The End of Service Jobs?

Photo credit: James Vaughn

Photo credit: James Vaughn

It’s that time again. Time for America to once again be overtaken by calls to raise the minimum wage. In some places, Seattle for example, the clamored-for rate is as high as $15. And while all’s not yet said and done, we can rest assured that we won’t make it out of the regulatory push without the minimum wage being hiked in most places.

I’ll spare you the usual prattle of the consequences of raising the minimum wage, such as employers hiring fewer workers and more jobs going under the legal radar. I’ll even spare you the moral arguments against using the threat of force to prevent a peaceful, voluntary business exchange. No, I’m here to talk about something altogether: robots.

That’s right. When human labor becomes too expensive, you can bet your social justice-seeking bottom that businesses will try to find another way of getting work done. And it seems like they have their answer, in the form of a burger-flipping robot. This little bad boy named Alpha can crank out 360 burgers an hour, and can save a business enough money to pay for itself in a year. There’s no competing with that. Pretty soon, faced with increasing labor costs because of minimum wage laws, service jobs traditionally held by the poorest of the poor will disappear entirely.

What’s a fair living wage? $9 per hour? $11? $15? How about zero?

Comments

  1. You won’t like this reasoning, but it’s unavoidable. The end result of a world in which machines are able to do all the work is not one in which work becomes cheap. It’s a socialist economy.

    If work becomes too cheap, then paid work as a means of distributing wealth stops functioning. That means consumer demand fails, which means the economy fails. A world of ultra-low wages means a permanently failed economy. So we can have a capitalist economy permanently in failure mode, or we can have a socialist economy that works. Up to us.

    • You’re forgetting Bastiat’s old What Is Not Seen. Cheap labor doesn’t halt the development of technology, only delays its implementation until it becomes more economically feasible than cheap labor. In the meantime, lower costs of production mean lower prices, and therefore a higher standard of living for all. The less money is spent on things like that, the more is available for technological advancement in other areas.

    • Nicholas Lineback :

      In a world of abundance where machines do most of the work for us, it seems that all current economic systems will fall apart. However, if we get rid of intellectual property laws it seems that capitalism has a better shot than socialism. If we keep IP laws, all of the money will accumulate with those that own the IP. For instance, the company that owns the patent on a self-replicating road building robot will quickly get all of the road contracts in a country using the force of government to crush competitors. However, since technology lowers the cost of entry into an industry, getting rid of IP laws would allow small competitors to build their own robots. Thus, spreading the wealth with out the need for government intervention. In the long run however, we will probably need to move away from a money based economy altogether. I think a reputation based economy would be an adequate alternative. But, more likely than not, it will be something that no one has even dreamed about.

      • If we ever get to that point, some form of money will always exist. It just won’t be used to pay for basic necessities anymore, and labor won’t be for production of goods. Probably services. Who even knows… there’s only so much one can speculate.

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