by Rob Roper
Senate President Pro Tem Tim Ashe (D/P-Chittenden) recently affirmed his commitment to passing a $15 minimum wage for Vermont; not this year but next. Ashe’s main concern is that passing such a law would have, from his perspective, the negative consequence of lifting incomes beyond the limits that qualify them for certain welfare programs. I thought creating financial independence was the point (erroneous but well intentioned), but it’s not what makes this such a bad policy.
John Hayward wrote an in-depth article, Robots Know Minimum Wage Is Always Zero, about a new technology being rolled out in California: a burger flipping robot. Everybody should read this.
We’ve all seen how many employers are already replacing certain jobs, restaurants and grocery stores for example, with iPad like tablets. You can order your burger now by clicking on a screen instead of speaking to a human being. Now the burger you order could be prepared by a machine as well.
What government is doing here is making it impossible for entry level workers to compete with technology for jobs. If entry-level workers never have an opportunity to enter the workforce, we’re in deep trouble.
When we artificially raise the price of cigarettes, we force people to quit smoking (or find a cheaper habit). When we artificially raise the price of one energy source, we force a more rapid development of new, alternative energy technologies. When we artificially raise the cost of labor, we force employers to stop hiring and force a more rapid development of alternative technologies.
As Hayward writes,
We can’t stop progress or robots, but we can adopt wise policies that maximize both supply and demand for human capital, encouraging employers to pay the best price for high-quality labor. Right now, we’re trying to force them to pay more than the labor is really worth because our government has not been able to establish a better set of labor, immigration and education policies. BurgerFlipBot is a symbol of that government failure — and a stark warning of what lies at the end of that road.
Since the turn of the century, national labor force participation rates have dropped pretty dramatically and are now just about 63%. High minimum wage laws are part of the problem. As artificial intelligence grows in its capabilities and decreases in its costs to implement, governments need to make it easier for human beings to compete for jobs. The alternative is consigning millions of people the real minimum wage: ZERO.
- Rob Roper is president of the Ethan Allen Institute.