04/05/2017

The Minimum Wage Should Be Called The Robot Employment Act

Andy Puzder, Wall Street Journal

Entry-level jobs matter—and you don’t have to take my word for it. In a speech last week on workforce development in low-income communities, Federal Reserve Chair Janet Yellen said that “it is crucial for younger workers to establish a solid connection to employment early in their work lives.”

Unfortunately, government policies are destroying entry-level jobs by giving businesses an incentive to automate at an accelerated pace. In a survey released last month, the publication Nation’s Restaurant News asked 319 restaurant operators to name their biggest challenge for 2017. Nearly a quarter of them, 24%, said rising minimum wages.

It’s no surprise that restaurants are rolling out the robots. McDonald’s said last November that it would install self-order kiosks in all 14,000 of its U.S. restaurants. Wendy’s announced in February it would add kiosks at about 1,000 locations to “appeal to younger customers and reduce labor costs.”

The trend toward automation is particularly pronounced in areas where the local minimum wage is high. Eatsa, a 21st-century version of the automat, now lists seven locations in four cities, each of which will be subject to a $15 minimum wage within the next 36 months.

Taking automation to the next step, Miso Robotics and the owner of CaliBurger announced in March they have developed a robotic arm, called Flippy, that can turn burgers and place them on buns. CaliBurger plans to install them over the next two years in 50 restaurants world-wide.

By encouraging automation, cities that significantly raise the minimum wage destroy opportunities for the least-skilled workers. In 2015 a scholar at the Federal Reserve Bank of San Francisco released a paper summarizing the available research on this effect. “The most credible conclusion,” he wrote, “is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.”

The loss of entry-level jobs also worsens racial disparities. In a 2011 report from the nonpartisan Employment Policies Institute, two university economists examined nearly 20 years of data containing 600,000 observations. They compared how each 10% increase in the minimum wage affected the employment of young males without a high-school diploma. For whites, the drop was 2.5%. For blacks, it was 6.5%.

These are jobs America cannot afford to lose. In 2014 nearly 40% of black men age 20 to 24 in Chicago and almost 30% in New York and Los Angeles were neither working nor in school, according to a report last year from the Great Cities Institute. For white men, it was about 10%. Nationally, February’s unemployment rate among white males age 16 to 19 was 14.1%; for young black males it was 24.1%.

[Subscription required.]

Read full article



You May Also Like:

Trump To Order Investigation Into FBI/DOJ Surveillance Of His Campaign Justin Caruso, The Daily Caller

H.A.L.P.E.R. Spells Game Up for Obama's Spies Clarice Feldman, American Thinker

Stefan Halper Agent Provocateur – In His Own Words… sundance, The Last Refuge

Mnuchin Says US Has Deal With China To Cut Trade Deficit, Will Hold Off On Tariffs [Watch] Joseph Weber, Fox News

Protect Us from Such ‘Victories’ Don Boudreaux, Café Hayek

Al Sharpton: Royal Wedding Proves White Supremacy ‘On Its Last Breath’ Ben Kew, Breitbart

Hillary Clinton Says She's Not Over The 2016 Election, Pulls Out Russian Hat During Yale Speech [Watch] Naomi Lim, Washington Examiner

Study: Voters Worried About Political Correctness Flocked To Candidate Trump Robby Soave, Reason

Jonathan Swift In A White Suit Matthew Continetti, The Washington Free Beacon

Marijuana Arrests Are Not Racist: Some Neighborhoods Have Heavier Enforcement Because They Have More Crime, And Complaints Seth Barron, New York Daily News

Andrew Sullivan: Obama’s Legacy Is Dead And Trump Killed It streiff, RedState

Starbucks Is About To Woke Their Way Out Of Business Jazz Shaw, Hot Air

Elizabeth Warren Boldly Pledges To Never Take Money From A Group That Has Never Donated To Her [Watch] Timothy Meads, Townhall

Jordan B. Peterson Isn't Criticizing Women When He Discusses "Agreeableness" Sean Malone, Foundation For Economic Education

For More go to the Home Page >>>

Join Our Email List



section

Bookshelf

FreeMarket Central

Some titles recent, all recommended -

Special Video Feature

FreeMarket Central

Voices From The 2017 International Students For Liberty Conference

section

In Search Of History

The Reagan Tax Cuts Worked

Thanks to "bracket creep," the inflation of the 1970s pushed millions of taxpayers into higher tax brackets even though their inflation-adjusted incomes were not rising. To help offset this tax increase and also to improve incentives to work, save, and invest, President Reagan proposed sweeping tax rate reductions during the 1980s. What happened? Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).

 

-- Daniel J. Mitchell,

Shadow Stats Snapshot


FreeMarket Central

ShadowStats alternate economic indicators are based on the methodology of noted economist John Williams, specialist in government economic reporting.

  • Unemployment:
    FreeMarket Central BLS: 3.93%
    FreeMarket Central Shadow Stats: 21.5%
  • Inflation:
    FreeMarket Central April Year-to-Year: 2.46% (CPI-U*)
    FreeMarket Central Shadow Stats: 9.9%

*[cpi-u is the Bureau of Labor Statistics inflation rate for all urban consumers]

section