There are two emerging trends that will likely roil job markets, and therefore politics, in the near future: Robots are getting cheaper, while low-skilled human workers are getting more expensive. We can thank innovative engineers for the first development, and liberals for the second.
The Wall Street Journal points out that robots aren’t just for big companies with deep pockets anymore. Robots are now available for $20,000 and can perform a wide range of functions. “A new breed of so-called collaborative machines—designed to work alongside people in close settings—is changing the way some of America’s smaller manufacturers do their jobs,” says the Journal.
“Collaborative machines” can perform one function one day and a different function the next. Many are mobile and, with the help of GPS, can move from one place to another. And they are often better than humans at performing certain tasks.
But perhaps even more important: They don’t join unions, they don’t take breaks, they don’t need vacations, they don’t spend time on social media, they are happy to work overtime, and they don’t demand raises.
It’s that last factor that may have become their biggest selling point.
Liberals are on a mission to price lower-income workers out of a job—though that’s not how they would describe it. Their demand for a minimum wage increase, originally to $10.10 but increasingly to $15.00 an hour, will price millions of workers, including some skilled workers, out of a job.
Just do the math. The current federal minimum wage is $7.25 an hour, or about $15,000 a year—though several states and some cities have already imposed a higher rate. Kick that wage up to $15.00 an hour and full-time employees are looking at more than $31,000 in base pay.
But don’t forget President Obama’s health care law, which requires employers (with 50 or more employees) to provide health insurance. The employers’ share of those policies can easily run $4,000 a year. So make that a $35,000-a-year employee. And Obama hopes to impose even more labor costs before he’s gone.
The Journal article focuses on a family owned business where the cost of a robot to perform a $16.50-an-hour job is between $30,000 and $60,000. So for less than two years worth of a human’s wages the employer can have the “perfect employee” who will be happy doing that job for years.
Whose jobs are likely to be on the “chopping-bot,” so to speak?
In 2013, two Oxford professors looked at 702 detailed occupations and released a paper that examined how many of those jobs were subject to computerization.
According to our estimates around 47 percent of total US employment is in the high risk category. We refer to these as jobs at risk—i.e. jobs we expect could be automated relatively soon, perhaps over the next decade or two. … Our model predicts that most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations, are at risk.
While nearly half of the jobs included were subject to computerization, it was 70 percent for lower-skilled jobs.
To be sure, the trend toward robotization has been going on for a while, and would be doing so even if liberals weren’t demanding a huge minimum wage increase. But policies have consequences, often unintended ones.
The higher liberals push a wage that cannot be justified on its merits, the more likely that job will eventually be replaced by a robot. Liberals are creating an incentive for entrepreneurs and engineers to find an affordable alternative, and for employers to embrace that alternative.
And unlike the temporary job losses caused by a recession, those robot-replaced jobs won’t come back, which may be one factor why the country’s workforce participation rate, 62.6 percent, has fallen to 1977 levels.
So while liberals demanding $15.00 an hour may eventually win politically, they will likely hurt the very people they are trying to help. A $15.00-an-hour job that an employer never fills is not much of a victory. It may make more economic sense for an employer to hire a highly skilled robot if it costs about the same as a low-skilled human.
And that robot won’t be trying to date the boss’s daughter—at least not yet.