San Diego’s minimum wage experiment accelerating adoption of automation

San Diego raised its minimum wage very rapidly. Data suggests that while the wage hike benefits those with minimum wage jobs, it is also rapidly eliminating low wage jobs all together. Read the entire (and long) story for the details.

This blog has long noted that while automation is going to happen regardless, rapid minimum wage hikes accelerate the adoption of automated systems, eliminating jobs more rapidly:

And California’s decision to speed Darwinian selection also encourages automation. McDonald’s is rolling out ordering kiosks, Starbucks is testing robotic baristas, and hamburger-making machines are nearing production.

One local restaurant owner told me that all his future locations will allow customers to buy and pour their own beers.

A 50-handle system costs $1,800 per handle. That’s well above $1,000 per handle for the bartender-based system, but it pays off in a year by eliminating one or two workers per shift. Presumably someday robots will listen to our problems, too.

Rising productivity is good for the bulk of consumers, because fewer workers equate to lower bills.

Source: Is San Diego’s new minimum wage already hurting its poor? – The San Diego Union-Tribune

Eliminating jobs through automation is not necessarily a bad thing. ATM machines, self service gas, self service check outs are all examples of recent semi-automated services that we take for granted. Throughout history, many jobs have gone away – elevator operators and telephone “manual switch” operators all went away.

If automation frees up labor to be put to more productive uses, this is a good outcome. However, there will be some who are not able to transition to higher value added work and may be come unemployable.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s