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Free Minds & Free Markets

Minimum Wage: Bad for Humans, Good for Robots

Outlawing cheap labor comes with a lot of disastrous consequences.

Some of America's largest cities are ratcheting minimum wage up, while progressive luminaries are calling to raise the federal minimum wage to $15 an hour. Only evil people would oppose this, right?

Unless...That's what the robots want us to think?

When the government uses minimum wage laws to abolish cheap labor, it makes employees more expensive. Intentions aside, this compels businesses to reduce hours, lay off employees, or automate them to save on costs. The Congressional Budget Office estimates that raising the minimum wage to a mere $10.10 per hour would result in half a million people losing their jobs.

In the latest Mostly Weekly Andrew Heaton explores the minimum wage, and why the feel-good legislation comes with disastrous effects.

Mostly Weekly is hosted by Andrew Heaton with headwriter Sarah Rose Siskind. Watch past episodes here.

Script by Andrew Heaton with writing assistance from Sarah Rose Siskind and David Fried
Edited by Austin Bragg and Sarah Rose Siskind.
Produced by Meredith and Austin Bragg.
Theme Song: Frozen by Surfer Blood.

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  • Quo Usque Tandem||

    This guy just doesn't get it. Inflationary minimum wage will also require the next shoe to drop; mandatory employment. You'll HAVE to keep them on no matter how much they cost.

    This message rought to you by the Robert Mugabe [Ph.D X 18] School of Economics.

  • dantheserene||

    Remember the tire factory in France that was outmoded and produced tires of a type that wasn't in demand? The government and unions wouldn't let the owner close it because to them the purpose of the factory was to produce taxes and union jobs, respectively. Tires weren't even a consideration to the ones in power.

  • ImanAzol||

    I'm voting for $50 an hour. I always wondered what a $200 cheeseburger tastes like.

  • ||

    Go down under. $15/hour minimum gets you a $25 Big Mac.

  • SQRLSY One||

    The greed and hypocrisy of top corporate management has been thoroughly documented, and I'm not trying to apologize for them, for that. But in all fairness, we should understand their perspective. The government does not require many (if any) benefits be paid to robots, nor require safe operating environments (for the robots as opposed to humans). Limited protections for humans is good, but have we gone too far? Corporations are required to pay Social Security, workman's comp, unemployment, self-esteem therapy, and tons and tons of insurance mandates for the humans. Whether or not I need or want (or object to, on a religious basis) alcohol and drug abuse therapy, organs transplants, sex assignment changes, or space alien abduction therapy, a lot of all this stuff is mandated, in insurance coverage. No opt-outs and price cuts for you, or for me! But not so for the robots! Should it be any surprise that the robots are taking our jobs?

  • SQRLSY One||

    I am thinking that we should disguise ourselves as robots, and assign ownership of our robotic selves to a trusted friend or family member. Trusted human owner (of myself) can then collect rental fees on me, take a small administrative fee, and kick the rest back to me! Problem solved! Now I can be allowed to compete with the robots, if I desire to bypass all the mandates!

  • Rich||

    we should disguise ourselves as robots

    NO!! Come out as a self-identified robot!

  • Longtobefree||

    or just become a 1099 self employed contractor. same thing.

  • BYODB||

    Amusingly, replace 'robot' withy 'illegal alien' or 'Visa worker' and it's still more or less accurate.

  • ||

    The obvious solution is to mandate the teaching of H.S. Algebra to all "robots". Pointing out the fact that the schools themselves and the teachers who staff them are paid for with the on the ill-gotten gains from land/property owners, which robots tend not to be, just shows how much you hate "robots". And liberty. And property rights.

  • BYODB||

    No idea what your point is. I was just noting that a black market for labor is bound to result from an over-regulated legitimate labor market.

  • BYODB||

    I think reason might have eaten my comment, but I'm not sure what your point is. I was just noting that if you over-regulate a legitimate market a black market is sure to spring up.

  • BYODB||

    god damn it, reason.

  • afk05||

    Sadly, this can be attributed to one of Friedman's less than stellar theories on shareholder value. It was a supposedly libertarian argument for maximizing profits and shareholder value over the actual profitability of a company (Jack Welsch rings a bell) or regards for their workers. It has, in effect, has capitulated the level of corporatism in our country and has stagnated wages for over 3 decades. Why treat your workers better, pay any higher salary than necessary based upon competition or provide a better product when you can just jack around with the stock price and financial reports? Once executives have become accustomed to massive salaries, bonuses, stock options and severance packages, they won't just accept less than that.

  • Rich||

    The Congressional Budget Office estimates that raising the minimum wage to a mere $10.10 per hour would result in half a million people losing their jobs.

    Meh. What does "Watson" think?

  • EscherEnigma||

    0.5 million jobs lost? That sounds big.

    But not as big as the 3.5 million trucker jobs that are going away to automation regardless of the minimum wage.

    Or the other 10.3 million† jobs that are expected to go away to automation regardless of the minimum wage.

    In that context, I'm forced to conlude that if Reason wants to argue that both (A) minimum wage is bad and (B) automation is good (or at least not something to worry about), then (C) they should focus on arguments that don't pit the two against each other as this one does.

    To put it simply, if I'm not worried about 13.8 million 013† jobs lost to automation regardless of minimum wage, then I'm not going to worry about 0.5 million lost to minimum wage. And conversely, if I'm worried about 0.5 million jobs lost to minimum wage, I'll probably worry about 13.8 million jobs that are lost regardless.

    So chose which message gets the "job loss" argument, and quietly don't mention it ever again for the other message. As is, you're posting at cross-purposes.
    ________
    †Article a few days ago cited 9%, which is 13.8 million today. Taking out the 3.5 million truckers leaves 10.3 million.

  • BYODB||

    Yeah, except that those numbers rely on magic to make any of it come true. They assume that magic exists, so their numbers are suspect at best.

    Oh...were you trying to say that A.I. and self-driving cars are going to be on the road in significant numbers within 20 years? Hold on, I can't hear you over the wind in my flying car...

  • EscherEnigma||

    My main point is that Reason is pushing two competing narratives, and that better coordination could reduce the dissonance.

    But your head-in-the-sand approach is cute too, I suppose.

  • BYODB||

    Sorry, I still can't hear you over the wind in my flying car

    There are these things called boondoggles and lies.

    Also, for the record, I'm not the one quoting unemployment numbers resulting from a technology that doesn't exist yet. Recall that flying cars, such as the article linked, have been talked about since at least 1926 and have been successfully tested. Still can't drive one, though.

    I'm sure this time will be different from most other times though. After all, all we need to do is program a perfect machine to account for imperfect and unpredictable human action. How hard could that be, amiright?

  • EscherEnigma||

    That's not your flying car, it's the air whistling through your ears where something else ought to be.

    Childish jabs aside, my point was about rhetorical strategy in persuasive writing. The actual content is irrelevant.

  • BYODB||

    You know who else collectivized a bunch of writers with varied viewpoints who happened to write for the same publication?

  • BYODB||

    And, bonus round, would you expect a magazine who's overarching theme is individual autonomy to be lock-step among it's writers? Do you think that, for example, Dalmia is actually libertarian?

  • Trainer||

    Where actual content was irrelevant?

  • Tony||

    It all makes sense when you realize the point isn't making life meaningfully better for workers but making life marginally, unnoticeably better for their bosses (whatever the cost!). Why does an entire political philosophy lobby on behalf of the ones who're already doing fine? Because they're assholes is my guess.

  • ||

    Thank God Tony showed up! Those straw men weren't going to burn themselves!

  • Tony||

    Pop quiz hotshot. You have to vote for one or the other: a war base on lies that will kill hundreds of thousands of civilians, or a 0.1% increase on the income tax for billionaires. What do you choose??

  • ||

    I fail to see the relevance of your question to anything at all.

  • Tony||

    But it's a pretty easy one right?

  • ||

    But it's a pretty easy one right?

    Yes. Which is why you formulated it that way.

    Sort of like if I ask "what do you prefer, a police state watching your every move and making every decision for you, or a marginal cut to a billionaire's tax rate?"

    Easy choice, right?

    Also a completely irrelevant question to ask.

  • Kefka||

    The relevance is obvious there is a basic concept in economics call a trade off. That is why answering the "is" or "positive" question of: does raising the minimum wage decrease the demand for unskilled laborers? (for the sake of argument assume it does) does not answer the "ought" or "normative" question of: should we raise the minimum wage?

  • ||

    I understand the concept of a tradeoff. That doesn't make the question from Tony any less dishonest or moronic.

  • BYODB||

    I like how even in your example you mention it's a war based upon lies, and that the alternative is some supposedly miniscule increase on someone else's taxes, but that in both scenario none of it actually has anything to do with the individual making the choice.

    What would you prefer? Being shot in the face, or stabbed in the heart? Easy choice, right?

  • Tony||

    Well I guess thank you for making my point.

  • Sevo||

    Tony|9.7.17 @ 4:19PM|#
    "Pop quiz hotshot."

    Pop quiz, shitbag:
    When will you stop beating the little old lady down the street?

  • Malvolio||

    3.5 million trucker jobs are going to be replaced BY OTHER JOBS.

    Yes, the actual truck driving will be done by robots, but all that savings (from hiring robots, from not repairing all the damage done by human-caused crashes, etc), creates new demand. The total employment level stays the same.

    The half-million jobs are gone. Some of the work may be done by robots, some will be done by more skilled workers, some will be left undone. Unemployment actually goes up.

  • afk05||

    But what jobs will uneducated, uneducated truck drivers do? I'm not one to panic over numbers or speculation, but our government does not have a great track record with transitioning economies (Smoot Hawley for example), and someone, private industry that manufactures/benefits from automation perhaps, needs to focus on how to retrain unspecialized workers to be able to work the jobs created by automation. We started crying about lack of STEM education at least a decade too late.

  • Longtobefree||

    I predict that the teamsters beating the crap out of you will be able to discuss politics, philosophy, mathematics, and the finer points of most sports.
    Hardly uneducated. They can maneuver through thousands of pages of federal and state by state regulations, can you?

  • DevilDog943||

    I don't think it is a matter of rank-and-file Teamsters being able to maneuver through the regulations as it is a matter of their hired lobbyists and lawyers doing so. Judging by the antics of truck 'drivers' on the road (as seen on a daily basis), they are VERY slightly smarter and more capable of 'driving' than the supreme idiots in cars, pickups and SUVs.

  • creech||

    $15 an hour is what pikers like Sanders and Clinton advocate. Those truly woke to social injustice would be advocating $25 an hour or even more. Still, there would be some folks who couldn't live on $25 so what we really need is for each worker to name his own living wage.

  • Zeb||

    I still want to know where all these people are who are failing to live because they only make $10/hr.

  • EscherEnigma||

    On welfare, generally. Most welfare recipients have jobs.

  • BYODB||

    Part time jobs, and due to the ACA regulations (among many, many others) there's a real incentive for employers that hire no-skill to low-skill labor to only hire part timers since they're literally not worth the lowest rate PLUS benefits.

  • Berserkerscientist||

    Only about 20% of those making minimum wage are in poverty. Minimum wage increases are an inefficient way to solve poverty.

  • some guy||

    They aren't so much failing to live as they are failing to live a middle-class life. Remember everyone should make enough to support a middle-class family of 4. It doesn't matter if you're a pensioner, a student or traveling the world on the cheap. You still need to make enough to support a middle-class family of 4.

  • Longtobefree||

    Yep, everyone should be above average.

  • DevilDog943||

    I cannot recall the specific person, but a Democratic political candidate some years past actually made that a campaign slogan, 'We must continue making progress until everyone has an above average income'.

    As stupid as this sounds to any person capable of critical thinking, it makes a good appeal to the heartstrings of the average political idiot.

  • Tony||

    Sounds pretty shitty to me.

  • some guy||

    It really is best to legislate as if everyone in a population is experiencing the most extreme of situations. Then everyone actually will be experiencing the most extreme of situations and we'll have finally achieved true equality before nature.

  • ||

    Step 3 is always 'Profit!' you don't have to wait or be surprised about what step 3 is or will be.

  • some guy||

    The robots don't really care. (Yet.) But it is good for the owners of the companies that make the robots and their shareholders and the last human, who feeds the dog, and the dog, who keeps the last human from touching the robots.

  • Tony||

    Unless your voodoo math somehow makes it so that abolishing minimum wages makes burger flippers' paychecks larger rather than smaller, then abolishing them is not good for humans.

  • EscherEnigma||

    Oh, there are ways to do so, but Libertarians wouldn't be happy with those ideas either. In any case, Libertarians, as a group, aren't really concerned about what's "good for humans"†, so I expect your jab will fall flat.

    ______
    †To be fair, the philosophy asserts that if everyone were free to act in their own best interest, that everyone would be "lifted up". But it also is skeptical that intentionally helping folks can actually work. Which is why you see libertarian policies/proposals that free people to do what they want and just kind of assuming the beneficial side-effects.

  • ||

    But it also is skeptical that intentionally helping folks can actually work.

    No.

    It is skeptical that forced helping of folks can actually work.

    Why is this concept so difficult for some people to internalize?

  • Tony||

    Because unless you're an anarchist, you want to "force" me to "help" you keep undesirables off your lawn and protect you from foreign invaders. The taxes to pay for the shit you're OK with are extracted in the same manner regardless of what they end up paying for.

  • ||

    And so?

    That means forced charity can work?

  • Tony||

    I don't consider taxing and redistribution to be either forced or charity. More like the backbone of any civilization you'd want to set foot in.

  • BYODB||

    So if you don't pay taxes, what happens?

  • Tony||

    The same thing that always happens when you steal shit.

    You wake up every morning using government services taxes pay for. What is it you people say about free lunches?

  • BYODB||

    So, what you're saying is that since you pay likely zero taxes but use services that you should be put in prison? Very noble of you, Tony.

    And for the record, most people pay zero or negative taxes. Retard.

  • Tony||

    Most people pay no taxes? Really?

    Is it that you're ignorant of the fact that income tax isn't the only tax, or are you just a liar?

  • ||

    The same thing that always happens when you steal shit.

    What if the "shit" that you're "stealing" is "shit" that you didn't actually ask for and tried to refuse?

  • Tony||

    You didn't try to refuse shit. You are perfectly welcome to go off the grid and use no government services and pay not taxes. You just don't want to.

  • Sevo||

    Tony|9.7.17 @ 4:43PM|#
    "I don't consider taxing and redistribution to be either forced or charity."

    I've saved that tony, for when someone suggests you're not really among the dumbest shits to ever draw a breath.

  • EscherEnigma||

    Why is this concept so difficult for some people to internalize?
    Well for one thing, I'm not a libertarian and have no intention of "internalizing" any libertarian message. I'm here to learn what you folks think, not to change my own values.

    More broadly, some of you do make that distinction, and promote the idea that voluntary charity can fix everything if government would just get out of the way. But far more prevalent in my observation is skepticism towards any charity/altruism, regardless of whether it's forced or voluntary.

    And regardless, if you feel like quibbling over details that just tells me the portrait is largely accurate.

  • BYODB||


    I'm here to learn what you folks think, not to change my own values.


    Sorry bud, if that's why you're here you're already failing. If this was actually true I'd suggesting reading a book instead of a news publication. I do like how you've established that no matter what the libertarian position is, you have rejected it prejudicially.

  • BYODB||


    More broadly, some of you do make that distinction, and promote the idea that voluntary charity can fix everything if government would just get out of the way. But far more prevalent in my observation is skepticism towards any charity/altruism, regardless of whether it's forced or voluntary.


    So it appears that you don't believe in charity? I'm also curious how you could define something as 'charity' in the first place when it is not voluntary. Even you should note that it becomes something else at that point by definition.

  • ||

    Well for one thing, I'm not a libertarian and have no intention of "internalizing" any libertarian message. I'm here to learn what you folks think,

    If you were actually here to "learn what you folks think," then you would "internalize" the message that we are skeptical of forced charity, not of voluntary charity.

    But, as BYOB points out, clearly you are not, in fact, here out of any interest in other people's opinions.

  • Sevo||

    "More broadly, some of you do make that distinction, and promote the idea that voluntary charity can fix everything if government would just get out of the way."
    I see you really haven't learned anything.
    No, neither charity or government can 'fix everything' gov't just serves to fuck it up even more.

    "But far more prevalent in my observation is skepticism towards any charity/altruism, regardless of whether it's forced or voluntary."
    If it's forced, it's not charity. And there are many reasons to be skeptical of those claiming to be charitable; Southern Poverty Law Center, for example.
    But to those who are here to oppose libertarianism are more than willing to distort any view point, right?

  • ||

    Unless your voodoo math somehow makes it so that abolishing minimum wages makes burger flippers' paychecks larger rather than smaller, then abolishing them is not good for humans.

    I thought you were in favor of Scandinavian socialism? You keep reprimanding us here for supposedly refusing to consider any aspect of it.

    Did you change your mind?

  • Tony||

    Did you even bother to read that?

    "The truth is most developed countries that have no legal minimum wage still have minimum wages set by industry through collective bargaining contracts. The majority of their working populations are unionized."

    How do you feel about unions in this counry again? Something about they're fine as long as they have none of the leverage they require to function?

  • ||

    What part about the lack of minimum wage laws did you miss?

    What part of libertarians have no problem with voluntary union membership did you miss?

    So - you're not a fan of Scandinavian socialism after all?

  • Tony||

    Not being a dogmatist I don't particularly care about the policy route to improving human well-being. But it seems that we either need a minimum wage or very strong unions. We don't have very strong unions, because the same free-market dogmatists in capital cities who hate minimum wages also hate unions. Maybe even more so since they have been so much more effective at eradicating those.

  • BYODB||

    In other words, Tony just says whatever sounds good at the time but he understands essentially none of it.

  • ||

    In other words, Tony just says whatever sounds good at the time but he understands essentially none of it.

    ^ This.

    The eternal chant of just-proven-wrong Tony:

    "Not being a dogmatist I don't particularly care about the policy route to improving human well-being."

    Not that this in any way discourages him from endlessly berating us for failing to adhere to his policy dogmas - for note that while he acknowledges that he's 100% wrong about the necessity of a minimum wage, he still declares himself to have been 100% right.

  • buybuydandavis||

    Repeat after me:

    The minimum wage is $0.
    The minimum wage is $0.
    The minimum wage is $0.

  • babybird722||

    Interesting ignoring of facts and years of studies that show that raising the minimum wage to $12 will increase costs by $1 a year to consumers. Basic supply and demand dictates that when income for the poor increases, business revenue increases because expenses for one business is revenue for another. Americans, of all people should not fear innovation and we should embrace robots as a means to reducing work hours for everyone and increasing our quality of life. Innovation is not meant to, and should not be used to earn obscene profits for a small number of people while condeming large percentages of our population to poverty. What should be obvious to everyone, including those blinded by greed is that when large portions of the population are unemployed or are paid wages so low that they have no disposable income, ALL businesses suffer. It is no secret why Kmart, Sears, Penneys, and now Macy's can't earn a profit. Their customers are broke

  • Get To Da Chippah||

    So make the minimum wage $1000/hr. A full time employee would make no less than two million dollars a year, plenty to afford a comfortable living with lots of disposable income left over. Then we can tax them like the greedy one-percenters they are and have the money needed to solve all of the country's problems.

    DERP!

  • ||

    Focusing on laws fails to address the root of the problem. With bad laws, the blame goes to the politicians, not the system that creates/empowers rulers. That system is build on a superstition: the worship of force as concentrated in a few to be used on all, with impunity.
    The implicit assumption is "we the people" are infants who need parents, even if those parents are too strict or irrational or tyrants. Society becomes less stable by the use of force over reason, over principle. Rights are seen as political perogatives of those in power. In effect, there are no rights, no justice, just political power.

    All this socially destructive, struggle of group against group for power, starts when sovereign individuals forfeit their sovereignty to a few, and ask the few to take by force the sovereigny of those who would not join them. This insanity is immoral and inhuman, but called "law & order". Order does not come from initiated violence. It comes from recogition of principles, such as rights. Those principles cannot be left in the hands of an elite monopoly to enforce. Monopolies serve special interests, not principles, not rights.

    Therefore, do not blame the rulers, blame those who want to be ruled. Blame those who want to be told how to live and quaranteed peace & prosperity in exchange for liberty. Blame those who would accept anything rather than think for themselves and accept responsibility for their lives. They self enslave and drag all others down with them.

  • gordo53||

    Clearly, raising the minimum wage to $15/hr is an experiment. Regardless, $15/hr is not enough for a family to live on so let's do a more reasonable test. $20/hr or even $25/hr is a better number and if there is a fiscal downside it will be more evident. Bring it on.

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