Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.

imageAs pressure mounts to raise the wages of fast food workers, advocates may want to take note that such wage increases eventually pass a threshold where it makes financial sense to simply invest in automation. As Grocery Store cashiers learned, these jobs are not a given. We are all competing not just with each other but with robots. 

One of the primary reasons that the gap between the rich and poor has increased so much in the past 20 years has been the rise in IT.  Once we purchase a computer, robot, etc. its capabilities – its output and productivity are owned by the buyer which increases the wealth generated by that person.

As people demand McDonalds pay workers $15 an hour and the government insists that they also provide health care, restaurant owners are increasingly evaluating whether to simply replace their work force with machines.  

Naturally, in 2017 when today’s “living wage advocate” is ordering their Big Mac from a friendly touch screen and having it delivered momentarily by a robot they’ll make no connection between how their beliefs resulted in more people living in poverty. Instead, they’ll blame McDonalds. They’ll blame greedy restaurant owners. But they won’t consider that perhaps it wasn’t such a good idea to price people out of their workforce.

More reading:

http://singularityhub.com/2013/01/22/robot-serves-up-340-hamburgers-per-hour/

http://www.thestar.com/business/2012/11/29/automatic_burger_machine_could_revolutionize_fast_food.html


Comments (Page 1)
on Aug 14, 2013

This gets back to your Atlas Shrugged quotes from another post.  The government, run by these (admittedly well intentioned) thoughtless advocates, will eventually just pass a real life version of Directive 10-289.   Cause remember kids, you don't need to think through the ramifications of your beliefs/policies/choices, you can just use the power of government to fix the problems caused by your last good idea at a later date!  Brilliant!

 

on Aug 14, 2013


I saw something similar to this in a buger joint in Holland.  

 

They had a wall of different food choices in something like post office boxes.   You put in your coin(s) and open up the see through locker and take the food.  The cook then puts something in there.

 

Kind of like a vending machine.

 

 

on Aug 14, 2013

I prefer the DIY approach. It tastes better and is never the same way twice. Lets see a machine do that.

on Aug 14, 2013

smeagolheart


I saw something similar to this in a buger joint in Holland.  

 

They had a wall of different food choices in something like post office boxes.   You put in your coin(s) and open up the see through locker and take the food.  The cook then puts something in there.

 

Kind of like a vending machine.

 

 

smeagolheart, myself being an 'Old Fart' I couldn't resist posting the below link.  It would seem that whatever tries to get passed off as new is really just something old packaged in a new box with a fancy bow. 

http://en.wikipedia.org/wiki/Automat

on Aug 14, 2013

smeagolheart


I saw something similar to this in a buger joint in Holland.  

 

They had a wall of different food choices in something like post office boxes.   You put in your coin(s) and open up the see through locker and take the food.  The cook then puts something in there.

 

Kind of like a vending machine.

 

 

Horn & Hardart Automat had 1/2 a city block of those "POB"s. People in the kitchen behind filling the boxes. A lot of folks miss H&H's.

 

on Aug 14, 2013

I think part of the larger "problem" with minimum wage vs. automation is that in the long run the minimum wage is irrelevant.  So many of those jobs (like in this case) are going away.  The ever increasing rate of technological change means that if it's profitable to replace that $15/hour employee with a machine today it'll be profitable to replace an $8/hour employee relatively soon with the same machine.  It'll probably only take a few years for it to come down in price that much.  

An unintended consequence of the government-portion of the cost of workers (mandatory health care, minimum wage laws, etc) is that not only are companies considering automating away some workers, but that the government is actually incentivizing companies consideration or automated alternatives (not even the purchase of equipment, just the consideration).  Which means more money will be put into this area by investors, inventors and the large companies that can afford the research.  Just the hint of these increased costs increases the pressure to make the automation profitable as quickly as possible.  Simply discussing something like $15/hour minimum wage at the national political level, which will never pass nationally in the US, actually itself accelerates the technological developments that will replace workers anyway. 

The problem that needs to be solved here isn't the so-called living minimum wage problem, but a much broader societal problem about education, a hugely weak economy, and a lack of non-automate-able jobs being created.  

on Aug 14, 2013

Oops double post.

on Aug 14, 2013

I work in the food industry part-time, because I'm a student. In 10 years I don't know what students are going to be doing to make cash because half those jobs are going to disappear. Not all of them but most of them. I don't think mechanization is going to make many people poor but I do see a lot of trouble coming for students because they have no skills or time to train them.

You never replace people with machines anymore then you replace diggers with shovels. Humans are always in the loop somewhere even just for troubleshooting. Workers just become more efficient as they receive better tools. Which in turns leads to certain industries requiring less overall labor, so more labor becomes available for other sectors. Unskilled workers used to all work agriculture until machines replaced them so then they all moved to manufacturing and services. However now the simpler manufacturing and service jobs are disappearing so who knows where that labor will go? Maybe gold farming in MMOs? 

on Aug 14, 2013

The big problem I see is that there's no longer "entry level" jobs.  Those jobs are either being automated or shipped overseas. Ever increasing costs to employ someone create incentives to automate or outsource.  As a result, those people never develop basic skills that they need to eventually build a career.

People routinely take for granted skills that many "entry level" people haven't developed.  For example - showing up to work on time.  You'd be surprised how many people fail this.  Showing up to work at all.  Developing the discipline to do a tedious job well. 

My first job was working for an excavation company. I literally cleaned shit off the "shovels" (large trucks with a mechanical shovel used to repair sewers). I made minimum wage (which was $3.35 at the time) and even then, I wasn't worth it because I did everything half-assed.  But I learned a lot of basic skills (showing up, doing a job I hated).  Self discipline is like a muscle. You have to work at it to develop it.

Today, there are many jobs that have been automated out of existence that deprive people of those entry level opportunities to develop skills. And a lot of those jobs would make sense if we could pay some teenager or young adult $4 an hour to do it.  But no, people insist on concepts like "living wage".  There is no scenario where cleaning shit off a shovel is worth $15 an hour.  At that point, it would make more sense for the company to invest in a power wash system or something and eliminate that job entirely.

As a result, we are rapidly creating a stratified economy with a huge gulf between the richest and the poorest. The sad thing is, this stratification can be thrown at the feet of progressives who are too economically ignorant to understand what they've done. 

 

on Aug 14, 2013

I don't know how they can call these things burgers...more like foodless hockey pucks.

on Aug 14, 2013

Jafo dreams of $15 an hour .....

When I started work it was a 40 hour week and my income was $44.....and 4 of that was tax.

I was still at Tech [in 3rd year] .... but the job was Arch Drafting for a small building-design co.

Back then, first-year students would do stuff like working at the Pancake Parlour....[fast food places practically didn't exist in Oz in '72].

The truly 'sad' thing about Maccas replacing people with machines is that one of their recent CEOs [an Aussie] actually started out as a burger flipper rug-rat earning eff-all ....and yet became the head of one of the biggest companies on the planet.

[He might have still been CEO now, except he died young from cancer].

Might be a simple/meagre starting, but absolutely ANYTHING can come from it.

on Aug 14, 2013

I think the stratification issue is the biggest issue facing our society in the next generation.  The fundamental issue is that entry-level jobs have a benefit to society, but not the corporations that create them.  Therefore, if left up to the free market, the jobs won't be created, or they will go to folks who need more than a minimum-wage job.

 

I'd actually advocate this as a solution: governmental taxes provide a minimal living wage equivalents to all Americans, but abolish the minimum wage.   The potential issue there is some folks would agree not to work.  Others would take the opportunity to chase their dreams, and certain folks would resent "their" tax dollars going to support "bums".   There's also the chance of an inflationary impact from this, though I consider this marginal, and having an increased safety net would generate economic growth through money velocity.  Another downside would be wastrels, but those folks I would not have sympathy for in my scenario, as the opportunity to survive would be there.

 

Fact is, a minimum-wage job just isn't enough for people, and that's all many folks have the chance for- if my career went, that's all I'd be able to get, and I know it.  It has real economic impacts now- I produce much less wealth for the economy than I should, because I hoard money like a mofo out of fear.  Nearly everyone I know that is doing decently among my age group, does the same thing- because there's the expectation that job loss can come at any time on a whim, and that getting a real job won't happen when the axe comes.   I have a huge argument with my parents who can't believe I would rather pay off my house over invest in a 401k, but I figured out if my house was paid off- I would be able to support myself on min.wage off the value of my savings.  Maybe I'd get lucky again.

 

Also, if corporations get screwed over by laws, it will ultimately be their own fault.  If the poor use the power of laws for their own economic advantage or flat-out wealth redistribution, how is that different than corporations using lobbyists?  At the very least, it's not any worse morally.

on Aug 14, 2013

Alstein

Also, if corporations get screwed over by laws, it will ultimately be their own fault.  If the poor use the power of laws for their own economic advantage or flat-out wealth redistribution, how is that different than corporations using lobbyists?  At the very least, it's not any worse morally.

Feel good laws like the minimum wage distort the system in such a way that it hurts the poor and it hurts small businesses.  They never hurt the corporation.  That's the whole damn point.  Your "give everyone a living wage" idea is just the minimum wage written another way, with a twist maybe, but the same thing.  Those laws will never hurt you're evil corporations.  Ever.  Corporations can absorb those costs. They can afford lobbyists.  They can afford the specialty lawyers that know the tax code loopholes and know how the healthcare laws work and what have you.  They can afford the research and the large scale purchases to automate away any costs that can be automated.  

Small businesses, who account for roughly 50% of the US economy, can't absorb those costs.  Small business are forced to lay off workers, surrendering further market to the large corporations.  

This is exactly what Brad meant by:

Frogboy

The sad thing is, this stratification can be thrown at the feet of progressives who are too economically ignorant to understand what they've done. 

 

Feel good ideas built around vague notions of "helping people" on top of a lack of understanding of economic fundamentals are what got us into this problem in the first place. Those minimum wage jobs don't exist because they're too expensive to maintain.  They're too expensive to maintain because of government intervention.  And they're getting ever more expensive with regulatory burden, regulatory complexity and a potentially rising minimum wages adding to businesses's costs.  Major companies absorb this cost and keep on trucking making money.  Small businesses, who also face continually increasing taxes that the big corporations don't face because of the way the screwed up US tax code works, can't keep trucking, can't afford the burden and then must lay people off.  In you're scenario you're screwing the poor and you're screwing the local guy but benefiting the big corporation because the competition in their markets just got easier.  

Regulation and government intervention (which is what you're idea is) always, always, always ends up benefiting big companies in favor of little companies.  Now that doesn't mean all regulation is bad, but it's why regulations should be passed with care and not in 1500 page documents passed 7 days after they are written and then only at the greatest need.  

This all goes back to my first response here.  The solution to government action that causes problems is never to cease the government action, it's to try and take new actions to cover up the mistakes of the old ones.  Welcome to ever increasing government and ever-stifled small business growth and ever growing stratification.  

And, to respond to your actual idea, every increase in the minimum wage ever has shown that all you get is a short term increase in purchasing power of those affected by the higher wages.  The economy absorbs the mandated higher wage relatively quickly and goes right back to the purchasing power levels of the pre-wage hike state.  

Stratification is the problem, but the cause isn't corporations and it isn't a lack of a living wage.  It's a terrible education system that fails to actually prepare people for the modern day version of Brad's entry-level job, a tax code that is nearly 17,000 pages long and impossible to apply fairly and a regulatory state that is literally impossible for one person to understand, let alone comply with.  All of those lead to an economy stuck in the mud and generating no jobs, like ours has been for 5 years and a citizenry that is either on the path to getting ahead or that is stuck perpetually behind because their government education failed to prepare them for their life after school and the economy has been pushed into such a state that you can't just go out and "make it" anymore like so many of our parents and grandparents did.  Those "make it" jobs have all been regulated away. 

on Aug 15, 2013

The downside is if corporations do enough of this, the poor will revolt because it will be in their best interests, and everyone loses.  People use the hand they're dealt.   Then you get an overreaction in the other direction.  And yes, corporations can lose big- all it takes is a citizenry that is willing to throw out the rule of law because they see it as worthless.  When folks see the law as worthless, they are willing to turn to the tyranny of the majority.  (and that can be done via the ballot box as easily as it can via the traditional revolution these days)   This is the foundation of the social contract as developed by Bismarck and Teddy Roosevelt: the government promises a fair system in return for the citizenry not overthrowing the government.

 

Minimum wage laws by economic rule do reduce employment.   That said, if employment does not produce something that contibutes to a better life, what is the point of employment?   You can't starve your citizenry, and giving them food stamps is just another corporate subsidy (it allows companies like Wal-Mart/McD's to pay garbage wages)

 

The service industries are key in this because it's something that cannot be outsourced as much as manufacturing.   If we get to a point as a society where only 50% or less of the population needs to be employed- we need to reconsider the axiom that jobs produce enough to live on.

on Aug 15, 2013

$15.00 an hour! Hell I was making less than that as a college degree'd Computer Technician when I first started! I could see taking minimum wage up to lets say $8.00 an hour, but $15.00 an hour to flip burgers is insane!

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