As states like California and cities like Seattle boost their minimum wages up to $15 an hour, critics warn that job losses will be inevitable. In particular, one major line of criticism from outlets like the Wall Street Journal editorial page and Forbes's Tim Worstall is that big increases in pay floors only lead to job loss via automation. Both critics point to initiatives at McDonald's and Wendy's to automate more of the service process, and warn that robots, rather than workers, will be the real winners if liberals succeed in boosting minimum pay.
This is doubly wrong. On the one hand, there's little guarantee that increased minimum wages really will increase the pace at which labor-saving technology is developed. On the other hand, there's no reason to think this would be a bad scenario. California's minimum wage hike pushes the issue beyond the terrain in which it's been studied.
If minimum wage hikes really do spur the creation and adoption of high-quality new equipment to automate elements of, say, the food service industry, then that would be a very positive outcome that implies minimum wage hikes are a great idea. Productivity-enhancing technology, after all, is a crucial pillar of social and economic progress. The problem in recent years is that we haven't had nearly enough of it.
Given that, a huge increase in automation is really the optimistic outcome. The thing to worry about is that this won't happen, not that it will.
Welcome our new robot wage slaves
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.
- The advanced robo-restaurant technology would itself be a valuable American export good, and people would be employed in designing and selling it.
- 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.
- 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 better, to the extent that we are able to produce everything we need with less labor, we can afford to let people work less.
Read more
http://www.vox.com/2016/4/2/11348148/minimum-wage-robots
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