2015 June 01 Monday
California Senate Votes To Help Robotics Companies
The California state senate has voted to raise minimum wage to $13 per hour. Whatever can they be thinking except of course to help VC-funded robotics start-ups? That's very forward-thinking. I normally do not expect such clever and wise industrial policy to come out of a legislative body.
Still, this does not go far enough. If LA, SF, San Jose, Sacramento and some other major cities in California were to put themselves on paths toward $20 per hour minimum wage then we'd witness a huge acceleration in funding for robotics development. I think this would be great.
If New York and Massachusetts want their high tech industries to get ahead of Silicon Valley here is your chance. $25 per hour minimum wage would do it. Granted, you folks would need to phase it in. Step up to $10 per hour and then go up, say, $1.50 per hour every year. Knowing that $25 per hour will be the minimum by 2025 would concentrate a lot of minds on cost reduction and automation.
I also see a big opportunity for cities. How to turn gentrification into overdrive? High minimum wage. This will drive out lower classes and make neighborhoods ripe for upgrade to only high income residents. Any city that takes this route will lower costs of social welfare programs, get big boosts in school performance, and create demand for very upscale services.
By Randall Parker at 2015 June 01 09:30 PM
Of course they're going to regulate robotics next since it's "unfair".
Eventually, they will make increasing minimum wages in municipalities illegal. It's obviously a reverse block-busting program, not a program to help raise the standard of living of the poor that are there.
Eventually we are going to have to do something about wage arbitrage and automation. Back in the day when it was mostly just young people, retirees and starter workers making minimum and near minimum wage we didn't have to worry.
As the New York Times notes http://www.nytimes.com/2014/06/10/upshot/minimum-wage.html
Minimum-wage workers are older than they used to be. Their average age is 35, and 88 percent are at least 20 years old. Half are older than 30, and about a third are at least 40. These patterns are somewhat new. In 1979, 27 percent of low-wage workers (those making $10.10 per hour or less in today’s dollars) were teenagers, compared with 12 percent in 2013, according to John Schmitt and Janelle Jones. They’re split fairly evenly between full-timers and part-timers. Most — 54 percent — work full-time schedules (at least 35 hours per week), and another 32 percent work at least half time (20-34 hours per week). Many have kids. About one-quarter (27 percent) of these low-wage workers are parents, compared with 34 percent of all workers. In all, 19 percent of children in the United States have a parent who would benefit from the increase.
Now the next portion of the article notes that 12% live in high income households. Those we don't need to worry about
And note this doesn't include the many many workers where they make more than minimum age but they can't say afford a 1 bedroom apartment or make a used car payment
Those people having low social mobility and relative poverty have no particular obligation support the state or any business or society at large and the smartest thing they can do for themselves is to vote for socialism of some kind. Better handouts and unemployment than a lot of work for a wage no one can live on
if we don't want that to happen, we will have to do something about it. The Earned Income tax Credit might work well enough but doing that just subsidizes cheap labor and does nothing about automation. another option is a social credit. heck we could change the incentives by taking automation like crazy , a Kiosk that replaces say 10 minimum wage employees gets a 100,000 a month tax. None of the options are good but keeping society running depends on wages as percent GDP and the sheer amount of arbitrage (down 50% of percent GDP since 1973) is creating a massive problem
Paradoxically, in the long run automation and robots will save the unemployed, or low weage poor classes because the machines will become so cheap to make and operate that a lot of goods and services will be provided to the lower classes for free. Food, shelter, water, will be free.
taking automation: you mean taxing automation?
Why tax automation? It is more efficient.
Better to subsidize some jobs. For example, litter collection. Or painting schools. Or nature trail construction. Or road repair.