In a prescient article dated September 08, 2014 – Minimum Wage and the Law of Unintended Consequences we spit into the wind and issued an Amber Alert for sanity regarding the minimum wage. To refresh:
When the required legal minimum wage exceeds the market wage, it becomes more cost-effective to fund technological advances to replace employees.
Unfortunately, too many people were too busy attending the Lemming Effect seminar to consider the consequences of their actions and “Fight for $15” is still gaining momentum on the path to the cliff.
Today, (figuratively in case you are reading this yesterday or tomorrow) McDonald’s Says Goodbye Cashiers, Hello Kiosks
“As of 2020, self-service ordering kiosks will be implemented at all U.S. McDonald’s locations. Other chains, including fast-casual brands like Panera and casual-dining brands like Chili’s, have already embraced this trend.”
This hypothetical example explains how the minimum wage impacts technology decisions.
“When signing a bill that will raise California’s minimum wage to $15 per hour by 2022, Governor Jerry Brown was very observant. Brown said, ‘Economically, minimum wages may not make sense. But morally, socially and politically they make every sense.’
Unfortunately, those who will suffer most are the young and low-skilled… the very people such laws are meant to help. In fact, Governor Brown knows this well. In 2014, he said that raising the wage would ‘put a lot of poor people out of work.’”
Higher labor costs render low-skilled workers unemployable as it removes their key competitive advantage—cost.
Why do Brown and other politicians who purport to be the champions of the poor, young and minorities continue to support minimum wage laws knowing that they cause job losses, decrease work hours and reduce opportunities for those very people?
“Because, politically they make every sense.”
First, to the young and naïve, “Minimum Wage” is “Free Lunch.”
Secondly, many union contracts are indexed to the minimum wage. So, while the politicians are schtüping the naïve, poor and young, they are making political hay with union workers.
Thirdly, you may ask, “why do politicians care about union workers?” Well, union workers do represent 14 million votes, but that is just a nice side benefit. The real reason is
Tah – Dah – Money
Fourteen of America’s 25 biggest campaign donors are labor unions and something like 93% of their donations go to Democrats.
In addition to campaign donations, from 2010 to 2016 alone, labor unions sent more than $1.1 billion in member dues to anti-Republican advocacy groups.
Mystery solved! It was Professor Plump in pantry, porking the poor while pandering to unions to plunder their piggy banks for political payola. Pffffttt!