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Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

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Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#11

Post by TheSpiceIsLife »

> 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.

I'm doubtful. From what I've seen it just means that those who do have full time jobs are expected to work more. Why employ two people for 20 hours a week when you can have one person for 40hrs a week? For most industries the managerial and administrative overheads are less with fewer staff who work longer hours.

> but has not really succeeded in shedding much light on where innovation comes from or what policies support it.

Deirdre N. McCloskey might have something to say about that in her tomb 'Bourgeois Dignity: Why Economics Can't Explain the Modern World'[1][2]. tl;dr her argument is that the ability to bring innovation to market, profit, and be dignified in doing so is the factor that brought about the modern world.

And besides, we only have to look at other developed nations with liveable minimum wages to see that it hasn't caused an automation revolution. Where I live, Australia, has an adult minimum full-time wage of $17.29[3] and has an unemployment rate of 5.8%[4] (for some definitions of 'unemployed').

A liveable minimum wage isn't going to cause an automation revolution. The Automation Revolution is going to be what causes the automation revolution, and for that to happen we're going to need cheap general purpose robots trickling in to the second hand market.

When a business can buy a general purpose robot for less than 5x the annual salary of a full-time employee, and it can learn new skills as easily as a human, we'll be close. It's looking like that's a way off yet.

1. http://www.deirdremccloskey.com/ 2. https://en.wikipedia.org/wiki/Deirdre_McCloskey 3. https://www.fairwork.gov.au/how-we-will-help/templates-and-g... 4. http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#12

Post by Pyxl101 »

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome.

In reality, what tends to happen when you increase minimum wage is that businesses lay off workers. They only have so many dollars to spend on wages at current profitability levels. Seattle's minimum wage for example has caused a massive loss of jobs compared to the rest of the state: https://www.aei.org/publication/minimum-wage-effect-from-jan...

Minimum wage directly causes unemployment by making it illegal to employ people at their fair market wage. [Edit: I'd be glad to read an argument for minimum wage if someone would like to link one. The articles that I see in the news tend to engage in moralizing and lack real explanation and justification.]

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#13

Post by bradleyprice »

oconnore wrote: post #3

Here is the critical section of the article: > 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. No, the workers are now fired. They don't get a raise. > The advanced robo-res…

This was my thought as well. I'm not even sure how to judge this article. It seems very misinformed with making assumptions without any supporting evidence on how we get there.

It's true that automation would bring in new jobs, but not the jobs that the people affected would be able to jump into.

As far as the whole child care and home health jobs go, I'm not sure there would be a mass influx of opportunities there.

I don't know if I've ever personally seen employees at a daycare making much more than minimum wage and there's already a thin margin with daycares. So, I'd think they'd be in same trouble as a restaurant employee.

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#14

Post by Retra »

Pyxl101 wrote: post #12

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase mini…

The "good argument" for having a minimum wage is that without it, wages will be pressured down, because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity.

Besides, you're just assuming people should be employed at "fair market wage." The political process is part of the market, and the fair market wage is determined by what is politically determined to be fair (AKA, minimum wage) just as much as it is by employers' demands. As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare.

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#16

Post by curiousgeorgio »

oconnore wrote: post #3

Here is the critical section of the article: > 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. No, the workers are now fired. They don't get a raise. > The advanced robo-res…

> Some low-wage work would be reallocated ... 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 if the poor people were making more money, the rest of the logic here is equally as flawed; somehow by firing people and replacing them with machines, those people will spend more money, and that will create the same jobs for which they were replaced by machines. Kind of a new twist on circular logic where each point in the circle is also a logical fallacy.

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#17

Post by unclebucknasty »

Pyxl101 wrote: post #12

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase mini…

It's not surprising that a conservative think tank released a study against the minimum wage.

There are also arguments and studies concluding that the minimum wage ultimately creates jobs.

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#18

Post by MaysonL »

Pyxl101 wrote: post #12

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase mini…

That AEI stuff is BS. Totally BS. Lying with statistics.

See this fairly devastating takedown:

http://ritholtz.com/category/wages-income/

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#19

Post by fche »

Retra wrote: post #14
Pyxl101 wrote: post #12

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase mini…

The "good argument" for having a minimum wage is that without it, wages will be pressured down , because every business on the planet wants wages as low as possible, and they generally have the means to achieve this. It has nothing to do with job creation: it's about having jobs that are not basically slavery. It's for job quality, not quantity. Besides, you're just assuming people should be employed at "fair market…

"As a business, you are not entitled to a profit. Especially not at the expense of your employees welfare."

That's funny, but true. You know what else is at least as true? No people are entitled to employment, especially at a loss to the business.

Re: Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky

#20

Post by fche »

MaysonL wrote: post #18
Pyxl101 wrote: post #12

I've never heard a good argument to justify having a minimum wage. A lot of the people who argue for minimum wages commit the fallacy of the false dichotomy: they think that the choice is between everyone having jobs and getting paid what they're paid now, and everyone having jobs and getting paid more -- they think they can somehow legislate the latter outcome. In reality, what tends to happen when you increase mini…

That AEI stuff is BS. Totally BS. Lying with statistics. See this fairly devastating takedown: http://ritholtz.com/category/wages-income/

confirmation bias
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