Min. wage study suggests a robot works for free

Wednesday, August 16, 2017
 | 
Chris Woodward (OneNewsNow.com)

$15 an hour protesters (new pic) (1)A new study has concluded what many people have warned about: automation will replace workers if the minimum wage jumps. 

The study, from the National Bureau of Economic Research, warns of lower employment in the manufacturing sector especially for blacks, females, and older workers.

Trey Kovacs of the Competitive Enterprise Institute (CEI) says we can see this happening in many areas of the economy where wages are being raised dramatically.

"If you raise the cost of labor," he observes, "people are going to look for alternatives. And with technology getting better and better when it comes to robots or automation, whatever you want to call it, people are going to utilize that technology more."

He cites the examples of kiosks as fast food restaurants and self-checkout lines at retail stores.

Democrats, meanwhile, continue to support raising the federal minimum wage from $7.25 to $15 an hour, which they call a "living wage" that reduces poverty and gets people off government programs.

Earlier this summer, a study found that liberal Seattle may have hurt hourly workers when the City Council voted in 2014 to incrementally increase its minimum wage to $15 by 2021.  

USA Today, among other news outlets, reported on that University of Washington study in July. 

"If you hear the rhetoric coming out of the Fight for 15 groups, they don't ever talk about the tradeoffs of minimum wage increases," counters Kovacs. "Certainly the people who retain their jobs will be better off but lots of people will lose their jobs."

If the government requires an increase in the minimum wage, Kovacs recommends a cost-benefit analysis be done on how many jobs will be lost.

"They don't take into account most workers who are displaced don't end up getting another job," he continues. "If they were really taking these things into consideration, they wouldn't be looking to have these dramatic increases in minimum wage and would seek far smaller increases, if that's what they thought was necessary."

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