The unintended and yet totally foreseen consequences of raising the minimum wage
Whoever could have guessed such as thing? Everyone:
In response to recent minimum wage increases in California, fast food restaurants across the state are shifting to automation to get rid of wage-earning humans.
The move to making customers place orders at digital kiosks alleviates what owners say is the financial strain of rising labor costs after the minimum wage for the state’s fast food workers increased on April 1 from $16 to $20 per hour.
Harsh Ghai, a Burger King franchise owner who manages 140 outlets along the West Coast, is leading the transition to automation. He plans to introduce digital kiosks across all his restaurants within months — a drastic acceleration from his original timeline of five to 10 years.
Note that it was going to be happening anyway, just on a slower schedule.
And – Harsh Ghai? Is he a harsh guy?
Here’s another article on the effects of the new minimum wage law.
How could anyone not realize that this was coming as a result of the law? Minimum wage law hikes tend to ignore economics but make those who support them feel good – at the workers’ expense.
Only a Leftist wouldn’t see this coming, one stage thinking.
A. Workers are deplorable. Ew.
B. Union wages are often indexed to the minimum wage.
Minimum wage laws are really minimum skills laws. If you don’t have skills worth the new minimum wage, you will be fired or not hired. Teenagers just out of high school with few skills, are especially hard hit.
The minimum wage for fast food workers used to be based on the fact that they were teens living with their parents. Nowadays, that’s not as true as it used to be. In effect, fast food was partly subsidized by workers’ parents. It was okay back in the day, when society was different. Now, many adults work in fast food jobs and don’t live with their parents. I don’t know the answer to how low skilled workers can support themselves without driving up fast food prices, but I do know that there is a lot more to this issue than shaming people who work crappy jobs and telling them, look what you made me do, if you won’t work for practically nothing, you’re fired.
BTW, something similar is going on in some skilled professions. Americans charge too much, let’s outsource it to foreign countries or immigrants who don’t need their own room, they can work cheap because they’ll share a room with 10 other people. I also don’t know the answer to this, but the answer isn’t to parrot the usual talking points we hear, like “these new people are humble, let’s fire the greedy Americans and give new people a chance.” Yes, so called conservatives say stuff like this, just like they blame fast food workers for wanting enough money to live on. First they came for the fry cooks, then they came for the lawn care guys, then they came for everyone else.
Simply cannot be reiterated enough: the true minimum wage is always and everywhere $0.00.
Nowadays, people know the price of everything and the value of nothing.
–Oscar Wilde
“How could anyone not realize that this was coming as a result of the law?”
The great majority of people believe what fits with their preconceptions and ignore/deny what doesn’t fit.
As long as it doesn’t personally impact upon them, the majority on the left view ‘reality’ as whatever they wish it to be.
While the hard nosed ideologues see the loss of jobs as a positive. In raising the minimum wage, the predictable consequences are a feature not a bug. Tearing down America is the entire point. Political blowback deflected by blaming Trump and the Republicans.
The only folks happy with the new minimum wage laws in Ca are those still employed in that industry and the politicians who will be the recipients of campaign contributions from those labor unions that pushed for the new law.
As far as leftists being unable to realize the real implications of this law; they knew damn well what would happen. Their line of thinking is you must crack a few eggs to make an omelete.
Leftists are not stupid or ignorant; they know exactly what they are doing and are willing to sacrifice others if they believe it is necessary to advance their agenda.
Note that they are more than happy to cause others to suffer as long as it does not affect them. Sort of like Hamas, which uses the average Gazan as cannon fodder because it helps the cause of Hamas.
}}} I don’t know the answer to how low skilled workers can support themselves without driving up fast food prices
It’s actually fairly simple — if you don’t want to earn McWages, the answer is to have more than McSkills.
There are a number of avenues — not requiring high-priced 4y degrees — which earn far far more than minwage… for those who are physically inclined, Welding is a widely known Trade School talent which many can learn. If you are more intellectually inclined, there is a 2y program at any JuCo in nursing or paralegal. Even court reporting is a good way to make money in a short training time, and experience improves income quite a bit.
Yes, it requires you to knuckle down and work harder for a while as you gain the additional skills, rather than to couch-potato in front of an X-box or to party your night away. But this is how EVERYONE has historically improved themselves to make themselves eligible for higher paying jobs… from going to night school in the 1800s to become fully literate to taking classes part time at local JuCos.
In economics, this is called “delayed gratification”. And it’s how everyone moves up the ladder, even those who already make six figures, yet are not actually “rich”. You give up things now so that you will get more back later.
There was a mini-scandal in the Obama administration when one his chief economic advisers who had published a paper on minimum wage was refuted by a much better study. The effect was to discredit the theory applied in California.
One of the problems with economics is that the data people look at doesn’t tell the whole story. We are told about “skills,” but that doesn’t describe everything a worker brings to the job.
The typical fast food worker in the 50s and 60s grew up in a house with indoor plumbing, and when they came to work, they weren’t just flipping burgers, they also had the skill of showering every day, letting mom do their laundry, not making bad choices about the relationship between bathroom habits and food preparation, etc.
Economists put these workers in the same category as workers who aren’t as clean or smart as they were back in the day. So, instead of calculating the value of life skills, economists treat workers as if they were machines flipping burgers.
How much money and goodwill has Chipotle lost because they have had more than one outbreak of e-coli? Could this have been due to management there thinking food prep is about skills only, and not related to lifestyle?
Low paid jobs like food prep, housekeeping, home nursing, etc. actually require higher levels of personal hygiene and common sense than higher paid technical jobs. But due to the blind spots in how economics is done, wages are so low, only the least competent people in society take those jobs. Is this good for society?
There was a famous case years ago, where a nanny of a rich and famous media exec murdered his children. She made $10/hr. I thought at the time, maybe they should have paid a bit more for a sane person.
One more data point, I was staying in a lot of Airbnbs while traveling in Eastern Europe during Covid. Airbnb advertised that they would sanitize every apartment, included in maid service. And do you think it occurred to anyone to provide disposable cleaning equipment? No, housekeeping was going from apartment to apartment using the same mop and sponges. Bonus essay question: would it have helped if housekeeping were paid and trained better? How would this have affected Airbnb? Would a better-trained and equipped staff have caused Airbnb prices to go up? Should they have been replaced by robots, after dumping on them for not having better skills?
What would have been the affect on Bulgarian society if incompetent housekeepers were replaced by robots instead of being retrained? Good for Airbnb, bad for Bulgaria. The bell curve is here to stay, the people on the other side are our neighbors, better to invest in their skills than write them off as not worth the trouble.
To Obloody Hell, your suggestion that people supporting themselves with menial labor should go back to school, do you also believe the slogan about learning to code? How about let them eat cake? Some people will be able to go back to school while working full time, most won’t.
California politicians are just crazy. See the recent moves towards reparations in the state. California politicians — and voters — aren’t terribly different from those in the other Democrat post-industrial states, but I wonder how it is that we got to this point. I suspect that, as in other fields, diversity counts more than competence or knowledge in blue state electoral politics nowadays. I don’t say that as a racial thing. It’s just that nobody wants to vote for the old bald accountant with the pocket protector anymore. Everybody in politics needs some kind of a gimmick.
I don’t know what the answer to the bigger problem is, but I do notice that a lot of the native-born fast food workers are still young people. They aren’t as likely to be high school students anymore, but many of them may still live with their parents. Some may have disabilities and live in a group home. Others have roommates and many be struggling to pay the rent. Recent immigrants do seem to be taking more and more fast food jobs, though.
Washington state has a $16 minimum wage (higher in Seattle) and there is such a shortage of workers in our area of eastern Washington that signs are in many businesses (mostly chain stores) with sign boards offering $18-$19 starting wages.
I’m sure it makes it hard for small businesses– yet a local flatbread sandwich shop is only open for lunch. The owner has another shop in the next town and has given up finding reliable help– so she comes over and runs the place for lunch.
Maybe because, politically, it’s a can’t-lose proposition for the Left. The politicians enacting the higher minimum wage get favorable media exposure, and the consequences get blamed on Greedy Businessmen Who Put Profits Over People.
“Some people will be able to go back to school while working full time, most won’t.” – feral lunch lady
What you’re describing is why everyone doesn’t end up with a good job and a comfortable retirement. Childhood training, intelligence, ambition, local opportunities, and much more all determine a person’s path through life.
I’m one of three sons. We all were taught a work ethic and had opportunities to work at unskilled jobs. All three of us served in the miliary, where two of us learned our lifelong trades.
My younger brother served a single enlistment then struck out into the world. He held many different jobs but found it hard to increase his wages. Eventually, he got a job with the state and found his niche as an inspector of school lunch programs. He stuck with it and was able to retire comfortably.
Of the three of us, I was the only one to get a college degree, which improved my opportunities. My divorced mother was not able to help me, and I worked my way n through school. In the 1950s it was possible to do that, especially if you went to a state school without a big reputation.
My older brother served twenty-five years and was a Master Chief Petty Officer with major skills in radio, cryptography, and electrical work. After retiring from the Navy, he quickly found work in his field, and went on to a comfortable retirement.
Three boys, all from the same background, but very different paths through life. Too many people today don’t see the military as a prep school for civilian life. For every trigger puller you need four or five support personnel maintaining equipment, doing intelligence, providing logistics, serving food, maintaining bases, etc. Not only that, but the GI Bill will help put a person through school after an enlistment is completed.
I don’t see the military being shut down anytime soon. In fact, they’re missing their enlistment quotas.
When I was in high school, we were given aptitude tests to steer us in the direction of our abilities and interests. Thay helped me. I hope they’re still doing that today.
While I’m pointing out routes for success, we all recognize that many people will make bad decisions, poor choices, and make a mess of their lives. Our society used to be more orderly, more structured, with fewer drugs and bad examples to follow. Boy Scouts has been shrunken to a minor part of our society. It was a big part of my boyhood. It teaches morality and character. Churches are shrinking as well. Sunday School taught my brothers and I about right and wrong.
I’ve ramble d on here, but I think you can see that I believe there are some answers to the dilemma we find ourselves in.
Don’t be surprised if the California legislature passes a law requiring minimum staffing levels at eat in restaurants.
who, other than the cashiers, are replaced by kiosks? I worked in a fast food restaurant in 1969-70. In a typical shift we had 2 cashiers. Everyone else was a cook or prep worker. We received truckloads of raw ingredients that we made into burgers, fries, and fried chicken. The meat was frozen. The potatoes were bags of russets (there was a peeler machine, a wash sink, a cutter, and a Frymaster). Fat was in blocks. Buns were in boxes. Cheese was in large packages. Etc. Packaging was tracked instead of contents. I cooked KFC and fries for my meagre pay.
What’s it like now? Microwave fare delivered pre-cooked?
I made $1.75/hr in 1969, when Hires root beer was 99 cents a gallon, you could get a decent steak for 79 cents a pound, and cheap gasoline was 35 cents a gallon. Everything is ten times as expensive now. $20 is not hugely more than $17.50.
I bought a brand new 1972 Buick Electra 225 for $2500. Nowadays, $25K would by a low-end Toyota. The equivalent of an Electra would probably run a quarter-mil.
William,
The Toyota is faster, quicker and handles far better. Assuming maintenance it will always start, even when you park facing the wrong way on a hill. It will not need an engine and tranny rebuild at 100K. It may not at 350K.
You will survive serious collisions that would kill in the Buick. You will ride more comfortably. Your gas mileage will triple the Buick’s. It will suffer far less rust.
Granted, you could sublet the Buick’s back seat and trunk to a young family starting out.