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One of the adaptive responses to minimum wage increases

Posted: Oct 28, 2014

Businesses don't just sit idly by when wages are pushed up by artificial means such as mandatory minimum wage increases. They take one or more of a whole range of adaptive measures that are available to them to protect their profits - cutting staff, cutting the hours of staff, demanding more of existing staff, reducing non-wage benefits and investing in labor-saving automation.

What I didn't mention is that, from a purely fiscal "spreadsheet" standpoint, the greater the (actual or proposed) increase in the minimum wage that a company faces, the greater number of dollars it can justify spending on automation. And lower-skilled, lower-paid jobs are usually the easiest to automate.

So the more you push for a higher and higher mandatory (as opposed to market-driven) minimum wage, the more you incentivize companies to automate and the more damage you do to the lower-skilled/paid wage earner.

It boggles my mind that anyone in this industry would have to be told what the outcome of automation is and who it impacts (hint, the worker-bees). Simply amazing. No matter how "seductive" it might be to naively believe we can just pass a law and suddenly people are wealthier, IT DOES NOT WORK THAT WAY, and never has. People who tell you otherwise are deceiving you. If nothing else, the machinery of democracy depends on people who can't be led around by the nose.

Follow the link. And the next time somone presents any of the simplistic arguments that abound on all sides of the minimum wage question (often supported by false "numbers"), just smile and change the subject. The solutions to poverty and unemployment lie elsewhere.

;

Excellent post. - Now this is critical thinking.

[ In Reply To ..]
I especially like your 4th paragraph!

We did this to ourselves. - anon

[ In Reply To ..]
If you don't like working for 4 cents a line then why are you? I hear on this board all the time that "I'm not even making minimum wage." So why not go get a minimum wage job and make more money then? Doesn't that make sense?

If you're offered 4 cents per line, even 5-6 per line and you accept it then you have no one to blame but yourself. That is what happened to our business. The big companies got away with offering less and you took it.

I have been in this business for 20 years and I worked for a company some years back with VR. The first time I had to completely delete a report and retype it and only got 4 cents per line, I shut my computer off and I quit immediately. I lasted on that job 2 days.

I will not lower my standards for less pay. As I said I have been in this business for 20 years. I am still making good money doing straight typing, making 9.5 and 12 cents per line and as long as I am making that or more I will continue to do this work. But I will not do VR and that is that.

We let them again pull the wool over our eyes with oh we will go overseas for less. Well let them then. Keeping US workers on hand gives the companies big and I mean big tax breaks. Bye, bye tax breaks.

Draw the line in the sand and stick to it. If you want to work for pennies doing this job, hey have at it but I will not and I kept looking until I found a job that pays me what I feel is a good line rate. If you don't have respect for yourself the companies certainly won't.

automation - nana7

[ In Reply To ..]
They can automate all they want to at McDonald's, Lowes, all grocery stores or whereever but then when all the workers are out of work and cannot afford to buy groceries to go to Lowe's for anything who is going to pad their profits then? You think the millionaires will continue to make them their millions and millions in profits every year. So it is a double edged sword here. Put people out of work and they don't have money to put back into the economy, regardless if minimum wage goes up or not.

We went through this years ago in the auto industry and they said they were going to automate, which they did to some degree. My son in law works at GM and still makes $30.00 an hour and they are still hiring. I am sure you all heard that Ford will be putting on up to 1500 people by early next year. Did the automation put the auto workers out of work, no it did not.

Threats are threats and I believe that is all this it. A threat.

You have an option, if they automate and lay off their employees you have the option of not going to their establishment and if we all did that, what would happen to them? We do have some power, we are just too brainwashed to use that power in a way that makes them a difference. They want to hit out pocketbook, then we can hit theirs. We, the everyday people are the one's that made McDonalds or every other fast food restaurant who they are. We are the ones, the middle class that keeps Lowes and Home Depot in business. The lower and middle class. Its time we stuck together and made a difference. We are letting these huge greedy companies dictate what we need to do, so why don't we show them what we can do.

First time I walk into a store that has an automated greeter, I will turn around and walk out and go to a store that supports employing people. Thats what I will do. What will you do?

No job loss - Critical thinker

[ In Reply To ..]
We could talk about what people on either side think will happen with a minimum wage increase.

Or, we could look at what has *actually* *happened* after such increases:

Several links, so you'll have to copy and paste them into your browser. Short version: increasing minimum wage hasn't had the negative impact on jobs that conservatives have been warning about.

http://thinkprogress.org/economy/2014/07/03/3456393/minimum-wage-state-increase-employment/

http://www.npr.org/blogs/thetwo-way/2014/07/19/332879409/states-that-raised-minimum-wage-see-faster-job-growth-report-says

http://www.raisetheminimumwage.com/pages/job-loss

http://seattletimes.com/html/localnews/2023116005_wageimpactsxml.html

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