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this was going to happen anyway As pointed out by other comments here, this is not happening as much in Asia where labor and regulatory costs are lower. The pa

by jbuzbee 10y ago

this was going to happen anyway As pointed out by other comments here, this is not happening as much in Asia where labor and regulatory costs are lower. The parent comment has a valid point. It's a balance. Higher labor and regulatory costs tilt the scales toward automation.

CaptSpify 10y ago
> this is not happening as much in Asia where labor and regulatory costs are lower. Yet It's still going to happen, it just isn't happening as fast. Even if you are paying a person $2 a day, a machine that costs $1 a day, and doesn't need breaks is cheaper.
- gwright 10y ago
  This is true but not very interesting observation. Machines and humans are not 100% substitutable. There are tradeoffs and cost is just one of those tradeoffs. Humans, for example, are pretty good at improvising when something goes wrong, not so much for machines. When regulatory policies (including minimum wage rules) raise the cost of labor the tipping point with regard to those tradeoffs switches towards automation. It isn't a universal tipping point though. It will be different for every particular industry and job type and regulatory regime. While automation is getting better, it is obviously not sufficient to replace humans in all situations. But if the costs of human labor go up (direct costs and indirect regulatory costs), then the tradeoff changes in favor of automation sooner and in more situations. There is a significant difference between automation that rolls out because it provides a better solution, all other things being equal, and automation that rolls out because the regulatory environment just took human labor out of the running. I've actually had conversations with party activists regarding the minimum wage where I asked why $15/hour?, why not $20, $25, $50? What was magic about $15? The answer was stunning. They actually wanted to go to $20, $25 or higher giving the argument that that way people would have more money to spend and it would boost the economy. They really and truly believed that there were no consequences to raising the minimum wage. That everything else would stay the same and that workers would simply have more money in their pockets. That amount of economic ignorance is stunning when coming from someone actively involved in state level party politics. As a final note, when automation isn't available to substitute for labor and the labor costs costs up then the result is simply that the service evaporates. Suddenly there is absolutely no supply for the service/product because the regulatory regime has made it economically infeasible. For example there are businesses leaving or actively avoiding California because the labor regime is too onerous for some economic activity.

by jbuzbee 10y ago

CaptSpify 10y ago

> this is not happening as much in Asia where labor and regulatory costs are lower. Yet It's still going to happen, it just isn't happening as fast. Even if you are paying a person $2 a day, a machine that costs $1 a day, and doesn't need breaks is cheaper.

gwright 10y ago
This is true but not very interesting observation. Machines and humans are not 100% substitutable. There are tradeoffs and cost is just one of those tradeoffs. Humans, for example, are pretty good at improvising when something goes wrong, not so much for machines. When regulatory policies (including minimum wage rules) raise the cost of labor the tipping point with regard to those tradeoffs switches towards automation. It isn't a universal tipping point though. It will be different for every particular industry and job type and regulatory regime. While automation is getting better, it is obviously not sufficient to replace humans in all situations. But if the costs of human labor go up (direct costs and indirect regulatory costs), then the tradeoff changes in favor of automation sooner and in more situations. There is a significant difference between automation that rolls out because it provides a better solution, all other things being equal, and automation that rolls out because the regulatory environment just took human labor out of the running. I've actually had conversations with party activists regarding the minimum wage where I asked why $15/hour?, why not $20, $25, $50? What was magic about $15? The answer was stunning. They actually wanted to go to $20, $25 or higher giving the argument that that way people would have more money to spend and it would boost the economy. They really and truly believed that there were no consequences to raising the minimum wage. That everything else would stay the same and that workers would simply have more money in their pockets. That amount of economic ignorance is stunning when coming from someone actively involved in state level party politics. As a final note, when automation isn't available to substitute for labor and the labor costs costs up then the result is simply that the service evaporates. Suddenly there is absolutely no supply for the service/product because the regulatory regime has made it economically infeasible. For example there are businesses leaving or actively avoiding California because the labor regime is too onerous for some economic activity.