Increasing minimum wage leading to more automation

If workers can keep their jobs, they’ll enjoy higher wages. But rising labor costs are pushing employers toward robots.

Source: California’s $15 minimum wage may mean more automated jobs | The Sacramento Bee

Automation has been coming and is coming, regardless of minimum wage hikes. However, large mandated wage hikes encourage rapid adoption of automation.

When automation is introduced, businesses often re-think their business processes too and invent more efficient ways to get things done.

The combination of automation – and improved business processes –  reduces the labor required just as the costs of automation are plummeting.

Mandated wage hikes lead to automation and improving business processes – which leads to greater economic efficiency. But it also leads to the loss of low wage jobs.

If workers retrain to add more value, this can be a positive development. However, for a variety of reasons, many workers will not improve their skills to add more value and end up out of work.

The bottom line is minimum wage hike laws are speeding up investment in automation and improvements to business processes that lead directly to low wage, low skilled job losses.


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