I have seen the future, and it’s a tablet computer that does not want to be paid $15 an hour.
Los Angeles is the latest municipality where politicians are considering buying votes by mandating a $15 per hour minimum wage. That’s actually a ban on workers taking jobs for $12 or $14 per hour, but it sounds compassionate when reduced to slogans and finger-wagging at “greedy”businesses. New York is poised to implement $15 per hour as the minimum wage for fast food workers state-wide. And Vice President Joe Biden is among the pols calling for a federal minimum wage hike–to $12 per hour, in his case (not that he himself is worth that much).
But you know what? Businesses are way ahead of them.
I took my son to Chili’s for lunch today. On the table was one of the 45,000 Ziosk tablets (it may be more by now) the company had in place over a year ago. The widgets let you order drinks and desserts and pay your bill without flagging down a server. They also offer some entertainment options. Chili’s swears up and down that no server jobs are at risk because “we’d never want to lose our awesome Team Members,” But I bet Chili’s doesn’t want to lose money, either, and it would risk that if labor costs go through the roof. The device is obviously one software upgrade away from letting customers order everything electronically, which could potentially reduce server needs to one or two backups for the old-school customers who don’t want to use a touchscreen.
So…What do you think is going to happen if the move for a massively boosted minimum wage goes nationwide?
Unshockingly, a report released today says that lots of jobs are on the chopping block if the government tries to create prosperity out of thin air by hiking the minimum wage. The report, by Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, and Ben Gitis, director of labor-market policy at the American Action Forum, says that “increasing the federal minimum wage to $15 per hour by 2020 would affect 55.1 million workers and cost 6.6 million jobs.”
A lower hike would be “better” in the sense of doing less damage. Boosting the minimum to $12 per hour “would cost 3.8 million low-wage jobs.” Which sucks less. Under either scenario, only a tiny percentage of gains would be enjoyed by those in poverty–at the expense of jobs and paychecks.
Business owners are neither stupid nor suicidal. They listen to the political rhetoric coming out of demagogues’ mouths and they make contingency plans for surviving the policy flingings of the simians we elect to office. Those Ziosks on the table aren’t just gee-whiz toys;they’re hedges against the future.
In San Francisco, where the $15 minimum wage is already law, innovative startup Momentum Machines has a plan to completely mechanize fast-food restaurants from the kitchen to the table. The company notes, “An average quick service restaurant spends $135K every year on labor for the production of hamburgers. Not only does our machine eliminate nearly all of that cost, it also obviates the associated management headaches.”
But the headaches for unskilled workers trying to get a foothold in the job market are just beginning.