Is the minimum wage going to cause a robot job apocalypse? Today's news for January 5th

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Is the minimum wage going to cause a robot job apocalypse?

Last night, former Libertarian presidential candidate Austin Petersen had a live YouTube stream where he discussed the question above:



A few comments on Petersen's live stream:

1. Austin needs to be prepared when he goes live. Too often, he is sitting there at the start looking stupid, and he isn't.
2. He front loads his advertising a bit too much. While I appreciate the value of advertising in the need to make a living for someone in media (by the way, feel free to click the ads on this page!), it is best when the advertising is less obtrusive. He should slip it in during the broadcast, not so much at the beginning.

On to the meat of his commentary...

The minimum wage is an issue because many states have increased their minimum wages at the start of this year. I have discussed the minimum wage extensively here; however, Petersen advocates a minimum wage of zero. Petersen accurately points out how the minimum wage prices unskilled labor out of the job market. But what about skilled labor?

Admittedly, minimum wage laws artificially inflate the lowest wages. And Petersen makes the valid point that minimum wage laws encourage the creation of robotic labor to handle unskilled labor. But he doesn't go high enough up the labor food chain. When artificial intelligence becomes advanced enough to replace skilled labor, it will, and very quickly. It is one thing to replace your $15/hour fry cook, but it is a lot more cost efficient to replace your $200/hour lawyer, or your $50/hour tech support worker. Remember, a $15/hour fry cook requires a bit more physical automation, whereas the "brain skills" mainly just require a computer interface.

Between the minimum wage laws squeezing us out of low wage jobs, and artificial intelligence squeezing out the higher wage jobs, humanity is about to get pushed out of the work force.

Petersen quotes Forbes writer John Tamny's editorial, "Sorry Pundits, Robots And Automation Are The Sole Reason To Support The Cruel Minimum Wage", which is correct about its assumptions at the bottom end of the wage scale, specifically:

...increased use of self-checkout at retailers like Walmart, or self-service kiosks at restaurant chains like McDonald's has led to hysterical commentary about how state-mandated minimum wages have forced automation that is creating broad unemployment among the lower-skilled.  But automation is always and everywhere a good thing. Because it is, the analysis about wage floors and automation amounts to flawed thinking.  If it’s true that cruel wage floors are fostering increased use of the proverbial robot, then this represents one of the few good tradeoffs to a minimum wage that vandalizes basic economics.

Indeed, what can’t be forgotten is that the erasure of work is always and everywhere the proper goal of commerce.  Neither businesses nor willing workers are advantaged by the waste of human labor on the kind of work that could otherwise be done by machines.

...Importantly, that which makes human inputs redundant doesn’t increase unemployment.  If it did, the U.S. and other technologically advanced countries would be marked by rampant joblessness simply because the very purpose of technology is to free human beings from work.  Lest we forget, before the staggering (at the time) technological advance that was the tractor, most humans spent their days working in the fields very unproductively.  If not for the technology-driven job destruction that has been the rule in the developed world for quite some time, we’d all be working; albeit in jobs that would have us miserable.  Thank goodness for the proverbial robots (tractors, cars, airplanes, computers, internet, ATMs) that have made it increasingly possible for humans of varied skills to find work that more and more rewards a wide variety of skills.  Automation is what made this possible.

If we were only discussing physical automation of labor, I would completely concur with Tamny and Petersen. However, it is the skilled labor to be replaced by artificial intelligence that will be the most troublesome for society. Ironically, pundits like them may be the last to be replaced by artificial intelligence.