While I am certainly sympathetic to the idea of living wages I am not ignorant of the very real consequences of paying extremely low skilled workers relatively high wages for work. One of the reasons is that unlike when Socialism and Communism first reared their heads, there is a mode of labour that threatens everybody's jobs in the near future: Automation and artificial intelligence.
There are only two things that stop automation from taking off: Technological development and cost of product. As Moore's law is being smashed to bits the cost of product as well as it's ability to perform has been come down dramatically. As the costs of human labour increases, automation becomes increasingly "profitable". As those machines become profitable humans see themselves unemployed. Last year
I pointed out to the building disaster that the minimum wage advocates are creating:
Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It’s not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can’t raise prices, because comic books and graphic novels have their retail prices printed on the cover.
You would be tempted to say that this is not an issue of automation and you'd be right. But imagine if that store owner could run his store entirely with robots and leave it open 24/7? Well lets look at what
Carls Jr. is looking to do:
Carl’s Jr. CEO Andy Puzder believes that fully-automated eateries are the future since his visit to Eastsa, one such establishment located in Canoga Park, California.
"If you're making labor more expensive, and automation less expensive — this is not rocket science," Puzder told Business Insider.
Apparently rocket science to some people.
The average fast food employee is 29 years old with a high school diploma, many of whom are single parents, The Washington Post reported. With a median pay of $8.92 an hour, one fifth of fast food employees’ families live below the poverty line – costing the US government $7 billion in welfare payouts.
Puzder believes that raising the minimum wage will be worse for fast food employees in the long run.
Single parents you say? There was a time when "single parents" was a rare thing and teens were the usual employees. What happened? Starts with a "f".
Whether or not the minimum wage is increased, Puzder makes a case for moving over to fully automated restaurants for other reasons. "They're always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case," says Puzder of the benefits of machines versus man.
Imagine. No insurance for employees. No workers comp. No paying for employees who are not actually working (sick and vacation days). I'm not saying that workers shouldn't have these things. I'm saying that these things
cost.
This last part was particularly instructive:
"Millennials like not seeing people," the Carl’s Jr. CEO said. "I've been inside restaurants where we've installed ordering kiosks ... and I've actually seen young people waiting in line to use the kiosk where there's a person standing behind the counter, waiting on nobody."
The very behavior of the next generation is ushering in their own employment demise.
