Rising minimum wages make automation more cost-effective

The movement pushing for a $15 per hour minimum wage has succeeded in several large cities like New York, Los Angeles, San Francisco, and Seattle. These minimum wage increases coincide with falling prices for computers that can replace human labor in some low-skill jobs. A higher minimum wage changes cost considerations for businesses seeking to automate more of their operations. Increasingly, low-skill workers will not only have to compete with each other for jobs at higher wages, but also with computers. Staying competitive in a changing job market will require workers to specialize in tasks that computers cannot easily perform.

Rising minimum wages make automation more cost-effective Restaurant_kiosk_16x9

Rising minimum wages make automation more cost-effective Restaurant_kiosk_16x9

Two trends converge

The federal minimum wage, currently set at $7.25 per hour, is not tied to inflation, so Congress must periodically raise it to maintain its value. At the state level, only 10 states have minimum wages that increase annually with the cost of living; a further five states and the District of Columbia will introduce annual increases in the future. These annual increases forgo the need for large adjustments to the minimum wage at irregular intervals. In addition to benefiting workers, it would allow employers to slowly adjust to wage increases. If the price of labor rises too quickly, businesses have a bigger incentive to replace human labor with automation technology.

http://www.brookings.edu/blogs/techtank/posts/2015/09/30-minimum-wage-and-automation

Rising minimum wages make automation more cost-effective

Rising minimum wages make automation more cost-effective

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