"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Tuesday, January 14, 2014

When the Minimum Wage Goes to $15/Hr. Here's What Your Burger-Flipper Will Look Like

A robot:

Don't say you weren't warned.   It is only a matter of time before a restaurant opens that has automated order-taking (via a touchpad), automated food preparation, and automated delivery.  

This is why the minimum wage increase is such an extraordinarily bad idea.

1.  At a time when there are more people (supply) than we have jobs (demand), the price of people's labor ought to go down.   Indeed, the mere fact that there is such high persistent unemployment is a market signal that the price of labor is too high.

2. If instead the government forces that price, which is already too high, to go up, you will have even less demand for labor, and even higher unemployment.   This isn't me being a Republican meany.   This is the law of supply and demand.  

3. Meanwhile, when any good gets priced too high, consumers start looking for substitutes.   If beef gets too pricey, we buy chicken or pork.   If gas gets too pricey, we take the bus or walk.   If Ivy League schools get too pricey, we choose a lower cost alternative for higher education.  

4. Consumers of labor (businesses) are no different.   When the price of labor gets too high, they start looking for substitutes.

5.  For years, the available substitutes for overpriced domestic labor were found in foreign labor markets.   "Made in China" labels might as well have been identified as "Not Made in America Because American Labor is Over-Priced."   The first-wave of computers facilitated this kind of substitution because they enabled, through information management, better control over ordering, inventory and shipping.

6.  But now companies like the one above are obviously identifying a need that they can fill by inventing and manufacturing and marketing substitutes for human labor.   This is the second wave of computers where they won't just facilitate manufacturing things wherever you want (globalization), but will facilitate manufacturing things using non-human agents (automation).  

But the Democrats keep thinking that they can vote their constituents rich.

It would be funny if it weren't so very sad.


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