Randall Forsyth of Barron’s focuses attention on a recent survey that should prompt policymakers to think twice about boosting the government-mandated minimum wage.
Technology also is being utilized in rather more productive ways, spurred on by politics. Specifically, the campaign to boost the minimum wage would provide the impetus to put more robots to work—in place of humans.
That’s the conclusion of the latest survey of chief financial officers by the Fuqua School of Business at Duke University. Nearly three-quarters of the CFOs polled said they would trim current or future payrolls if the minimum wage were hiked to $15 an hour—the aim of various campaigns. Some 41% said they would lay off current workers, and 66% would slow future hiring. Moreover, 66% of firms said they would also cut employee benefits, and 49% would raise prices with a 15-buck wage floor.
Those impacts wouldn’t be immediate, writes Campbell Harvey, the Fuqua professor who is the founder of the survey. Most companies with employees earning less than $10 an hour would gradually invest in labor-saving techniques were the minimum wage to be hiked, he continues. “CFOs are telling policy makers there is a significant unintended consequence: Some jobs will be replaced by robots, and this replacement is permanent.”
The fast-food business, a primary target for the $15-an-hour minimum, would probably become a big adopter of automation. At Starbucks, there’s already a feature for that in its Mobile Order and Pay app for smartphones. Between mandated pay hikes and the ubiquity of iPhones and Android devices, positions for fast-food order takers would most likely dwindle. And anybody who has ever tried to order in a drive-through with one of those unintelligible speakers might welcome the option of a phone app.
