The economy is a complicated thing. That is, as a general rule, I don't like politicians of either party monkeying around with it.  The average politician has virtually no understanding about economics. Often times, it's worse than no understanding -- often they have no common sense about it.

Let's use the minimum wage laws as an example.  To help those who make relatively little money, some people argue that we need to raise minimum wage.  So let's say we raise it to oh...$9. Now, I'm not going to bore you with statistics about the fact that most people who make low wages are employed by small businesses who would simply hire fewer people. I won't point out that such things help encourage outsourcing or hiring illegal immigrants. I won't point out that in the cases where it doesn't cost jobs it instead raises costs which are then passed on to us all in higher prices which put us back at square one.  These are all interesting but ultimately too debatable.

Instead, I'm going to use an example that most people, I think, can recognize the truth in.  Fast food.  McDonalds, Burger King, and other fast food restaurants employ approximately 12 million people. That's a lot of people. Most of them make between minimum wage and $8 per hour depending on where they live.

So let's say suddenly minimum wage jumped to $9 per hour. That's a huge cost increase for those restaurants. So what do you think they'd do? I'll tell you one likely solution: Kiosks. Been to a grocery store lately? Checkout lines at grocery stores were one of the first victims of the last minimum wage increases. At some point, a threshold is crossed and it becomes cheaper to have customers enter in their orders/purchases onto a friendly looking computer kiosk.

A typical shift at McDonalds consists of 10 people. Of those 10, half of them are dedicated to various degrees to taking orders.  Next time you're at a McDonalds, look at it again. How many of those people do they really need? I mean, how many could be replaced by a kiosk where people would simply enter in their orders, receive a print out of what they ordered and an order ticket, and wait for their order to be fulfilled?  I'd get at least 2 of those people could be replaced by kiosks. Probably 3 eventually as people become more comfortable with ordering via kiosks.

That's a 20% reduction.  Spread across the entire industry and you're talking 2.4 million lost jobs. Now, you might say that I'm over-reacting. But mark my words, raise minimum wage and that is what you're likely going to see. A wholesale movement to kiosks in the fast food industry.  It may happen anyway -- eventually. Like ATMs. Like what is happening at grocery stores (courtesy of the last increase in minimum wage). 

Minimum wage jobs are for entry level positions. Most of those positions are very low skill. Their competitors are other low skilled people but increasingly also from machines. Businesses will automate at the point where automation costs them less than hiring low-skilled workers. It's a very simple calculation for them.