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 3)
on Aug 15, 2013

Just want to throw out I see no one mentioning the declining value of the dollar and the shenanigans of the private cartel at the Federal Reserve that arguably controls the entire economy. We can go back and forth over this capitalist vs. communist vs socialist thing all day and pay no heed to the those who control the money. I think that's the desired state of the Wizard of Oz. Carry on!

on Aug 15, 2013

I've always been a libertarian, but the increased automation and ideas of post-scarcity economics has always been the sticking point in the ideas, and the point of future concern. Obviously the solution is to move people into other fields as has been done with all technological revolutions of the past, but this requires good education. Good education is something that our country has been sorely lacking. 

Until the education system is capable of bringing all people up to be capable of finding jobs in such a new economy, I'm thinking we may have to go with Milton Friedman's idea of a basic income. Some small stipend that would go to every person regardless of their income. This would completely eliminate all other welfare, social security, and safety nets in the economy and replace it with a single payment...  It would have to be enough to live, and enough to get modern necessities like basic internet, but not excessive amount. It's best that people are uncomfortable if it is the only source of income they have, and thus will seek any economic activity they can find to boost it up. Unlike most welfare programs, it wouldn't cause sticky poverty because it would be kept even if you did make it big. It would also require the elimination of the "Minimum Wage" laws though, so that getting that extra income and work experience would be a whole lot easier for people. 

Making it equal and universal seems to be the best way to go with these sorts of things. The Scandinavian countries have had great success with universal non-means-tested programs like this. (They have a universal housing stipend, for example.) If we increase libertarian ideas, then backstop it with these basic income ideas, then it might be an attractive solution and could help with the temporary issues that a post-manual-labor or post-scarcity economy may cause.

I'm personally not completely convinced, but I'm willing to sign on for giving this sort of thing a try.

on Aug 15, 2013

The pressures to increase/impose a minimum wage is nothing more than a simple cause-and-effect result of economic inflationary trends.

What's 'needed' is for there to be an acceptable non-subsistence wage or supplimentary income for students/Macca workers/etc.  where it's likely they are partially being subsidised by their parents eg. living at home....

An absolute line 'drawn in the sand' re $15 really doesn't help anyone - if enterprise bargaining were seen as 'the norm' then employment might just be simple supply-and-demand...

on Aug 16, 2013

supply-and-demand ...

reminds when recently we had a census in Germany. after the results were published one politician had a glitch in the matrix and demanded more immigration, because we would need more "potential workforce". seems we actually don't need more workforce, just potential workforce to keep the wages low.

on Aug 16, 2013

So everyone gets a guaranteed welfare check and everyones happy?  Im trying to wrap my head around this. Who is paying for all this?? The big evil corporations through really crazy high taxes? Somehow I dont understand how any company could basically pay you to buy their stuff. How would they make a profit? Oh thats right. Silly me, I forgot that its evil to make a profit. If we go by this great socialist utopian idea, pretty soon all the businesses will go broke and out of business. Then nobody would be able to get free money from the nice government because nobody is paying taxes since nobody has a job. Now we are all poor except for the Uber rich. All the poor people are killing each other fighting for tree bark while the .0001% are living the life of luxury and power.

 

 The one sole objective for any business, is to make a profit. The one sole reason that motivates people to work, is to make a profit. If it cost you more money to go to work than what you can make, would you continue to work? No, you wouldnt. Not unless you are doing it out of the kindness of your heart to help a loved one or some other such rare scenario. Its the same with those "evil" corporations. People dont risk their money and livelihood for the sake of creating jobs. That company was created to make money. Thats a simple as I can put it. A company hires people to help get tasks done. When it reaches a stage that it starts making a profit, many will look to adding new products or services to their company. Also known as expanding. When a company expands, it almost always creates a need to hire new people. If this same company begins losing money it will have to lay of people and stop providing those extra goods/services. This is known as contraction. If a company is overwhelmed by taxes and regulations, they are eventually going to shut down shop and that hurts everyone. 

 

  EDIT**** add**

 

 If the nice government is just going to give me money for free and I dont have to do anything, why work? Why bust my rear end just to get an extra hundred dollars or so while I could do nothing and still live ok? No motivation for work is there. Then even less people are working to pay into this Utopia that is supposed to support the people. This fairy tale crumbles under its own foolishness.  

on Aug 16, 2013

The amount of revenue required for this would be around $5-6 billion.  That's not a huge amount of the budget, and some welfare spending could be taken out of the budget to help pay for it.   It could be done with a tax hike of about 1 or 2% on the top 1% of Americans, or a small drop in military spending.

 

In addition, that revenue would generate revenue for two reasons

 

a) A baseline would encourage consumption over saving, increasing money velocity

That baseline would also allow for more entrepreneurship, as risks of failure are lower.

 

This is not some massive plan that would bankrupt the government.

 

Why work?   The amount of money given is not a comfortable life for most folks, a few folks who are super-frugal Clark Howard types would be able to live off the money, but most would want something more, and they would seek jobs.   That said, those burger jobs (minimum wage) is gone will have to pay a wage that people are willing to spend their time working, whatever that is- the market would decide from a position of equilibrium.

 

Also, most people do wish to work and be productive members of society, most people do not want to be leeches.   What you would see is more people try to take creative pursuits or start their own businesses- but that's a good thing.

 

One potential downside, an increase in money velocity could lead to an increase in inflation as it would increase supply of money.  This can be controlled fairly easily through monetary policy.   Another potential risk is folks who squander their money and starve, but such folks would honestly be mentally incompetent in my eyes, and should be placed somewhere (most likely they'd be drug addicts or compulsive gamblers)

 

 

on Aug 16, 2013

Alstein

The amount of revenue required for this would be around $5-6 billion.  That's not a huge amount of the budget, and some welfare spending could be taken out of the budget to help pay for it.   It could be done with a tax hike of about 1 or 2% on the top 1% of Americans, or a small drop in military spending.

In addition, that revenue would generate revenue for two reasons

a) A baseline would encourage consumption over saving, increasing money velocity

That baseline would also allow for more entrepreneurship, as risks of failure are lower.

This is not some massive plan that would bankrupt the government.
 

So as a country we're spending $100B per month more than we have... lets add to it.  Or lets do it by slaughtering one of progressives two favorite golden calves.. taking it from the military (in a world that is significantly more hostile to us than it was five years ago) or take it from those filthy rich people.  All in an effort to "increase the money velocity" in a society whose basic problem stems from the fact that we don't save enough.  We're a consumption happy society and the government has already been doing everything it could to increase that consumption rate for the last two decades.  That's the root cause of our problems, but let's add to it!  

But really the main flaws here are threefold.  One, you assume a corresponding reduction of welfare in some other area.  That's the whole crux of my argument.  This never happens. Spending, regulatory complexity, the raw number of regulations.. grow inexorably.  They never shrink.  It is irrelevant which party is in power.  You hear nonsense about Bush slashing protections in this area or that, but they're not true.  By any measure government was larger at the end of Bush's term than it was at the end of Clinton's which was larger than at the end of H.W. Bush's.  Regulations, and the government bureaucracies they create, never go away.  So you're never going to get a corresponding cut. You're really talking about additional welfare and the corresponding additional spending, regulation and bureaucracy at a time when the single greatest problem facing the future of America is unfunded debt rising into the tens or hundreds of trillions of dollars.  

And I'm sure no one will ever argue that this new welfare program you just created should be increased.  After all, whatever number you start out with, that's not really enough to live on, so we have to increase it. Welcome to the next Social Security scheme, only for everyone!

The bigger flaw, one progressives and "living wage" people seem to never want to comprehend, is that the economy would adjust to your living wage.  Purchasing power would decrease as a result, inflation, which is going to be a big concern again soon, becomes an even bigger concern and you end up having to get into money control schemes that do nothing but destroy the stability of the economy.  You end up mucking around in the system, causing problems and getting next to no benefit anyway.  

Lastly, the last thing we need in this country is further disincentive to work.  The labor participation rate is already at it's lowest in decades.  Because of this the true unemployment rate has been hovering at levels not seen since the Great Depression.  

You simply can't "welfare" your society into prosperity.  The only way to do it is to fix the problems with our economic system and to let the system work.  Wealth is generated by a healthy economy.  No other pretend government means will get the job done.  Wealth generation by the economy is the only way your raise the quality of life for everyone.  

on Aug 16, 2013

Alstein

This is not some massive plan that would bankrupt the government.
 

FYI:  Nothing is ever some massive plan to bankrupt the government.  And yet our government is bankrupt.  

Funny how that works, isn't it?  It's almost as if all these magic programs grow beyond their purpose and in an uncontrolled fashion..

on Aug 16, 2013

Alstein

Why work?   The amount of money given is not a comfortable life for most folks, a few folks who are super-frugal Clark Howard types would be able to live off the money, but most would want something more, and they would seek jobs.   That said, those burger jobs (minimum wage) is gone will have to pay a wage that people are willing to spend their time working, whatever that is- the market would decide from a position of equilibrium.

Also, most people do wish to work and be productive members of society, most people do not want to be leeches.   What you would see is more people try to take creative pursuits or start their own businesses- but that's a good thing.

One potential downside, an increase in money velocity could lead to an increase in inflation as it would increase supply of money.  This can be controlled fairly easily through monetary policy.   Another potential risk is folks who squander their money and starve, but such folks would honestly be mentally incompetent in my eyes, and should be placed somewhere (most likely they'd be drug addicts or compulsive gamblers)

 

Two other points (you made a lot of points worth responding to!).  

One: "those burger jobs will have to pay a wage that people are willing to spend their time"... Congratulations.  You just made a McDonald's hamburger cost $19.  Again, the only people getting hurt are poor and lower middle class people (the larger portion of McDonald's customers). 

Two: "Another potential risk is folks who squander their money and starve, but such folks would honestly be mentally incompetent.." except they wouldn't be considered such at all.  They'd be placed on a special government program for people who blah blah blah (read: more welfare and more spending).  They'd also get Medicaid, so there's that additional cost you forgot about above.  

Come to think of it... how do all of these freebie people who don't actually want to work under your plan get healthcare?  Some new government healthcare program perhaps?  Or we expand the medicaid rolls?  Or we increase the program payout to cover purchasing their own healthcare?  Good times.

The larger point is that this is exactly the sort of problem I've been talking about in this thread.  We continually pass these magic bullet programs where no one takes the time (whether purposefully or accidentally) to truly understand what the consequences of the program will be for society as a whole.  And then we end up in a situation where our magic bullet caused a whole host of new problems, so we need a new magic bullet.  

Instead, let's take the time to assess the system honestly, rebuild the flawed parts (hello, tax code, Medicare/Medicaid and Social Security I'm looking at you) and then go from there.  Notice I said rebuild, not scrap.  But we can't fix them, because even having a real conversation about them in this country is racist or a war on old people or women or the poor or some other bullshit.  

Capitalism works (my evidence:  the difference in the rate of improvement of human quality of life in the last 200 years vs. all of human history before that).  The problem is we have these schemes to solve problems that have pushed the system out of whack so it's no longer running properly.  It's possible to find the right balance between social safety net and pure-capitalism.  The problem right now is we don't have either, really, and so we have none of the economic prosperity we should have under "evil capitalism" and we have a system that actually functions in a way that hurts the poor and lower middle class and decreases economic mobility thereby hurting our efforts to build a proper social safety net.

on Aug 16, 2013

The hamburger won't cost $19, prices are determined not so much by costs of labor (which is a tiny percentage as is) but by what the market is willing to pay.  From what I've read, the price would only go up only about 17%, if at all.

http://consumerist.com/2013/07/30/how-much-would-a-big-mac-go-up-in-price-if-mcdonalds-workers-were-paid-15-per-hour/#more-10134128

 

 

Medicaid was not a cost I listed, because I was factoring additional cost.   Medicaid costs would actually go down slightly, as working poor+stipend might price some of them out of Medicaid.  Obamacare is only a band-aid anways, it will be strengthened in a decade or two when demographics shift.

 

The reason we have social welfare is simple- without it you have a huge portion of people in poverty, then you get the Arab Spring in the US.  When 90% of the population has no stake in a society, it fails.   The whole point of the social welfare system is maximizing net social benefit to avoid such a scenario, it's a duty government has for its citizens.

 

Also, Capitalism didn't result in an increase of life quality for the lower classes until the union movement started (pre-Industrial revolution living conditions were better for the lower classes than Gilded Age living conditions for lower classes, it was only the middle and upper classes that benefitted)- it literally took a fear of Communism in both the US and Germany for things to change.   I'm not saying Communism is a good system, it failed because it was as extreme as Objectivist "captialism"  ideology- you need a balanced approach that uses capitalism but adjusts for its limitations and flaws.

 

on Aug 16, 2013

Alstein

The hamburger won't cost $19, prices are determined not so much by costs of labor (which is a tiny percentage as is) but by what the market is willing to pay.  From what I've read, the price would only go up only about 17%, if at all.

http://consumerist.com/2013/07/30/how-much-would-a-big-mac-go-up-in-price-if-mcdonalds-workers-were-paid-15-per-hour/#more-10134128
 

Even assuming those numbers are right, which I'd argue, you're talking about a 17% increase in the cost of everything dependant on sub ~$15/hour labor right now, not just McDonald's hamburgers. Who has the most trouble absorbing that cost increase?  The evil "rich" or the poor and lower-middle class?

Alstein

Medicaid was not a cost I listed, because I was factoring additional cost.   Medicaid costs would actually go down slightly, as working poor+stipend might price some of them out of Medicaid.  Obamacare is only a band-aid anways, it will be strengthened in a decade or two when demographics shift.

Whether you factored in Medicaid or not is irrelevant.  As is whether or not they would qualify for Medicaid.  The fact remains that you would have a huge new dependency class with no jobs and no health care.  How are they getting healthcare?  Either they don't carry and pay the Obamacare fines thereby reducing your living stipend slightly and still likely falling under Medicaid once the hospital goes after them to pay or they carry private insurance, which wipes out most of the magic stipend.  Regardless, you haven't accounted for a significant cost and try to argue it away with "demographics in a decade or two" as if that means anything. 

Alstein


The reason we have social welfare is simple- without it you have a huge portion of people in poverty, then you get the Arab Spring in the US.  When 90% of the population has no stake in a society, it fails.   The whole point of the social welfare system is maximizing net social benefit to avoid such a scenario, it's a duty government has for its citizens.
 

Spare me this "Arab Spring" in the US nonsense.  Aside from some Occupy Wall Street types who are out to protest because they want to protest there won't be riots in the streets because of poverty in this country.  Poverty in the US is incomparable to the poverty in third world countries.  Aside from maybe the poorest inner city poor and the poorest in upper Appalachia your average America "poor" person is richer than 99% of the people in those countries.  This is half the problem with this discussion.  We can't have it without hyperbole because "it's for the poor people".  Poor here and poor there aren't even remotely the same thing.  Pretending otherwise is disingenuous.  


Alstein


Also, Capitalism didn't result in an increase of life quality for the lower classes until the union movement started (pre-Industrial revolution living conditions were better for the lower classes than Gilded Age living conditions for lower classes, it was only the middle and upper classes that benefitted)- it literally took a fear of Communism in both the US and Germany for things to change.   I'm not saying Communism is a good system, it failed because it was as extreme as Objectivist "captialism"  ideology- you need a balanced approach that uses capitalism but adjusts for its limitations and flaws.

 

Capitalism absolutely resulted in the increased quality of life for the lower classes.  Just because it took a time for the benefits to spread throughout society doesn't mean it wasn't the overall cause.  Every invention that has ever improved quality of life has started out only being available to the wealthiest in society.  This isn't a function of capitalism.  It's a function of human nature.  As new inventions become cheaper with the advent of new technology those inventions become commonplace and affordable to more people.  That is exactly capitalism at work and exactly why the rate of improvement in quality of life has improved so much under capitalism.  The fact that anyone can get Chemo drugs or HIV medication or an MRI or a fancy TV or a computer or one of any of thousands of other life improving items is due to the incentive in capitalism to bring new items to as many people as possible in an effort to maximize the reward from that invention.  

I don't claim capitalism is perfect.  But pretending that capitalism is somehow not one of the single greatest ideas mankind has ever had is nuts.  Without it you and I can't argue it over this computer for a whole host of reasons. 

Besides the fact that what we have now is hardly approaching real free market capitalism.  That's half my argument.  Progressives and their ham-handed "feel good" regulations have distorted the system now to the point that we're closer to corporatism than democracy and capitalism side-by-side.  Regulation helps the big corporates, virtually always by protecting them from the little guy with the better idea (the free market part of free market capitalism).  I'd argue that I'm the one advocating the balanced approach not you.  You're stance is one of advocating for more government action always because that's what these magic bullet ideas always need.  Always more action, more tweaking, to get the system perfect, without ever going back and getting rid of the old idea in the first place.  

on Aug 16, 2013

Can't tax machines Brad.  Just say'in. 

on Aug 16, 2013

Hehe.  At 16 I worked for $1US an hour chipping cement from the foundations of buildings.  at 18 I got a job  that eventually went to $3 an hour at an iron works shop.  Then got drafted and decided to stay my 20 because I wanted a retirement check before I was dead(that is if I didn't get killed in a war).  Now I'am glad I'am in my mid 60's because I don't want to see whats comming for the kids of today(if theres no nuclear war).  They will be killing each other for the scraps(be it food or jobs).

on Aug 17, 2013

I'm not arguing that capitalism didn't do good, my argument is that there have been times where it has done more harm than good.

 

Most of those times have come from when it got distorted.  What you're arguing is the free market doesn't distort capitalism, what I'm arguing is that capitalism can lead to failed markets in many cases, which can only be fixed by intervention. 

 

Sometimes I wonder if I should have stayed in and done 20, but I had a strong suspicion that due to the changing labor market, the deal folks got when they got in would be reneged upon, and I would have ended up doing it for nothing.

 

 

on Aug 17, 2013

CEO's who make 1,000 times what their workers make: 1. Ron Johnson, JC Penny's 2. Michael Jeffries, Abercrombie & Fitch Co. 3. David Simon, Simon Property Group 4. Larry Ellison, Oracle 5. Howard Schultz, Starbucks 6. Leslie Moonves, CBS Corp.

The average is 273 times what the workers make.

Corporations call their workforce "costs". They aren't even regarded as people.

Corporations are sitting on a trillion dollars they've hoarded. They aren't investing in the economy. They aren't growing the workforce. The greed is out of control. They say they are uncertain about future growth and taxes but it's all a bunch of shit.

 

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