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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

#61

Post by larubbio »

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…

Just to be clear, the article you link to, in the very first paragraph says "It’s too soon to tell for sure" which is much less certain than when you say "has caused a massive loss of jobs"

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

#62

Post by pm24601 »

danielrhodes wrote: post #52

I think what you're going to see with any minimum wage hike is that businesses who have thin margins, namely restaurants and small stores, will be forced to go out of business or be forced to degrade their quality of service. Labor costs are for any business the biggest line-item expense. Spending on "robo waiters" or what have you is a big upfront capital expenditure, and I doubt many restaurants will be able to fin…

> this would only net them an extra $450/mo. at most, which doesn't seem like it would be enough to have a big impact on somebody's life.

It absolutely would have a big impact. You are talking food for a money, a monthly bus pass and cell phone cost.

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

#63

Post by Animats »

Robotic fast food restaurants have been built. Check out AMFare, from American Machine and Foundry, deployed in 1964.[1][2] Automatically produced a range of meals (burgers, hot dogs, chicken, fries, shakes) comparable to most of McDonalds' business. This worked, and served real customers for a year, but was never deployed beyond one test location. Apparently it wasn't cost-effective. AMF returned to their more successful product, automated bowling alleys, which they still make and operate.

There's a startup trying to do a burger machine now.[3] Typical pretty web site, no installations. Last updated in 2014. McDonalds deployed a robotic kitchen in Phoenix AZ last year, and it hasn't been heard from since.[4]

Looking at the trade magazine of fast food, QSR (https://www.qsrmagazine.com), there's not much talk about kitchen automation. Even when they discuss a higher minimum wage, they barely mention automation[5]

Most of the newer systems look less effective than the AMF system from 1964. What's happened instead is movement of more processing upstream. The AMF system took in potatoes and bulk ground beef to make french fries and hamburger patties. Today, french fries are cut in a big plant elsewhere, and patties are pre-formed and shipped refrigerated. A fast food operation today is a final assembly plant.

One idea that did not catch on was automating fast food managers out of a job. Hyperactive Bob [6] is a system from a decade ago which watched images of customers lined up and lines at the drive-through, then decided how much food should be cooked ahead of orders. (That's the definition of fast food in the industry - is food cooked for inventory?) The company is still in business, but they mostly sell outdoor displays for drive-throughs.

So robots are not a threat to restaurant employment in the near term. Maybe 10 years out, but not yet.

[1] http://archives.chicagotribune.com/1964/05/28/page/81/articl... [2] https://www.youtube.com/watch?v=FmXLqImT1wE [3] http://momentummachines.com/ [4] http://newsexaminer.net/food/mcdonalds-to-open-restaurant-ru... [5] https://www.qsrmagazine.com/outside-insights/ten-tips-surviv... [6] http://www.post-gazette.com/business/tech-news/2006/06/16/Fa...

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

#64

Post by [deleted] »

wfo wrote: post #30
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…

If you really haven't ever heard a good argument in favor of an enormously popular economic policy that's been endorsed by hundreds of lauded and respected (even nobel-prize-winning) economists then you haven't been looking, or you're using it as a cheap rhetorical appeal to suggest you are correct without argument. I hope it's the first scenario since then you are simply ignorant and not malicious which is no crime,…

[deleted]

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

#65

Post by [deleted] »

TheSpiceIsLife wrote: post #23
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…

Well, I just don't know what to say to this. Sounds like the kind of thing someone who gets paid well above the minimum wage would say. Check out this Wikipedia article https://en.wikipedia.org/wiki/List_of_minimum_wages_by_count... and sort by Hourly Nominal in descending order. Australia, France, New Zealand, Ireland, Belgium, United Kingdom, Netherlands, Germany, and Canada all have minimum wages above the US. All…

[deleted]

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

#66

Post by [deleted] »

icebraining wrote: post #28
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…

They only have so many dollars to spend on wages at current profitability levels. But as a business owner, when the cost of your inputs increases, the question you're faced with is not "how can I keep my current profitability levels" (which is often not possible anyway) but "how can I maximize profit given the new environment". For example, if you're the owner of a restaurant with one or two or even four servers, you…

[deleted]

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

#67

Post by RivieraKid »

Automation will change the job market structure, i.e. what jobs and wages are available, which will have two major effects:

1. Change in income distribution and therefore inequality (not necessarily for the worse, but it seems likely). People often say that automation will result in unemployment, but that's only true if the minimum wage is fairly high. The real danger is rising income inequality.

2. Change of the fraction of GDP that goes to labour (as opposed to capital). Again, seems like it will be a change for the worse. The share of labour has been slowly decreasing for some time.

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

#68

Post by atemerev »

Al-Khwarizmi wrote: post #58
atemerev wrote: post #31

Earlier quoted context omitted.

True, every business on the planet wants wages as low as possible. This is, of course, correct. On the other hand, every employee on the planet wants her wage to be as high as possible. This is also obviously true. This creates law of supply and demand. Google can't hire a decent software engineer for, say, $30000/year, because other companies will immediately offer more, and supply of talented software engineers is…

How does this contradict the parent comment? Minimum wage obviously doesn't affect Google engineers, it affects the unskilled labor with near-limitless supply that you have mentioned. The idea is to prevent that kind of labor from becoming basically slavery.

Slavery is forced labor. I don't see anything forced here. Salaries for unskilled labor are driven down by lack of demand for unskilled labor, and nothing can be done about that.

What can be done is adjusting employees' skills to the areas where demand is still high. Coding bootcamps are one obvious possibility, but there are others. Everyone can learn new things.

You, personally, can help these people, too. Hire an Uber (I am sure it helps many people survive; I had my share of tough times, and I'd sure could have use it as some source of income; unfortunately, it was before Uber was a thing where I live). Buy something on Etsy. Spend money locally. Etc, etc.

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

#69

Post by SilasX »

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…

I hear what you're saying. As a means of "helping out the working class", it's stupid and simplistic: "workers aren't paid enough? Mandate they get paid more! Problem solved!"

The problem, of course, is that there are many ways to save money by screwing workers (eg worsen the working conditions) and if the market price is below the min you set, employers will just shift into those other ways.

A more robust solution -- as opposed to playing whack-a-mole over all dimensions of worker screwing -- would be to a) make their options more transparent and b) restrict supply somehow.

That's why -- counterintuitive as it may seem -- I actually think it's a step forward, what LA is considering: a system of "minimum wage OR be represented by a union" (which helps with a/b above). It gives a "release valve" for excessive minimums that allows for some market pricing while also proving a check against the things advocates really care about: worker mistreatment.

A minimum wage by itself is a clumsy fix for a more complex problem.

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

#70

Post by shkkmo »

Anyone claiming to definitively know the results of increasing minimum wage is talking out their ass. The economic effects of minimum wage increases are complicated and situation dependent. I think the people making 'back of the envelope' economic' here are being intellectually irresponsible.

I personally think that the minimum wage is a bad solution to the problem of providing a minimum income to our citizens.

By requiring people to hold a job to receive an minimum income, we create a glut of 'un-skilled' workers and we drive the price of that 'un-skilled' work down to the price floor created by the minimum wage. This means that jobs people don't want to do aren't being automated because there is so much cheap labor.

By creating a minimum wage price floor, we also eliminate the ability to offer jobs that don't produce enough capture-able value. (E.G. investigative journalism or child-care for low income workers). This means we are forced to automate jobs that people do want to do, but that are unfeasible due to the minimum wage price floor.

By gradually switching from a minimum wage to a minimum income, we can fix the current inefficiencies in the job market while solving the same problem.

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