Thursday, December 05, 2013

Minimum Wage Hikes Create Jobs, For Robot Builders

Ordering a burger at McDonald's in Amsterdam
Hamburger Machine makes 360 custom burgers per hour
If a $15 per hour minimum wage is such a good idea, then shouldn’t a $25 per hour minimum wage be even better? Or perhaps Washington should enact a $50 per hour minimum wage. And just think of how wealthy Washington could become if everyone earned at least $100 per hour.

The citizenry of SeaTac recently imposed a minimum wage hike to $15 per hour for airport employees. And now Seattle’s looney left thinks that their city should enact a similar minimum wage.

Barack Obama wants a ten dollar minimum wage.

This continues a leftist tradition that believes that its agenda is exempt from the laws of economics. Any minimum wage at all guarantees that entry level jobs will be overpriced and thereby forces them out of the market place.

Regardless of what they say or how they vote, Americans do not support overpaying for low skilled jobs.

When was the last time that you paid somebody to pump your gas? More than four decades ago, I was putting myself through college by pumping gasoline. As the price of crude oil soared, so did the price of gasoline. Gas stations began offering customers a two tiered pricing system. You could save a few cents per gallon if you were willing to pump your own gas and wash your own windows. Needless to say, the idea caught on and only in Oregon, where it is mandated, do you find stations that will operate the gas pump for you.

Go to your local grocery store and you’ll find self-service check out aisles. It will not be long before grocery stores offer reduced prices for customers using those aisles. The person on the other side of the cash register will soon follow the gas station attendant into historical obscurity.

My first job, as an 11-year old, was picking tomatoes in California’s Sacramento Valley. A decade after I picked my last tomato, nobody was picking canning tomatoes anymore. A labor strike left a full season’s worth of tomatoes rotting in the fields. The next year, the tomato growers used automated tomato pickers.

Another sector of the economy, that has exploited its monopoly for decades, might soon find that it has priced itself out of the market. is experimenting with delivery drones. Instead of paying high prices to UPS or Fedex, Amazon plans to ship its own products to centralized “fulfillment” centers from which the packages will be delivered by automated “delivery drones.”

All of these stories demonstrate that low-skilled jobs are ultimately worth only as much as it costs to replace the person holding that job. Unions can only defy gravity so long. Economics will eventually catch up.

I saw a demonstration advocating for a minimum wage hike that highlighted two McDonald’s employees, both of whom had worked at their jobs for many years and were still earning minimum wage. One had worked there for 14 years. He was demanding that Barack Obama and Congress force McDonald’s to pay him more.

Surely this was meant to generate sympathy for the cause, but if after 14 years this employee is still only performing entry level tasks, then I have to wonder if he’s overpaid. Few employers want an employee with so little ambition that he has not elevated his value beyond the level of an apprentice burger flipper.

But he had grown so steeped in the culture of dependency that he believes that everything comes from government. This view does not encourage personal ambition.

There was once a time, and it wasn’t so long ago, when fast food patrons were a captive audience. If you wanted a burger, then you were going to have to pay some low-skilled worker to build it for you. But that’s no longer the case. There are already hamburger vending machines competing with the burger stands. The White Castle franchise uses vending machines to market its product. In addition, the company sells microwaveable frozen burgers through grocery stores. And there are already machines that can build a fresh burger with fresh ingredients that are indistinguishable from those assembled by human beings.

If history is a guide, consumers will flock to those hamburger franchises that can deliver a quality product at a lower price.

This is clearly the future, especially if minimum wage laws price low-skilled labor out of the market. And if fast food workers follow Democrats’ advice and strike for a higher minimum wage, they’ll disappear like tomato pickers.


Post a Comment

Subscribe to Post Comments [Atom]

Links to this post:

Create a Link

<< Home