What If…Higher minimum wage laws accelerate the automation of work?

  • May 12, 2016

By all accounts, the fight for higher minimum wages is gaining momentum, with the intended consequence of providing low-wage workers with incomes that are closer to living wages. From a business ethics perspective, this is a justifiable effort, in terms of beneficial outcomes, duties, and care-based principles. But what if…an unintended consequence is that more low-wage jobs are mechanized even more quickly than current projections?

Early indicators…

Seattle was one of the first to enact laws increasing the minimum wage, to $15/hour, effective April 1. As a result, many restaurants have closed, putting their employees out of work, and other workers have seen their benefits cut drastically. Although McDonald’s claims that its experimentation with ordering kiosks is not intended to replace human workers, at least one store in Missouri has done just that, and the Eatsa chain of restaurants is fully automated. All things equal, higher labor costs tend to make automation more attractive to business owners. In addition, minimum wage jobs are often those most easily mechanized. This combination of factors would indicate that entry-level positions at fast food restaurants are at risk of elimination, especially now that technology is readily available to replace them.

The ethics of automation

Very few argue that technology should not be used where it is available and adequate to do the job. However, unless we look closely at the long-term implications of utilizing automation, both intended and unintended, we are likely to be unprepared for the social consequences. Should we raise minimum wages today, now that technology is available to replace many workers? What if we can keep burger prices low, but eliminate most entry-level jobs?

The views and opinions expressed are those of the author and do not imply endorsement by UNIBusiness or the University of Northern Iowa.

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