Wednesday, August 05, 2015

Raising the Minimum Wage

A while ago, I was in the self-serve check out at Ralphs supermarket and there was this guy waiting in the cashier line next to me. The girl managing the 4 self-serve kiosks asked the gentleman if he would like to use one of the self-serve kiosks, as it was faster. His reply, “No thank you, I already have a job.” I laughed for hours after hearing that.

The one thing that many have not realized is that the computer revolution has drastically eliminated many jobs. If it is repetitive, it is gone. ATM machines come to mind, look at all of the bank tellers that are no more. I went to Home Depot the other day and they have 6 self-serve kiosks with one worker running them. At Walmart, they had 10 of them running. Meter readers for gas, water and electricity are no more; each meter phones home to report consumption. One person with an excel spread sheet can do the work of 20 accountants. 40 years ago, a secretary had to be able to type 60 words a minute and handle a lot of printed correspondence. In today’s world, nobody even knows what I am talking about. Pull up a reply form letter on your computer, change the name, type in the email address and hit send.

The irritating thing is this, we have had a computer revolution that has change the mindset of business radically but yet Congress does not understand the future economic projection of the concept. Congress and local governments, think that setting wage standards in the USA will set the tune. The problem is, they are not even close. Profit return is what runs business. The bottom line, can a machine do the work cheaper than an employee? At a wage of $9 per hour, the answer is no, but at $15 per hour, the answer may be yes.

So don’t look for $15 per hour to solve our problems. In the long run it could create more unemployment. On the lighter side, one job is safe (as long as computers need humans), cleaning rest rooms. The sad thing, you may be over qualified for the job if you have a college degree.


dearieme said...

I tried a self-service check-out once, years ago. It was vile. Everything required me to bend - which hurts my back - and the screen was illegible without changing my glasses. Never again!

For years, though, my wife has used a super self-scanning system at a local supermarket. She walks around with a pistol-grip scanner, scans everything before she puts it in her trolley, holsters the scanner at exit and pays electronically with her credit card. Painless, and no double-handling. Once in a blue moon staff check that she's scanned in accurately/honestly. We love it.

dearieme said...

Jim, with your interest in meat prices I thought you might be amused by a lunch on offer in the pub beer garden where we ate yesterday. "Mixed Grill" it said - ribeye steak, gammon, lamb steak, chicken breast, Cumberland sausage, two eggs and chips: 18.75 GBP (about 30 USD).

I said sarcastically to my wife that there were obviously two eggs because otherwise there might be a shortage of protein on the plate. She said, no, it was because one egg would seem so paltry against the background of a heap of meats. At our age I don't think that either of us could have eaten all that.

The setting was attractive, the weather delightful, the beer was excellent. I had whitebait, followed by crab with fennel salad, and then a cheeseboard of Lincolnshire delicacies. As you might guess, it was my birthday treat. A hundred years ago my great uncle died on the Western Front. I've never had to go to war. Some things have undoubtedly improved.

Jim in San Marcos said...

Hi dearieme

Happy Birthday

I can remember the Restaurant menu from my blog going back to 1938, see Feb 28, 2015 -- Lobster and coffee was only 85 cents. We really can't complain about the price anymore, I guess we just have to get used to it in our old age. Realistically, the politicians haven't been able to fiddle with the flavor of the foods we enjoy, just the price we pay for them and that's a good thing. I'm glad you had a good time, that's all that counts.

You're meal sounded mouth watering and made me hungry. I'm going to set down and open up a can of smoked herring and some crackers. A craving I acquired while over in England many many years ago.

Take care

Anonymous said...

Hi Jim,

You mentioned automation. What do you think employment will look like 100 years from now? We we all be enlightened humans, with excess time to ponder philosophical questions , as we are living in some sort of Ancient Greek inspired Utopia? Or will 99% of America be left out? (poor)

Do you think capitalism can survive if 99% of the people dont need to contribute to the common good (since everything is automated?

Anonymous said...

Sorry, I meant "Will we all be enlightened".

AIM said...

The underlying and inevitable deflation monster has been slowly doing its damage. It can't be held off or kept out of sight much longer. The majority of the USA, the low wage workers, are going to be more concerned that they just HAVE a wage rather than what it is. Technology, plus poor long term economic policies and lack of preparation on the part of our government, will deliver a "one two punch" to the low wage worker cohort here in America. The times they are a changing. It will be gradual for all of us living in the midst of it, yet, from a nation or historical viewpoint it will be a fast whopper of a reset. Out with the old system and in with the new. The disruption, damage and sadness and unwitting victims are already beginning to come into view. Violate financial and economic principles, violate principles of governance and democracy, allow elements of corruption, corporatocracy, cronyism, elitism, socialism, fascism, etc. into the mix and... it's all over folks. To us, we'll be going out with a bang, but from the historical view it will be a whimper. Just the end of another cycle for humanity and beginning of another.

Jim in San Marcos said...


I don't see the deflation monster yet. Prices are out of sight. Toilet paper a dollar a roll and a Junior Whopper is 3.49 plus tax. There have always been low wage jobs, the only difference today is that there are four times as many people chasing them.

Do you get the feeling that what you read in the paper doesn't reveal the real problems? This is a great depression, and of course, everyone is in denial.

AIM said...

People don't see the deflation monster because it has merely been masked over by "interim inflation", i.e., an effete attempt on the part of central banks and governments to stop the deflation monster that hit in 2007 by implementing QE and all of their other desperate policies and unusual solutions. Lack of jobs is deflationary, low wages are deflationary, robotics and software and other technology are deflationary, collapsing pension funds are deflationary, defaulting cities and countries are deflationary, dropping commodity prices are deflationary, a strong and rising USD is deflationary, China's collapse is deflationary, an oil glut is deflationary, higher taxes are deflationary, bail-ins are deflationary, recessions are deflationary, wars are deflationary, FATCA is deflationary, terrorism is deflationary, and on and on and on.

Joseph Oppenheim said...

Either a higher minimum wage (which is happening) or higher EITC would be great. Globalization and technology have already reducd the cost of many things. The US is more of a service economy and most such jobs can't be exported,just made eisier. With an aging population, more caregivers and health workers are needed. Plus, many look down on fast food workers, but really they do a pretty important job, feeding us with incredible efficiency and pleasantness. Plus, needed infrastructure, etc.

dearieme said...

"many look down on fast food workers, but really they do a pretty important job, feeding us with incredible efficiency and pleasantness": here, here. We had a fine fish'n'chips lunch yesterday, and the waitress was excellent, bless her.

AIM said...

Fast food leads one to an early grave. Partakers are digging their graves with their teeth. Big problem in this country is food. The best thing that could ever happen to us is for all of those companies (and their fast food workers) to disappear. Processed, toxic, de-natured, industrial oils (hydrogenated, trans-fat, etc.). This is why we have obesity and all of the degenerative diseases here... and why they are getting worse. Health has everything to do with diet, sleep, exercise and stress management and America is deficient in all of them. Wake up. Get educated.

dearieme said...

It's a good deal more likely that many of the health problems have been caused by fallacious government propaganda urging the population to eschew animal fats and eat carbohydrates instead. The evidence supporting that propaganda seems to lie on the spectrum between non-existent and mendacious.