
Will minimum wage hikes lead to a huge boost in automation? Only if we're lucky - frostmatthew
http://www.vox.com/2016/4/2/11348148/minimum-wage-robots
======
oconnore
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-restaurant technology would itself be a valuable American
> export good, and people would be employed in designing and selling it._

Yes, but not the people we just fired.

> _Some low-wage work would be reallocated out of the relatively low-social-
> value restaurant sector and into things like child care and home health
> assistance, for which there is ample demand._

If there is ample demand for such things, and those things pay better, and
typical restaurant workers are qualified, then we should already see a mass
exodus from restaurant work. We don't. Thus one of these things isn't true.

> _Since poor people are now making more money..._

You have not given any evidence to support this.

~~~
cornholio
You are essentially making the luddite case. The counterargument usually goes
like this: yes, people would be fired and there will be serious pain in the
short run; however the machines will drastically improve productivity,
therefore reduce prices, so real wages will go up along with demand and the
extra income not spent on, say, buying feed stock for your horse, will go in
creating other jobs and economic sectors that will make use of the available
labor. The government can and should ease the transition by offering skill-
training and incentives.

While economically sound, I'm skeptical this process can go on forever. The
human biology and mind is clearly limited, while the progress of machines does
not seem to be. So eventually you will hit a fundamental limit where larger
and larger chunks of the workforce will simply be too old, uneducated or
simply too human to keep up.

How close we are to this fundamental limit it's anyone's guess, but I would
venture to say we are closer than most think. At the point where a serious
part of the population is unable to participate in the labor market, this
ceases to be an appropriate system to distribute the fruits of economic
activity and some form of basic income is required to maintain social order.

~~~
kdamken
> however the machines will drastically improve productivity, therefore reduce
> prices

Except why would that ever happen? If you were a business owner selling widget
X, and it suddenly cost you half as much to make that due to automation, you
don't pass those savings on to your customers, you celebrate how much better
your margins have gotten and how much more profit you're making.

~~~
seabee
True in a monopoly situation, but if you have competition and they can
automate like you, there will be a race to the bottom.

~~~
makomk
Now suppose the automation technology is thoroughly patented and the inventor
effectively has a government-granted monopoly on the right to use it or
anything similar to it.

~~~
icebraining
That might delay things, but (1) patents expire and (2) there are often ways
around them.

------
karmacondon
I think the fundamental purpose of a business is to accomplish a task, not to
employ people. For example, I don't care how many people are employed to keep
hackernews running. I'm thankful for their efforts, but I don't care if it's
one person, ten people, or one bot. Or how much any of them get paid. The only
thing that consumers and businesses care about is the end result.

If a job can be done by a machine, that's fine. People will find new forms of
employment. Or they won't. But we can't expect businesses or consumers to
misallocate their resources for the sake of someone's job.

Fortunately, fully automating the process of driving or running a restaurant
is decades away. We have time to implement a basic income. Or just come up
with more ways to employ people. The number of available jobs is limited only
by imagination. "Instagram Photo Producer", "Online Forum Discussion
Facilitator", "3D Printed Object Finisher". Someone can pay someone else to do
any given thing, and now that's an occupation. "Potential Job Titles" isn't a
finite list, and we can't ever run out of them.

~~~
JulianMorrison
Business is a social construct and we can un-construct it if it proves no
longer to be the socially valuable way to do things.

It's there to serve humans. if it doesn't do that, it's a parasite, drag it
out behind the shed and shoot it.

~~~
tmptmp
The Marxists and communists have tried doing that thing many times and have
failed spectacularly. Business based market economy is the only (till now)
successful and socially most beneficial type of society that has ever existed.
I upvoted the OP because he/she/it (it may be a bot) has put this thing in
clear words.

~~~
JulianMorrison
Up until now, the possibility of having a group of people who lead a leisure
life without an undercaste of slaves hasn't existed. Automation is a new thing
under the sun.

~~~
hjhgjtyhdf
That's funny because the "slaves" in America right now enjoy a higher standard
of living than virtually every king and queen before our generation.

~~~
pharke
How is this not patently false? If you take someone living below the poverty
line, earning minimum wage, renting their meager apartment, eating highly
processed carbs and pseudo-meat, in debt to their bank and payday loan sharks,
and under constant threat of homelessness brought on by unexpected illness or
economic downturn, how is this situation in any way superior to a king or
queen as they existed before "our generation" which I take to mean the modern
era rather than literally our generation.

A monarch of the past would have obviously better access to food, more of it,
higher quality, they might have slightly less variety available (dependent on
the era and location) but they certainly weren't eating the prepackaged
garbage that passes for low budget food today.

By law they owned not only their own vast properties, houses, palaces, etc.
but also that of all of their subjects and nobility allowing them to give and
take as they wished from anyone under their dominion. Even after reforms
almost all royal families were still left with vast holdings that produce more
than enough wealth to live absurdly opulent lifestyles. There have been many
cases of indebted rulers but that is debt in the sense of illiquidity, they
were still asset rich and able to melt the plate down to pay off the debts, so
to speak.

This notion that everyone was universally worse off in the past and therefore
even the lowest of the modern low are somehow better off in their current
state and should be thankful for it is the crudest of fallacies. The trite
example of modern healthcare being a shining example of why it's better to be
poor today than wealthy 200 years ago is equally absurd considering that such
care is often avoided by the poorest due to its cost right up until it's too
late to do anything about it. You wind up with a situation where a person's
only choice is to hope not to get sick since they can't afford the treatment
or the missed work either of which could put them even further under water or
on the street.

~~~
JoeAltmaier
I think that image of monarchs comes from the movies? The famous inventory of
Charlemagne's estate includes 2 cups, one chair and a towel. Their food back
then was bad meat and oatmeal, no matter who you were.

Indeed, just the existence of cheap antibiotics are likely to make the most
humble of today's citizens live decades longer than anyone from the past.

~~~
turar
This has a good overview of a routine day in the life of a monarch. It's
nothing like bad meat and oatmeal. [https://www.quora.com/What-was-daily-life-
like-for-a-medieva...](https://www.quora.com/What-was-daily-life-like-for-a-
medieval-king)

~~~
hjhgyhgd
A poor person today has access to thousands of movies and music on Netflix and
YouTube. A poor person today has a vast array of meals they can purchase with
less than one hour of minimum wage work. A poor person today can buy tons of
generic prescription pills whose formulas were nonexistent during yesteryear.

~~~
turar
A poor person has no Netflix, and doesn't have time for YouTube, she is either
clocked in on the job, sitting in traffic to pick up kids from school, or
cooking dinner. Besides, that kind of mindless passive entertainment is vastly
inferior to what monarch had access to -- hunting, horseback riding, live
music and shows, sex, etc. See pharke's response above regarding cheap
processed foods.

------
mbfg
I'm all for raising the minimum wage, temporarily it may help people for
several years. The truth is the automation wave is coming quickly regardless
of what people are paid. And it's not for just minimum wage jobs. Think about
jobs like truck driver where there's probably several million people who count
this as their profession in the US. In 10-20 years, that number will probably
approach 0.

There's a nasty new world order coming where a vast majority of jobs will be
gone. There will be super wealthy 'robot owners' and peasant/slaves, and
probably first in america.

The only hope is that the government completely changes the entire society
through 'more than' basic income. Of course we know that won't happen. It is
high unlikely that even a subsistent basic income will be put in place. The
government is run by the super-rich, and really only does what ever it takes
to protect their interests.

Hopefully my life span doesn't range long enough that i feel the devastating
impact of these changes, but i fear the timespan where this occurs is so
accelerating that it will be here in force way before we estimate it today. 30
years? I can see it being here in 30 years.

Even if you have a job that is 'automation-proof' or 'automation-resistent'
but not an elite, your income will be paltry compared to the super rich class,
and thus you will be relegated to the masses.

Yeah, I know, i sound hysterical. Hopefully i am. I doubt it.

~~~
IndianAstronaut
>There's a nasty new world order coming where a vast majority of jobs will be
gone

Want to know the biggest job killer in history? The tractor. Farm employment
in the developed world went from 70% to 2%. We have been through this before.
We can generate new jobs.

~~~
mbfg
We do create new jobs. But you do recognize it's a Ponzi scheme right? Each
iteration include a smaller set of highly educated jobs, which will be out of
reach for a larger percentage of the population.

------
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...](https://www.aei.org/publication/minimum-wage-effect-from-jan-to-sept-
seattle-msa-restaurant-jobs-fell-700-vs-5800-food-jobs-in-rest-of-state/)

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.]

~~~
Retra
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.

~~~
atemerev
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 quite limited, even
globally. But unskilled labor can be hired for much cheaper, as supply is
nearly limitless.

I don't know, they don't teach this stuff anymore in high school / colleges,
or what?

~~~
karmacondon
Why do you think minimum wage laws exist? It's because at one point in our
nation's history, businesses implicitly colluded to set wages low. They have
more power in wage negotiations than workers do, because there are generally
people who can afford to do unskilled labor for very small amounts. Businesses
got greedy and took that too far, offering people wages far beyond a minimum
standard of living. So in response, the people voted to set a minimum that
would prevent corporations from being outright exploitative.

The same thing could happen today. Google engineers will always be paid a lot
of money, but the average McDonalds workers could see their income fall way
below the national average cost of living. Whether the minimum should be
$5/$10/$15 is up for debate, but without businesses would have an unfair
amount of bargaining power.

~~~
pgtruesdell
Collusion to suppress wages is already illegal. All you're saying is that you
don't have any faith in the government to prevent collusion. Which is a whole
separate issue.

~~~
zanny
The other problem is that today we have labor gluts, particularly of the
unskilled variety. Automation reduces the need for workers, those workers
become economic outcasts with no influence to have their needs satisfied by
capitalism, and the ownership class does not create demand for more unskilled
labor - they want founders and professionals who can grow their wealth, that
is what _they_ demand.

If you drop the minimum wage you do not need collusion to see real wages for
jobs drop insanely low, ironically because those who can live off other income
will work them when there is no other easy way to earn additional income - IE,
those with wealth will work for less because their life does not depend on
that income providing their base needs, which already are in many places more
than what the minimum wage offers already (ie, living wage).

~~~
yummyfajitas
We don't have labor gluts at all. In the US working mothers struggle to find
child care for their children, houses go uncleaned, and productive people
drive themselves to work.

That's a situation of labor scarcity, not a labor glut.

~~~
zanny
If you offered sufficiently high wages to do those jobs, you would find plenty
of people willing to do them.

A labor glut does not necessitate me being able to ask for someone to mow my
lawn for one cent and having someone volunteer. You have a labor glut when the
availability of living wage work declines below the working population who
need to earn such a living.

~~~
yummyfajitas
That's fine - the point is that people aren't obsolete and work is available.
People are just unwilling to do the work.

That's not an argument in favor of a basic income - a basic income just
increases the incentives for laziness and makes the labor scarcity worse. (10%
or so in the Canadian experiments.)

~~~
zanny
Basic income gives the poor bargaining power in wage negotiations. It would
require cultural adaptation, but I know of few individuals whose whole needs
can be satiated by just having food and shelter. People still want _things_.
They take out insane loans, mismanage their money, and even sacrifice those
base necessities to possess things. We have a strong consumer culture, and UBI
can take advantage of that to reduce suffering and empower workers more to
actually negotiate with employers rather than it being a one sided
conversation with your only failsafe being an undesirable minimum wage.

I highly doubt making labor more scarce, when we are in such a glut (and
continued automation will perpetuate and expand the glut) would actually cause
any real harm to the economy. We already pad economics with millions of ghost
jobs that exist solely because the marginal loss in productivity and
efficiency having unnecessary workers is less than the cost of having mass
destitution and social instability.

~~~
yummyfajitas
A glut is when the supply is available to anyone who wants it and additional
supply goes unused.

We've already established that we have the exact opposite problem. Our
national infrastructure is crumbling because no one is fixing it. Skilled
women stay home with their children because child care is unavailable. Homes
go uncleaned, nails go un-manicured, etc, because no one is available to do
these things.

If we reduce the labor supply by 13% (what was done during the Mincome
experiment) that only makes these problems worse. For comparison, the great
recession cut labor supply by 5%.

[https://decorrespondent.nl/541/why-we-should-give-free-
money...](https://decorrespondent.nl/541/why-we-should-give-free-money-to-
everyone/31639050894-e44e2c00)

As you note, people want _things_ \- if we cut the labor supply we have _fewer
things_ to go around.

~~~
zanny
The supply and demand of labor does not care what people _need_ \- it does not
care at all that mothers _want_ childcare, or the citizens _want_ better
roads. All that matters is if that mother or if the citizenry are willing to
pay for it.

Predominantly most of that is due to the labor glut driving down median
incomes and leaving people with less economic negotiating power to get the
things they want done.

It isn't appropriate to talk in absolute figures of reducing labor supply.
That is one side of an equation without considering the other. UBI would
generate tremendous _real_ demand for cheap housing, cheap healthy food, and
all manner of amenities that can fit in that universal budget. Those demands
would be _met_ , because _everyone_ than has the economic negotiating power
equal to their UBI as a minimum, rather than today where many people have no
(unemployed) or negative (indebted) negotiating power at all and thus have no
effective economic influence at all.

It is _always_ about supply and demand, and to only talk about economics in
terms of one or the other is to argue for an intended outcome rather than
seeking out the best possible one.

If there were _actual_ demand for childcare, the going rate of childcare
workers would continuously rise as capital fought to be supplied by limited
demand. The rising prices would create incentive for people to enter that
labor force. That does not happen because _real_ economic demand does not
exist at those levels - it is not an actual labor shortage if all you want is
childcare workers _at_ minimum wage. If I want rocket scientists at minimum
wage, I cannot claim there is a shortage of rocket scientists period if they
are not willing to take the lowest possible payment I can give them.

There is a shortage of something when the real supply cannot meet demand at
_sustainable_ price points. Are Nannies expensive? Yes. Is that not a
sustainable cost? Absolutely not, Nannies are a valuable commodity, and those
that can do a good job should be paid for the scarcity of their skillset. The
reason there are not more Nannies is not because of some incredibly bullshit
argument about how "nobody wants to do the job, we would pay them _anything_ ,
but people just refuse to act rationally economically" it is because nobody is
willing to pay anyone sufficient wages to justify the career pivot into the
discipline.

And that relates back to my central argument for UBI - our economy prioritizes
the work "worth doing" as a central tenant of capitalism. All a UBI does is
potentially drop out the labor force of the work being done now that is the
least worth doing to begin with.

But TLDR, fundamentally, it is important to recognize that in capitalist
economies, demand is not people wanting something (better roads), it is the
money willing to be spent on the supply. So if nobody will supply the money to
build better roads at rates construction workers are willing to take, you do
not have a shortage of construction workers, you have a shortage of funds to
pay for better roads and thus you are not generating enough demand for them.

We have a demand problem, not a supply problem, as long as major corporations
are hoarding money and the stock market is at all time highs, capital is out
there. There is just nothing the controllers of that capital actually want
that anyone who isn't working now could supply.

~~~
yummyfajitas
Conversely, if there was an oversupply of labor prices would come down. Note
that I said labor is scarce, not that there is a shortage.

The fact that prices remain high suggest people are choosing not to work, not
that their labor is worthless and they can't find any job. Why do we need a BI
if labor is valuable and people are merely lazy? Why do we want to make a
scarce resource even scarcer?

~~~
zanny
What prices are high?

One important, central consideration must remain that labor is local. Surely
some cities in the US have a labor shortage, and the worse it gets the more
financial pressure it puts on the unemployed elsewhere to somehow manage the
opportunity cost to immigrate. But the workforce participation rate is at a
twenty year low, it is below 1960s levels before women even entered the
workforce en masse, and it is continuing to decline.[1]

I'm also curious who is "lazily" not working, and somehow still eating and
sleeping under a roof. And then I'd also argue that if you can find people
that are refusing to work minimum wage and instead _prefer_ to be homeless,
that is probably because they have no negotiating power in wage relations
because... there is a glut of labor. If there is work to do, that is valuable,
prices will rise to find supply. If the prices will not rise, then you do not
have actual demand, you have desire. Money is the only thing that speaks in
economics.

[1][http://www.cnsnews.com/news/article/susan-
jones/record-94610...](http://www.cnsnews.com/news/article/susan-
jones/record-94610000-americans-not-labor-force-participation-rate-lowest-38)

In the macrospective economy, I would like to see evidence of unsupplied
demand at the minimum wage for child care or construction workers. My father
works construction, and there is a tremendous glut of foreign laborers in our
area (Eastern PA) that drive wages down straight to the minimum with no
benefits. There is a shortage of skilled labor in the industry, but only
because the hiring practices of firms has prioritized the unskilled cheap
workers and thus drove talent westward. So _now_ there is a shortage of
skilled workers, but _only_ at non-competitive pay rates that the skilled
workers left because there was a labor glut, with firms simultaneously
unwilling to raise rates back up to attract them back.

~~~
yummyfajitas
_But the workforce participation rate is at a twenty year low..._

This confirms what I said - people don't want to work. Workforce participation
rate = (working + seeking work) / population.

 _I 'm also curious who is "lazily" not working, and somehow still eating and
sleeping under a roof._

People on public assistance. Millions are exploiting lax standards in
disability programs: [http://apps.npr.org/unfit-for-
work/](http://apps.npr.org/unfit-for-work/)

The vast majority of poor people (75% or so) don't work and are not seeking
work yet have consumption of approximately $20k/year/consumer unit. Where do
you get the idea that people will be homeless if they don't work?

 _In the macrospective economy, I would like to see evidence of unsupplied
demand at the minimum wage for child care or construction workers._

It's pretty easy. Offer child care for $7.25/hour and see if anyone tries to
hire you.

~~~
zanny
> This confirms what I said - people don't want to work. Workforce
> participation rate = (working + seeking work) / population.

The majority of the decline in participation is not some magical "nobody
_wants_ to work anymore" because people are on average poorer than they were
30 years ago. If...

> People on public assistance.

This is true, then losing workforce participation of millions would cripple
our economy if productivity were actually related to peak utilization of human
labor. I do recognize the increase in social security disability
participation, but 9 million does not make a near 20% drop in participation
rates. It is certainly a contributing factor, though.

> It's pretty easy. Offer child care for $7.25/hour and see if anyone tries to
> hire you.

If there were unfilled positions I would find them online on job sites, but
I'm not finding examples. Additionally, remember that 7.25 is not a living
wage in many areas, and people have to make the moment to moment decisions
whether working at or near minimum wage is worth it if you are still insolvent
doing it versus seeking more lucrative income with that time.

> Where do you get the idea that people will be homeless if they don't work?

My mother was effectively days away from homelessness last year, she quit her
job in 2012, did not seek additional employment for two years, by being a
property owner was ineligible for most welfare, and was being forclosed on for
property tax collection. We got to experience the real options she had on
where to live - there was no public housing available for at least 18 months,
she might have been eligible for subsidized rent but she was not going to get
free money for living and the process to get social security disability is not
as easy as people on HN like to make it sound.

Here is another thought - if people are dropping out of the labor force and
using welfare as a substitute, UBI is in every possible way superior. Social
security disability is a disincentive to work, because you lose benefits if
you do. The same thing happens at every welfare cliff in the current broken
system. I argue personally for UBI because of the negotiating power it gives
workers, the capacity for it to normalize the cost of labor against the human
cost it incurs rather than exclusively the rarity of the skills necessary to
perform it, the normalization of economic stability enabling people to be more
entrepreneurial, the extreme amount of social stability it would create to
correct for growing wealth inequality, and the extreme simplification of an
out of control welfare state bureaucracy.

But obviously valuable work is not going undone. If there were valuable work
to be done that nobody were doing, _I_ or any other active market participant
would weigh whether pivoting to in demand jobs were out there was economically
worth it, and capital really wanted it done, it would raise the price to find
someone to do it.

If the marginal value of labor is as low as it _must_ be to prevent the rapid
expansion of wage offerings for work done, it means the work not being done as
little or no marginal value according to the wills of capital, and we aren't
actually losing any economic efficiency having people drop out of
participation because the work they would have done, if any, would have been
of negligible significance.

------
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.

------
wrong_variable
A hike in the cost of labour _was_ the reason why the industrial revolution
happened in Britain vs India.

Even today, the cost of labour is so little in India that there is no need to
innovate in robotics,AI etc.

To me the question should be framed as - do we want minimum wage workers to be
slaves ? This is essentially the argument being made.

If robots are actually cheaper then why haven't they being deployed yet ?
Having done research in robotics when I was younger - there are more
productive use of roboticist's time then to go after minimum wage service
workers. Its non-trivial to exchange a waiter with a robot, and we already
have "ready made" food - so why do people still go restaurant ?

The only thing a hike in minimum wage is going to do is cut into the profits
of restaurant owners, landlords and big chain corporations.

~~~
GFK_of_xmaspast
> A hike in the cost of labour was the reason why the industrial revolution
> happened in Britain vs India

There was also the forced de-industrialization of one of those nations by the
other one.

------
unclebucknasty
The article makes a number of arguments as if stating accepted facts, when
much of it doesn't even logically follow.

> _Some low-wage work would be reallocated out of the relatively low-social-
> value restaurant sector and into things like child care and home health
> assistance, for which there is ample demand._

If this is true, then what is preventing it from happening now?

> _we are able to produce everything we need with less labor, we can afford to
> let people work less._

The tired old utopia argument. Robots will do everything while we all sun on
the beach.

Firstly, this ignores the fact that people spend their time working because
they need money, not because there is work to be done.

Secondly, If we are making things with less labor, then there is less demand
for labor and, thus, lower wages. Yet, the producers realize higher profits.
The actual result is not utopia for all, but the wealth divide that we see
now.

> _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._

Not sure where any of the leaps of logic packed in there originate. The entire
statement is completely irrational.

> _advanced robo-restaurant technology would itself be a valuable American
> export good, and people would be employed in designing and selling it_

Complete sleight of hand. We're talking about the effect on low wage workers,
not highly skilled robotics designers and sales engineers. The people who are
displaced are very unlikely to gain employment designing the robots that are
replacing them.

------
toomanythings2
I own several franchised fast food restaurants.

This article ignores several key points. Robots are expensive and would need
to be custom made for each restaurant to replace humans. Also, there would be
missing the human touch, making a restaurant visit cold and automated. No more
"service" and personal touches. You get what you get.

The immediate issue is, who pays for the increased labor cost? You do. And,
no, it won't just add a dime to your bill. My labor cost has gone up 150%
since I started in this 30 years ago as an investment. All my material costs
are also up at least that same amount. The unit cost to you of one of our
products was $4 back then. Today it is $8.

I now feel I hire better people but I hire fewer of those people and,
currently, won't hire teenagers cause they're unreliable but the quality of
person I need to run with this light crew is hard to find, more due to the
stigma of working fast food than the actual pay (though that's part of it).

The customer is price sensitive. The customer likes the human touch. If
restaurants go robotic, the most popular restaurants will be those without
one, and while the idea of raising pay to $15/hour is great, someone has to
pay for that, and that someone is you.

~~~
mbfg
This is a very sane point of course, and you are right that the consumer, and
perhaps the low wage earner (in cases of the McDonald's type restaurants) now
loses his extra wage to extra meal costs, so it is self defeating.

The problem though is that your costs are not driven up just by wage costs,
but by many other things that are not helping the low wage earner. So the self
defeating part of the "rising cost past to the consumer" is only a fraction of
what makes life miserable for those who are at the bottom. Increasing there
pay directly helps them 100%. And so it is still a net win.

~~~
toomanythings2
Those "other things" mean the cost of food, paper, cleaning supplies, etc.
that make a restaurant run. Those same materials are made by low wage earners
who, if given $15/hour, will drive up the cost of the supplies I use, thus
increasing my operating costs.

------
JulianMorrison
I don't want employment, and _hell no_ I definitely don't want full
employment, just the opposite. I want us as a species to transition to a
leisure society with the ick automated away, and the only jobs humans do being
ones humans would love to do for the sheer fun of it.

Because a minimum wage has a loophole for "not employed at all", it isn't good
enough. A Basic Income has no such loophole, and will allow poor people to
reject awful jobs, forcing them to be automated.

~~~
djrogers
I'm curious about this. In your ideal above, how would one go about pursuing
their dreams without an ability to earn excess capital through labor?

For example, my goal is to have a nice house on 50-100 acres. I also really
enjoy jet skiing and boating with my family - especially from a nice lakefront
rental with a private dock.

I can't fathom how I would pursue those goals in a 'leisure society'... Or as
a prole would I be expected to just accept my assigned housing, only use
public transportation, and put my name in an annual lottery for one of the
state run vacation compounds?

~~~
JulianMorrison
An approach I've considered is, that the living allocation by default is just
comfortable. You'd be able to get allocated a city apartment or a rural house.
But this is coupled to a delegation based "liquid" direct world democracy
where you can either direct your surplus yourself, or delegate it to someone
(or some organization). And recursively they can delegate it too.

So suppose you were Elon Musk and you said, I want to build a colony on Mars,
you'd probably be able to draw the interest of large delegating entities who
would grant resource priority to the program so it could make rockets, and
other entities would have projects that needed launching, and so forth.

Or compare a smaller project, if you were a marine biologist and you wanted to
equip a boat and go study penguins, there would be some delegating entity that
would care about penguins, and you'd get your boat.

Perhaps even if you just wanted a particularly beautiful house, you'd be able
to draw enough aesthetes to your cause.

But if you were just a jerk who wanted a mansion, well, probably not.

[Edit: for clarity, you could conceptualize this system as something like
crowdfunding, except global, recursively delegated, and directing resources
directly instead of money.]

~~~
djrogers
So that doesn't really answer any of the scenarios I posed. You do manage to
imply that I'm a jerk for wanting a nicer house/vacation/recreational vehicle
than I'm allocated by the state, so that tells me something...

Sounds to me like if I wanted to buy a jet-ski in your world, I'd have to find
a bunch of people to 'delegate' their 'surplus' to me. Perhaps I could perform
some function for them in return? Say, that sounds a lot like labor... So I
could work for money. Got it.

------
alkonaut
Minimum wage hikes are tough pills to swallow, but they are a reaction to lack
of wage increases over time.

If the lowest wages had followed the s&p or management comp. over the last
decades then this would be a non-issue. Weak labor/low organization and the
fact that many bought the myth of "trickle down economics" has kept the lowest
wages where the 1% wants them.

As for automation: if there are gains from automation they are likely there
already. I Mercedes builds cars much differently in the US compared to Germany
despite big differences in labor costs.

One difference that is immediately noticeable with high labor costs is not in
industry but in services 1) more self-service such as self checkout at grocery
store, self-checkin at airport 2) no non-essential services such as greeters,
bag-packers, 3) DIY is common

------
xorgar831
It's amazing how pushing technical boundaries is seen as worthy challenge, but
helping the those who are struggling with basic needs is seen as impossible
and an irritating overstep by the government.

------
eximius
What happens when automation displaces a sufficient portion of the unskilled
workforce that their value is less than 'minimum wage'?

In an increasingly technical and automated society, what do we do about those
who cannot adapt or become skilled enough to work in the increasingly
technical workspace? We can either manufacture menial, useless jobs or admit
to ourselves that HAVING to work is not necessary. We NEED to begin exploring
Universal Basic Income to learn how to accommodate this in the future. It's
either that or we let those who can't join the workforce suffer.

I don't know that we're there yet, but we will someday. Sooner than we think.

~~~
blazespin
we already are exploring it in the form of food stamps, tax credits,
guaranteed student loans, etc. I agree, we should be pushing more though.

------
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/](http://www.deirdremccloskey.com/) 2\.
[https://en.wikipedia.org/wiki/Deirdre_McCloskey](https://en.wikipedia.org/wiki/Deirdre_McCloskey)
3\. [https://www.fairwork.gov.au/how-we-will-help/templates-
and-g...](https://www.fairwork.gov.au/how-we-will-help/templates-and-
guides/fact-sheets/minimum-workplace-entitlements/minimum-wages#current-
national-minimum-wage) 4\.
[http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0](http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0)

~~~
hardcandy
Australia is being fueled by huge external stimulus from China, which won't
last forever. It's not the best example to use. Some of the mature European
democracies provide much more useful data.

~~~
TheSpiceIsLife
That's definitely true, to some extent at least.

This[1] says "The mining sector represents 7%[31] of GDP; including services
to mining, the total value of the Mining Industry in 2009-10 was 8.4% of
GDP.", and "Despite the recent decline of the mining boom in the country, the
Australian economy has remained resilient and stable." \- We'll see how long
that lasts. It's certainly given me pause when considering to take out a home
loan. Am I going to have a job in 5 years time?

1\.
[https://en.wikipedia.org/wiki/Economy_of_Australia](https://en.wikipedia.org/wiki/Economy_of_Australia)

~~~
hardcandy
From my friends in Australia (academic economists) I hear that China's impact
on housing now exceeds the impact on any other sector. Australia has
effectively become mainland China's money laundering hub.

------
Evolved
It seems like with regards to restaurants, this would only mostly apply to
fast-food restaurants. Raising the minimum wage doesn't really appear to have
an effect on servers given that the majority of their pay is from tips and
they are effectively legally paid less than minimum wage anyway.

Furthermore, it isn't supposed to be a living wage. You're not supposed to be
a single mother of 3 supporting yourself working at McDonald's. The minimum
wage is supposed to be for those new to the work force and then you're
supposed to better yourself and get a higher wage job. Where's the incentive
to invest in yourself to earn more if you're making $15/hr for menial work?

~~~
JoeAltmaier
That is an old dead horse. What job folks are 'supposed' to have according to
middle-class morality is irrelevant. Today only about one minimum-wage worker
in 10 are teens. A third are over 35. They haven't had a raise in 7 years.
We're talking 25 million people who can't pay basic bills.

And we're not going to make them into 25 million more engineers or programmers
or anything else really. There aren't enough jobs in the entire rest of the
economy for these folks to fill.

It isn't going to get better by itself. Now Carl's wants to automate the
counter. Banks are automating, expected to reduce head count by 30%. These
things happen across the industry, those folks aren't earning minimum wage,
they're out of a job.

------
partycoder
Before computerized elevators, there were manually operated elevators. Before
automatic telephone switchboards there were manually operated telephone
switchboards... Those things were relatively modern.

Future people will say: before automated kitchens there were manually operated
kitchens, before automated cleaners there were janitors, before self-driving
cars there were manual cars... and so on.

The domain of tasks that can only be done reliably by humans is shrinking.
Humans are being pushed to do more complex things. But that doesn't scale
infinitely. Robots eventually will be able to do better.

~~~
mbfg
Agreed. It's interesting that this thread is almost entirely about low wage
earners. Truck drivers were added to the conversation, but the truth is it's
not about low wage earning, but about rote working.

In 10-20 years, i'd expect

The job of accountant being pretty much wiped off the map for humans. Turbo
Tax, et. al, was a nascent first step.

Doctors, Nurses, Hospital Administrators, Staff will be significantly pared
down, and given much more commoner positions, as I can go down to Walgreens,
sit in the gene therapy booth and cure my own cancer, hiv, leukemia, als, etc.
etc. Perhaps Baby docs will survive the longest... that's kind of icky even
for a robot.

Dentists? Higentists? I'd expect in that period of time, we will be able to
regrow teeth beyond the first set of adult teeth... so, really what's the
point of your job function.

Middle Management? Various surveys suggest people actually would prefer to
report to a computer, rather than a human, and really, will it be that hard to
believe that middle management can't be done via robot? That's a good number
of people without jobs.

Bus/Train/Plane Drivers, gone soon as well.

Almost all manufacturing jobs will be gone.

As automated surveillance reaches its crescendo, surely police forces can be
significantly trimmed, even without the introduction of robocop.

And on and on...

If you want a job in the near future, start planning for one that is highly
chaotic. But with everyone fighting for those jobs, don't expect much in pay.

~~~
partycoder
Well the truck driver's work is not only to drive. Also to do maintenance on
the truck, inventory and such. How do you change a flat tire on a self driving
truck? You will still need some alternative. That alternative can be
automated, sure... but it's a problem yet to be solved.

~~~
unprepare
Whats the cost of run flat tires vs the cost of a human mechanic ten years
out?

------
davidiach
Thought experiment. If the government will start forcing your employer to pay
you, lets say 70% more than you currently make beginning next month (if they
want to keep you), would you be worried about losing your job? Oh, and let's
not forget, nobody else will be allowed to hire you from that point on if they
don't pay you at least that amount that your current employer will be forced
to pay you from now on.

~~~
notatoad
And the other thought experiment: you're currently making 70% more than
somebody who holds significantly less responsibility than you do, and has
significantly less skill than you.

If the salary their position pays is increased to match your salary, what are
you going to do?

------
danielrhodes
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 finance it. But it's not just small
establishments: even Walmart is very exposed to these wage hikes. While it
appears like they have lots of money, a lot of how they do what they do is
based on cheap labor.

In SF, after they boosted the minimum wage, I observed a few stores go out of
business. I'm all for people being paid more, but I doubt people losing their
jobs altogether was the intended consequence.

Another thing I observed was the price of eating out in SF rose considerably.
I remember feeling shocked that for a simple lunch (certainly not a luxury), I
paid over $30. Things like that hurt people on the lower end of the economic
spectrum, especially since poorer people are very sensitive to food prices.

The sad thing is: after taxes, if somebody is working the maximum hours they
can without being a full-time employee (which very few minimum wage earners
are), 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.

Perhaps I am cynical, but I don't see these wage hikes as having a net
positive impact. What drives up wages is a shortage in the labor supply and
businesses that need more skilled employees who they are willing to train and
keep for awhile. A minimum wage hike just gives businesses more reasons not to
hire people.

~~~
pm24601
> 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.

~~~
danielrhodes
Yeah admittedly that judgement largely depends on where you live and the cost
base. In my opinion, that wouldn't buy you much in SF or NY. For somebody
located outside of a city, it could have a much bigger impact.

~~~
pessimizer
3% of the country live in SF or NYC.

~~~
danielrhodes
80% of the country lives in urban areas and this number is increasing.

~~~
unprepare
So you are assuming that all urban areas have a similar cost of living to san
francisco?

~~~
danielrhodes
No. Is that what you want me to be saying so that you can tell me I have no
idea what I'm talking about? :-P

Let me make a few assertions:

\- The greatest benefits from a rise in minimum wage will go to those with the
lowest cost of living.

\- Living in an urban area (dollar for dollar) is more expensive than living
in a non-urban area.

\- Most minimum wage jobs exist in cities (according to Pew Research):
[http://www.pewresearch.org/files/2014/09/FT_14.09.08_Minimum...](http://www.pewresearch.org/files/2014/09/FT_14.09.08_MinimumWage_table.png)

\- To work in a city, it has become increasingly beneficial to live in close
proximity or inside a city.

Therefore, an increase in minimum wage, while certainly helpful, is going to
have less of an impact than one would hope, simply because those who work
minimum wage jobs have a higher cost of living by needing to be close to
cities in order to work those same jobs.

------
guelo
FYI, large minimum wage increases in the San Francisco Bay Area in the last
few years have been accompanied by drops in unemployment.

~~~
jbuzbee
But of course, San Francisco is hardly a good representative of the state.
What happens when the Dairy Queen in Fresno is required to pay the local
teenagers $15 an hour, or around $30K a year, to sell ice-cream cones? My
guess is that there's going to be one less Dairy Queen in California and those
teenagers will be out of a job.

------
fizixer
My response, as a minimum-wage hike supporter, to those CEOs who say "if you
raise minimum wage, we'll automate":

"Good! get off your lazy ass and make some technological progress!"

That also means we should raise minimum-wage more often.

~~~
rwjwjuwjudf
Yes, if humans are only being used in place of machines because human labor is
cheaper, then we should make human labor more expensive.

------
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.

------
nxzero
Automation unless the becomes the norm will never complete replace humans. For
example, number of places allow you to place an order via an app, but customer
with the awareness and ability to do so will just stand in line waiting.
Plentiful amount of additional explains, but the point is customer, not
business decide what they want, and customers often herd or group think.

------
melling
How did someone come to this conclusion?

"Right now the retirement age is rising from 65 to 67, and most people think
it will have to go up to 70. If robots can do a lot of the work instead, we
could put it back down to 65 or even to 62 while still growing the economy. "

Robots are going to pay the social security tax.

~~~
HillaryBriss
Assuming everything else stays the same, if a swarm of robots enters the
economy and starts doing a shit-ton of everyone's work at a tiny cost, then
productivity skyrockets and we all start collecting unlimited social security
checks starting at age 62.

But everything else won't stay the same.

Consumers will start to demand more from the businesses and governments that
use these robots. Businesses that don't get more robots -- or more expensive
robots -- will be left behind. Pretty soon the productivity miracle disappears
and we all have to work until we're 70, just like before.

------
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](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...](http://archives.chicagotribune.com/1964/05/28/page/81/article/a-m-
f-automates-drive-in-chef) [2]
[https://www.youtube.com/watch?v=FmXLqImT1wE](https://www.youtube.com/watch?v=FmXLqImT1wE)
[3] [http://momentummachines.com/](http://momentummachines.com/) [4]
[http://newsexaminer.net/food/mcdonalds-to-open-restaurant-
ru...](http://newsexaminer.net/food/mcdonalds-to-open-restaurant-run-by-
robots/) [5] [https://www.qsrmagazine.com/outside-insights/ten-tips-
surviv...](https://www.qsrmagazine.com/outside-insights/ten-tips-survive-
minimum-wage-increases) [6] [http://www.post-gazette.com/business/tech-
news/2006/06/16/Fa...](http://www.post-gazette.com/business/tech-
news/2006/06/16/Fast-food-assistant-Hyperactive-Bob-example-of-robots-growing-
role/stories/200606160187)

~~~
_delirium
I think that's roughly right. The big-picture trajectory of automation is
also, from where I see things in AI, not that sensitive to minimum wage
levels, at least if we're talking anything near the levels that have been
proposed so far.

California, for example, is proposing to raise the minimum wage from $10 to
$15 by 2022. That annualizes out to 7% a year, or probably around 5% in real
terms, assuming current ~2% inflation rates persist. That's just fiddling at
the margins with the economics of automation, not a revolutionary change. Tech
improvements are looking for orders of magnitude cost and productivity
improvements, not +/\- 5%. A wage floor going up 5% a year will, at most, move
up projects which were already a sure thing, making them economically feasible
a few years earlier than they would have otherwise been. But it's not going to
make things feasible that are currently an order of magnitude on the wrong
side of economic feasibility, or that are currently too unreliable to deploy
at all. And those are the kinds of changes that major progress in automation
is driven by.

------
galfarragem
Risking to be simplist, the political dialectic will be soon resumed to:

 _the right to be supported by society_ VS _the right to work for society_

------
blazespin
Good article, but he neglected to mention that it makes way for guaranteed
minimum incomes.

------
EdSharkey
stagflation

~~~
WalterSear
We are going to get both - mass redundancy on top of stagflation - reporter
cum arm-chair economists notwithstanding.

