Minimum-wage boosts only encourage more bots, researchers say
- Two economists said they've found new evidence that minimum-wage hikes force employers to automate low-skilled workers' jobs, reports CNBC. According to David Neumark of UC Irvine and Grace Lordan of the London School of Economics, the low-skilled workers hit hardest by unemployment are young, old, black and female. The research defined low-skilled workers as those with a high school education or less.
- In their recently released paper, Neumark and Lordan found that many of the workers whose jobs were automated became unemployed right after a minimum-wage increase. The research was based on 35 years of government census data, from 1980 to 2015, CNBC said. Automation includes such technology as robotic arms that replace assembly-line workers in manufacturing and self-service check-out areas that take the place of cashiers in supermarkets.
- Tech innovator and billionaire Elon Musk, echoing similar sentiments from other tech entrepreneurs, told CNBC in a 2016 interview that a universal basic income (UBI) may be the only solution to mass unemployment due to automation.
A Cornerstone Capital Group study found that automation could replace 7.5 million retail workers. Some employment experts believe that automation, in taking over some human-held jobs, will also create new jobs. But these positions will likely require high-level skills and training for lower-skilled workers to stay employed.
Whether minimum-wage hikes hurt or help low-income workers — with or without the specter of automation — is a question still under debate. Proponents say workers earning the federal minimum wage of $7.25 an hour deserve a higher, living wage on which to survive, support a family and contribute to the economy as consumers.
As opponents of minimum-wage hikes, business groups and GOP lawmakers across the country have fought the increases in state legislatures and the courts, claiming that increases are a financial burden on companies that will force them to lay off workers. One study of Seattle's workers found the city's new minimum-wage law hurt poorer local workers, but the study has proved controversial among analysts.
Minimum-wage hikes were approved for 11.8 million American workers for 2017. The issue was also on the ballot in several states during the last election. Employers will need to see how the courts and state legislatures resolve minimum-wage disputes. Meanwhile, retailers and manufacturers that anticipate automating their workplaces might consider how many workers will be replaced and how many can be trained and retained for incoming jobs.
- CNBC Here's new evidence minimum-wage hikes result in workers being replaced by robots
- National Bureau of Economic Research People Versus Machines: The Impact of Minimum Wages on Automatable Jobs
- HR Dive Computerization could put 3.5M cashiers out of a job
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