One of my roommates from college used to work for McDonald’s.
He knew the ins and outs of the fast food restaurant. Which would really be useful when we would go to McDonald’s late at night to get a break from school (or gaming).
“Don’t get the double cheese burger,” he would say, “The only difference between that one and the double burger is the amount of cheese.”
But he would also have some advice for the McDonald’s employees who protested their wages.
“I worked at McDonald’s, the work I did wasn’t worth $15 dollars and hour. The reason you get paid what you do is because your labor isn’t worth much.”
My roommate understood the folly of the #RaiseTheWage crowd, especially the ones who worked at McDonald’s.
He also knew that pretty soon they’re jobs would be threatened by the coming automation.
The Coming of the Machines
What if you could come home from a long day at work and have a full meal ready for you?
In the past this was done with hired chefs, or your wife, but those might soon be replaced with the Robochef.
A robotic chef with the ability to dice onions, mix ingredients, and ultimately prepare whole meals. All in the comfort of your own kitchen.
Granted, this technology is still in the making, but it shows how far the automation age is progressing.
Look at self-driving cars. Google is quickly mastering that area of automation.
What about diagnostic and surgery robots? More and more robots are being implemented in high-tech hospitals across the country.
It’s safe to say that this trend will continue.
#RaiseTheWage is a Call to Automate
What happens when you combine a growing automation trend with a growing minimum wage movement?
An economics lesson for one, and an ironic story next.
Low wage jobs are that for a reason. The job you’re doing isn’t worth a higher wage.
WARNING: quick economics lesson coming…
It’s supply and demand. You have a job that any capable person can do. It’s simple, and doesn’t require much education.
So, here’s where we’re at…A high supply of workers, coupled with a steady demand for workers, and you get low wages.
Imagine what would happen if the minimum wage was raised to $15. That means employers would pay more for a standard job than the market average.
If your labor is worth $8 that means your employer is now losing money by hiring you.
There’s three ways to fix this. Either A) downsize, B) find a way to replace your low skilled workers, or C) throw the costs onto the customer.
Each option is going to hurt someone, which is where the irony comes in.
The #RaiseTheWage folks are essentially incentivizing businesses to downscale or automate their low skilled jobs.
The movement is practically setting itself up for a self-inflicted homicide.
Entry Level Jobs are Unstable
These low skilled jobs are already unstable as it is. They’re always the first ones to get hit when a company needs to downsize.
They’re even more vulnerable to automation.
McDonald’s is already testing the idea of automatic cash registers in some of their stores. In Europe, they’ve already bought 7,000 touch-screen kiosks to handle cashiering duties in their stores.
Four stores in California are testing touch-screen kiosks for McDonald’s new burger customization program (a program I’m very excited for by the way).
Other low skill jobs like telemarketers, sewers, and butchers are in danger of being automated too.
This trend isn’t restricted to the fast food industry. It covers a broad spectrum of careers and industries, all with the potential to shake up the job market status quo.
McDonald’s Isn’t Stupid (& Neither are Their Automatons)
Like all good intentioned policies, the unintended consequences are harder to see.
The minimum wage hike is no different.
The minimum wage movement might think their main enemy are selfish-business-loving “right-wingers.” Unfortunately for them, we’re the least of their problems.
Businesses are a problem.
Companies like McDonald’s aren’t stupid. They won’t blindly give into grassroots demands.
Regardless of what the “experts” say, minimum wage laws will hurt businesses.
Businesses will counter this with their own bag of tricks, as they always do.
As a Businesses, you’ve got to learn to adapt.
You either adapt, or die off.
The second enemy are robots.
As automation becomes more widespread, more minimum wage cheer leaders will find it hard to get the money to buy their pom-poms.
That means they’ll be out of a job.
If it’s no longer profitable to pay you to flip burgers, I’ll just buy a robot that can do it faster.
A $15 hour wage definitely makes a burger flipper unprofitable. Again, the movement is literally killing itself.
Sooner or later, humans will be outdated, and robots will replace them.
The Machines are Just Around the Corner
Pushing minimum wage laws is like taking off the protective fence that keep suicidal people from jumping off of roofs.
Bad things are going to happen sooner or later.
Economically, the minimum wage makes no sense.
You can’t expect businesses to pay a worker more than their labor is valued at. It’s unrealistic.
Small business owners will be hit the hardest. And big companies will just downsize their low skill jobs.
However, the fuel really gets added to the fire with the automation trend.
There’s already talk that it’s causing job loss. Why help it by increasing the minimum wage?
New technologies are “encroaching into human skills in a way that is completely unprecedented,” McAfee says, and many middle-class jobs are right in the bull’s-eye; even relatively high-skill work in education, medicine, and law is affected. “The middle seems to be going away,” he adds. “The top and bottom are clearly getting farther apart.” While technology might be only one factor, says McAfee, it has been an “underappreciated” one, and it is likely to become increasingly significant.
The #RaiseTheWage movement is meant to help people. I get that. I get where they’re coming from.
It’s hard to raise a family when you’re earning $7.50 an hour. It’s hard moving up in life when you’re making next to nothing.
The movement is filled with good intentions. Good intentions that will ultimately harm the people they wanted to help the most.
In the end, the movement might accomplish their goals only to find that they’ve shot themselves in the foot.
And they’ll be added to the long list of socio-political movements that ended up dying by its own hands.