goal is to have a nice house on 50-100 acres. I also really enjoy jet skiing and boating with my family - especially from a nice lakefront rental with a private dock. I can't fathom how I would pursue those goals in a 'leisure society'... Or as a prole would I be expected to just accept my assigned housing, only use public transportation, and put my name in an annual lottery for one of the state run vacation compounds?
- JulianMorrison 11y ago
  An approach I've considered is, that the living allocation by default is just comfortable. You'd be able to get allocated a city apartment or a rural house. But this is coupled to a delegation based "liquid" direct world democracy where you can either direct your surplus yourself, or delegate it to someone (or some organization). And recursively they can delegate it too. So suppose you were Elon Musk and you said, I want to build a colony on Mars, you'd probably be able to draw the interest of large delegating entities who would grant resource priority to the program so it could make rockets, and other entities would have projects that needed launching, and so forth. Or compare a smaller project, if you were a marine biologist and you wanted to equip a boat and go study penguins, there would be some delegating entity that would care about penguins, and you'd get your boat. Perhaps even if you just wanted a particularly beautiful house, you'd be able to draw enough aesthetes to your cause. But if you were just a jerk who wanted a mansion, well, probably not. [Edit: for clarity, you could conceptualize this system as something like crowdfunding, except global, recursively delegated, and directing resources directly instead of money.]

Evolved 11y ago

It seems like with regards to restaurants, this would only mostly apply to fast-food restaurants. Raising the minimum wage doesn't really appear to have an effect on servers given that the majority of their pay is from tips and they are effectively legally paid less than minimum wage anyway. Furthermore, it isn't supposed to be a living wage. You're not supposed to be a single mother of 3 supporting yourself working at McDonald's. The minimum wage is supposed to be for those new to the work force and then you're supposed to better yourself and get a higher wage job. Where's the incentive to invest in yourself to earn more if you're making $15/hr for menial work?

mbfg 11y ago
So your thinking is that people will start making $15/hr and say to themselves, wow, i'm living in paradise! Really?
JoeAltmaier 11y ago
That is an old dead horse. What job folks are 'supposed' to have according to middle-class morality is irrelevant. Today only about one minimum-wage worker in 10 are teens. A third are over 35. They haven't had a raise in 7 years. We're talking 25 million people who can't pay basic bills. And we're not going to make them into 25 million more engineers or programmers or anything else really. There aren't enough jobs in the entire rest of the economy for these folks to fill. It isn't going to get better by itself. Now Carl's wants to automate the counter. Banks are automating, expected to reduce head count by 30%. These things happen across the industry, those folks aren't earning minimum wage, they're out of a job.
unprepare 11y ago
>Where's the incentive to invest in yourself to earn more if you're making $15/hr for menial work? What made you go from 30k to 50k to 75k to 100k to 150k?

partycoder 11y ago

Before computerized elevators, there were manually operated elevators. Before automatic telephone switchboards there were manually operated telephone switchboards... Those things were relatively modern. Future people will say: before automated kitchens there were manually operated kitchens, before automated cleaners there were janitors, before self-driving cars there were manual cars... and so on. The domain of tasks that can only be done reliably by humans is shrinking. Humans are being pushed to do more complex things. But that doesn't scale infinitely. Robots eventually will be able to do better.

mbfg 11y ago
Agreed. It's interesting that this thread is almost entirely about low wage earners. Truck drivers were added to the conversation, but the truth is it's not about low wage earning, but about rote working. In 10-20 years, i'd expect The job of accountant being pretty much wiped off the map for humans. Turbo Tax, et. al, was a nascent first step. Doctors, Nurses, Hospital Administrators, Staff will be significantly pared down, and given much more commoner positions, as I can go down to Walgreens, sit in the gene therapy booth and cure my own cancer, hiv, leukemia, als, etc. etc. Perhaps Baby docs will survive the longest... that's kind of icky even for a robot. Dentists? Higentists? I'd expect in that period of time, we will be able to regrow teeth beyond the first set of adult teeth... so, really what's the point of your job function. Middle Management? Various surveys suggest people actually would prefer to report to a computer, rather than a human, and really, will it be that hard to believe that middle management can't be done via robot? That's a good number of people without jobs. Bus/Train/Plane Drivers, gone soon as well. Almost all manufacturing jobs will be gone. As automated surveillance reaches its crescendo, surely police forces can be significantly trimmed, even without the introduction of robocop. And on and on... If you want a job in the near future, start planning for one that is highly chaotic. But with everyone fighting for those jobs, don't expect much in pay.
- partycoder 11y ago
  Well the truck driver's work is not only to drive. Also to do maintenance on the truck, inventory and such. How do you change a flat tire on a self driving truck? You will still need some alternative. That alternative can be automated, sure... but it's a problem yet to be solved.

deleted 11y ago

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toomanythings2 11y ago

I own several franchised fast food restaurants. This article ignores several key points. Robots are expensive and would need to be custom made for each restaurant to replace humans. Also, there would be missing the human touch, making a restaurant visit cold and automated. No more "service" and personal touches. You get what you get. The immediate issue is, who pays for the increased labor cost? You do. And, no, it won't just add a dime to your bill. My labor cost has gone up 150% since I started in this 30 years ago as an investment. All my material costs are also up at least that same amount. The unit cost to you of one of our products was $4 back then. Today it is $8. I now feel I hire better people but I hire fewer of those people and, currently, won't hire teenagers cause they're unreliable but the quality of person I need to run with this light crew is hard to find, more due to the stigma of working fast food than the actual pay (though that's part of it). The customer is price sensitive. The customer likes the human touch. If restaurants go robotic, the most popular restaurants will be those without one, and while the idea of raising pay to $15/hour is great, someone has to pay for that, and that someone is you.

mbfg 11y ago
This is a very sane point of course, and you are right that the consumer, and perhaps the low wage earner (in cases of the McDonald's type restaurants) now loses his extra wage to extra meal costs, so it is self defeating. The problem though is that your costs are not driven up just by wage costs, but by many other things that are not helping the low wage earner. So the self defeating part of the "rising cost past to the consumer" is only a fraction of what makes life miserable for those who are at the bottom. Increasing there pay directly helps them 100%. And so it is still a net win.
- toomanythings2 11y ago
  Those "other things" mean the cost of food, paper, cleaning supplies, etc. that make a restaurant run. Those same materials are made by low wage earners who, if given $15/hour, will drive up the cost of the supplies I use, thus increasing my operating costs.

galfarragem 11y ago

Risking to be simplist, the political dialectic will be soon resumed to: the right to be supported by society VS the right to work for society