Yves here. This article discusses how minimum wages effect not just employment levels, but also turnover in low-wage jobs. It presents them as a “tradeoff” which is arguably a mischaracterization. Losing a job is stressful to the employee and turnover is also costly to the employer (time spent screening, training; possible frictions with existing work teams that require management time and attention). Thus greater job stability is a net benefit.
By Pierre Brochu, Department of Economics, University of Ottawa and David A. Green, Professor at the Vancouver School of Economics, University of British Columbia. Originally published at VoxEU
Economic research finds little evidence in support of the hypothesis that an increase in minimum wages significantly affects employment – either positively or negatively. This column discusses a study of the impact of minimum-wage changes on turnover rates. Minimum-wage increases are associated with a lower probability that a job will end, and with a lower probability that an unemployed person will find work. The former effect is established only for newly hired workers. Increases in the minimum wages are also associated with more stable jobs for all low educated workers. Thus, the trade-off between fewer jobs with higher wages and more job stability versus easier access to jobs should be taken into account in the minimum-wage policy debates.
On 14 January 2014 a group of 75 economists, including seven Nobel laureates, released a letter calling for an increase in the US minimum wage (Woellert 2014). At the same time, George Osborne, the Conservative Chancellor of the Exchequer in the UK, has called for the minimum wage in that country to rise by more than the rate of inflation this year (BBC 2014). In both cases, the key argument for an increase concerns a need for fairness in insuring that the lowest paid workers share in the benefits of post-recession economic growth.
Are minimum-wage debates economically meaningful?
Opposing arguments, of course, are based on concerns that increasing the minimum wage will reduce employment for the very people the policy is intending to help. Assessing the extent of employment effects from minimum wages is the focus of a voluminous literature that includes studies of effects in many developed countries (see Card and Krueger 1995, and Neumark and Wascher 2007 for comprehensive surveys of the literature). The debate in that literature, which has been heated at times, has centred on the question of whether increases in the minimum wage have positive or negative effects on employment.
• But the American letter writers, and others assessing the literature, conclude that whether the sign is negative or positive, the impact of minimum wages on employment rates is small.
• Moreover, fewer than 5% of workers in countries like Canada and the US earn the minimum wage, implying that any direct negative effects of a minimum-wage increase are unlikely to be widespread (e.g. Neumark et al. 2004).
That conclusion is reinforced by the fact that studies of minimum-wage changes on the wages of workers earning just more than the minimum tend to find little or no effect.
• In addition, studies of employment effects of minimum-wage changes focus mainly on teenagers. Even for young adults (age 20 to 24), minimum-wage effects tend to be statistically insignificant and not economically substantial. Effects for older adults are so small that few papers bother to report them. Again, the conclusion is that minimum-wage hikes are directly relevant for a small subset of the workforce.
Given this, one might be forgiven for concluding that debates over the minimum wage are more about political sound and fury than about anything economically meaningful.
Minimum Wages and Turnover Rates
This latter conclusion, though, is challenged by a small set of new papers examining the impact of minimum wages on labour force turnover rates (hiring rates, quit rates, and layoff rates). The question these papers try to address is somewhat different from the large existing employment effects literature. While the latter examines whether workers are either laid off or not hired at the time of a minimum-wage increase, the point of the turnover papers is to ask whether turnover rates are different in high versus low minimum-wage regimes. The first paper examining this was a study of the effects of a 1987 increase in the Portugese minimum wage using matched worker and firm data (Portugal and Cardoso 2006). These authors look at job separation and hiring rates for teenagers before and after the 1987 minimum wage increase, using older workers as a comparison group. They find that hiring rates were lower after 1987 than before, as one might expect. But, more strikingly, the separation rate also declined after 1987. Similarly, Dube et al.(2012) in work carried out contemporaneously with our own, used comparisons across US state borders to examine separation rates, and also found that separation rates decline after minimum-wage increases. As with Portugal and Cardoso (2006), their work focuses on impacts for teenagers and restaurant workers.
In our own work (Brochu and Green 2013), we investigate the impact of minimum wage changes on turnover rates using Canadian Labour Force Survey (LFS) data. The Canadian LFS is the monthly representative survey the primary purpose of which is to collect the data underlying official unemployment and employment rates. Its structure is comparable to both the US Current Population Survey, and the UK’s Labour Force Survey. Using it conveys three main advantages.
• First, it allows us to take advantage of the substantial variation in the minimum wage in Canada. Canadian minimum wages are set at the provincial level and in our time period (1979 through 2008), there are over 140 nominal minimum-wage changes.
• Second, the Canadian Labour Force Survey contains a consistent question on job tenure asked of all workers in every month in our sample period. Job tenure turns out to play an important role in our results.
• Third, the survey contains information on education, which the US data used by Dube et al. (2012) does not, and that allows us to define the relevant labour market as individuals with a high school or less education rather than just focusing on teenagers.
Using a difference-in-difference type specification that takes advantage of the time x province variation in minimum-wage changes (and making appropriate adjustments to standard errors), we find that the impact of minimum-wage increases on turnover depends strongly on job tenure.
• For those with over a year of job tenure, minimum-wage changes have little impact on the probability a job ends.
• However, turnover rates at the start of a job (in the first year) are substantial. A 10% increase in the minimum wage implies a 5% decrease in the probability a job terminates during the first year.
Interestingly, the size of the effect is very similar for workers in all age categories. But this is not the case for hiring rate effects.
• For workers over the age of 20, the reduced separation rate is matched almost exactly by a corresponding decline in the probability an unemployed worker finds a new job. For teenagers, the latter probability declines more.
Thus, for older workers, the two effects offset one another, and there is little impact on their long-term employment rate. For teenagers, the extra reduction in hiring implies that their employment rates decline. The results are very similar for males and females.
One other surprising result is that most of the impact of minimum-wage increases in reducing job separations (approximately 2/3 of the effect) is due to a reduction in layoffs rather than quits. This is interesting new information on the way the labour market works, and could reflect firms screening applicants more carefully before hiring if they are going to be forced to pay a higher minimum wage, or it could reflect firms being less willing to lay off workers because the cost of training and retaining their replacements has increased.
• The key result from a policy perspective, though, is that raising minimum wages affects newly hired, high school educated workers of all ages.
The fact that the overall employment rate for older workers changes little when the minimum wage changes has led many observers to conclude that minimum wages are simply irrelevant for these workers. Instead, we find that when the minimum wage is higher, all low educated workers face jobs that are more stable (in the sense that they are less likely to end in a lay-off) but harder to get. This shifts the debate over the usefulness of minimum wages to the question of whether workers are better off with improved job stability or improved chances of finding a job when unemployed. It also means that minimum wages affect a much larger part of the labour market than is usually recognised and potentially raises the stakes in the policy debates.
Taken together, the results for less educated workers imply that an increase in the minimum wage results in more stable jobs, but fewer of them. Thus, the policy debate should not just be about the employment rate effects of minimum wage increases but about the trade-off between good jobs with higher wages and more job stability versus easier access to jobs. And the debate is relevant for all of the low educated labour market, not just teenagers.
See original article for references
This article makes an important point.
If this article is right (and I believe it is), then the job market will be even more difficult for low wage earners. They will clamor for JOBS – and Obama will be ready with another easy answer: TPP.
Those who object will be painted as heartless.
Lets not forget the other minimum wage issue:
Obama has argued that it is. That a minimum wage that is adequate for two parents to raise a child above the poverty line provides sufficient EQUAL OPPORTUNITY for that child to be successful in the oh so exceptional land of neo-liberal America.
“Opposing arguments, of course, are based on concerns that increasing the minimum wage will reduce employment for the very people the policy is intending to help.”
Really?!? Does anyone really think opposing arguments are based on genuine concerns for the people, who earn near the minimum wage?
If anyone were genuinely concerned about the people earning the minimum wage, they wouldn’t frame their concern in terms of “employment”, they would frame their concern in terms of “income”. As in, will a higher wage result in reduced income for the minimum wage worker?
It is possible that a higher wage would reduce employment, but still increase incomes among minimum wage workers. People earning the minimum wage might work fewer hours, but earn more money. If analyst’s concern were with the worker, that’s something the researcher would focus on.
You let the bad guys set the agenda, when you accept their pretensions of concern at face value.
Why not say that opponents of a minimum wage increase are concerned about the costs to employers? Probably true in many cases. Would it be so terrible to identify their most probable motivations accurately?
Much too early in the day for a debate among economists about whether giving low paid people a raise will make them richer or poorer. Maybe we should try leaving the minimum wage where it is, cutting CEO pay by eighty percent and just dividing up the savings among wage workers per capita? How do you suppose these economists would feel about that?
The whole framework is wrong. Meaningful work paying a living wage should be a basic human right. If government undertook this, then the private sector would have to compete with government for workers by offering them more meaningful work and/or better pay and benefits.
The authors are correct to the extent that the minimum wage directly affects only a small percentage of the labor force. As such, it will have no real affect on the economy. It will not change wealth inequality. It will not increase aggregate demand sufficiently to increase employment generally and put upward pressure on wages. It might improve the lives marginally of those working at minimum wage but it will still leave them in poverty. From a societal point of view, a minimum wage is a liberal sop. It does not solve any problem. It just makes some groups feel better about the problem.
Absolutely right, Hugh. A living wage for each willing worker is a matter of basic human dignity and human rights.
And I don’t give a damn about increasing aggregate demand. There is enough demand, just as there is enough wealth in our society; we need to learn how to share it justly. We must move beyond the shamelessly immoral Thatcherite notion that “there is no such thing as society”, or soon enough, there will be no such thing as America.
Isn’t one of the mantras around here that demand, not “job creator” whim, creates employment? This study seems to have a forest for the trees problem and doesn’t account for the greater spending power of those now better paid employees, the demand that will result, the employment that will ultimately come from that demand.
Unions–and I once belonged to one–traditionally have supported the minimum wage because it sets a floor below all hourly wages. Therefore it’s not really about the small minority who actually get the minimum but about all working class people. It’s up to the government to ensure that society’s bounty is distributed fairly because, as is crashingly obvious in our new Gilded Age, markets will never do this.
Therefore the minimum wage is a political issue more than economic. These narrowly focused economic studies just muddy the waters. For the last few decades we’ve been running the country according to the dictates of the economics professors and look at the result.
All major “economic” issues are political issues.
Always interesting to read about the invention of the wheel. This has been studied quite a lot with similar results over the years both in economic studies and in social science experiments. Here the authors only talk about employment rates and length of employment–kind of misses the point it seems to me.
The fact is that increases in wages lead to higher productivity (mainly) and better job satisfaction since, in the U.S., income is closely tied to status and self-esteem. This has effects beyond just income and productivity. Happier workers are healthier and they make better decisions in all areas of life.
My impression of the oligarchs in the U.S. is that they want a large segment of the U.S. population to suffer, to stay ignorant and in a stupor, often a stupor of pain. If you have been around poor white people in the “red” areas of this country you will know they pride themselves on putting up with the pain and surviving catastrophes that would shock most middle class bi-coastal types. As George Carlin liked to say the oligarchs don’t want smart people with critical thinking skills (http://youtu.be/hYIC0eZYEtI — a video that contains all you need to know about the political economy in the U.S.) they want crestfallen people whose curiosity has been beaten out of them with a cadre of elite professionals to do their bidding (sometimes called the “creative class”).
George Carlin really hit the nail on the head.
The Texas Republican Party was openly against teaching children to be critical thinkers. Their 2012 platform contained the following:
“We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs that are simply a relabeling of Outcome-Based Education (OBE) (mastery learning) which focus on behavior modification and have the purpose of challenging the student’s fixed beliefs and undermining parental authority.”
But, it’s not just the Texas GOP.
The Republican and Democratic parties of corporate shills, crony capitalists and neo-liberal economists, sweatshop tycoons, bullies, frat boys, and brownshirts in pinstripes don’t want a population capable of critical thinking. They want obedient workers, people just smart enough to run the machines and just dumb enough to passively accept their situation.
How is a healthy democracy possible when such lunacy exists?
Very few parents encourage their children to be critical thinkers. Most teachers don’t teach critical thinking. Most politicians are against it. This is one of our nation’s greatest unrecognized crises.
“Don’t just teach your children to read. Teach them to question what they read. Teach them to question everything.” – George Carlin
Some years ago the conservative critique was that we were abandoning the Western humanistic tradition, this was during the days of the heyday of the counter-culture and was expressed in books like The Closing of the American Mind. Now they have become the most ardent enemies of the Western rationalist tradition it’s a bit ironic isn’t it?
I respectfully disagree Dakota. We can’t start from a point where we think everyone else is stupid. I think there are a great many people that are fed up and disgusted with what is happening in America. It’s more a problem of feeling alienated and powerless to change things. Basically, short of violence, we are suppose to use the political process to elect a representative (of the people) government. But since the political process and both of our established political parties have been bought and paid for, we end up instead with Democratic and Republican representatives of the global corporatocracy. They are the only candidates with enough money and media attention to win an election. People have lost hope, are afraid and simply don’t know how to re-empower themselves as equals to the rich and powerful. It’s been repeated a thousand times on this web site, no one of consequence has gone to jail for the fraud behind the financial crisis. That speaks volumes to the general population.
You say that no one of consequence has gone to jail for the fraud behind the financial crisis. For the sake of clarity, what were the crimes that were committed by “people of consequence” that are worthy of imprisonment? What social norms were so severely violated that these people of consequence deserve to be put in prison for?
Cooking the books? I think a few people went to rich people’s jail for that.
Deregulating financial regulation so that large, too-big-to-fail banks could form, overleverage themselves, and then ask the government to pick up the tab on their debt is criminal in what way when we support a form of civilization that lionizes financial institutions because they store capital.
I think it’s difficult to punish capitalists in a capitalist society for essentially behaving like capitalists: doing whatever it takes to “WIN.”
You say that a great many people that are fed up and disgusted with what is happening in America. So fed up that they keep investing their money in the stock market in what seems like large established corporations, keep putting themselves through school on the promise of a “good job” “with “room for advancement” at a corporation or another hierarchical organizations that many people are also disgusted with, like government ? I think a more accurate assessment of America is that some people are fed up…but not fed up to DO ANYTHING about it, which is Banger’s point.
The “people of consequence”, from my observations, are more afraid of Islamic terrorists challenging them than the American people, ( Middle-Class people, and people who have been “educated” to aspire to Middle Class lifestyles. The real Middle Class households, imo, are made up of households that can afford to pay the full cost of a college tuition ,at a four year school, for a given year and that’s usually a household with a yearly income at least $100,000, after taxes.)who can be placated with technological frippery and exceptionalist propaganda. The sheeple are easily herded.
Raising the minimum wage is like the tide coming in that raises all boats. Trickle up prosperity if you will. An important point seems to be missing from their equation and that is the human side of the argument. “Why should the taxpayers have to pay to support corporations that pay workers so little that they need food stamps to survive”? If these corporations aren’t making enough to pay their workers living wages then why should they exist? They shouldn’t. If they were gone, personally, I’d like to see less fast food joints and more mom and pop operations that live in the real economy where their workers aren’t forced into slave wages due to necessity. REAL Competition. There are so many welfare queen fast food joints that no local companies can compete with their pricing. They are so large they control the markets and dictate wages and benefits, nationwide. I wonder how much these welfare queen corporations employees receive from the government? I’ll bet it’s in the billions and it all goes to lining the pockets of the owners. They see their workers as chattel and undeserving of dignity as they steal it daily for themselves.
Our trade agreements all seem bent on making the American worker compete with workers in Asia and India for wages. It’s a race to the bottom for the American worker. No TPP!!
“Raising the minimum wage is like the tide coming in that raises all boats.”
A better way to lift all boats is a blanket guaranteed basic income dividend per month of something like $1,000 per month per Social Security Number regardless of income or regardless of whether the recipient is receiving any public assistance arleady
Raising the minimum wage will not raise aggregate demand & spending as much at all as the above recommendation
The above policy is a KISS policy and easy to implement. At the same time we should implement a national sales tax / VAT tax to curb spending by the rich to control inflation.
We should also raise the income tax rate on the rich on upper middle classes & well to do.
Mansoor H. Khan
Hi, don’t post this, but really, I have to deal with moderators here holding up my innocuous posts?? Disheartening to say the least.
it’s algorithms, don’t take it personal. They’re doing the best they can (and it’s pretty derned good). Nothing’s perfect.
Hooray, raise the minimum wage, but remember that you will be wanting it raised again in the not too distant future. If there were no increases in prices, you wouldn’t need a friggin’ raise.
The Federal Reserve’s QE has put a floor under prices. Speculation and hoarding (Goldman Sachs/J.P. Morgan, anyone?) in the commodities markets has artificially caused prices to rise. Cheap money going to hedge funds has caused house prices to rise, along with rents (as they buy out blocks of foreclosed homes, then raise the rents).
Stop the flow of cheap money going to the elite, let prices come back down. Then you wouldn’t need a raise in the minimum wage. The Federal Reserve purposely creates inflation.
If you buy into this (without stopping the cause mentioned above), the fun is just going to continue, and it won’t be long before you’re strapped again and asking for another raise of the minimum wage.
Needing a raise is just a symptom. It’s not the cause. STOP THE CAUSE!!!!! Tell the Fed that they are to provide ZERO inflation – ZERO!!!!!
I don’t think so. Krugman, among others, has dealt with this extensively, and I find the arguments in favor of moderate inflation- and less moderate under current conditions- irrefutable. Consider the hangover of household debt. Inflation tends to help with that.
Regarding aggregate demand, I get the objections above, just want to add that minimum wage rises probably do help, both locally and nationally, under the current depressed conditions. There are many areas, as Bangor says above, where low wage jobs are much of the economy. The studies cited really don’t seem to differentiate between relatively normal times and Depressions, but it’s an important argument in favor of a raise right now, and lord knows, we need some of those.
Sev – it’s a short-term fix, like everything else in America. “Band-Aid that sucker over, and let’s get back to more of that growth.” Everybody rushes out and consumes with their extra money, spends more, causing more demand, which in turn causes prices to rise, which in turn causes people to want more money. It’s a vicious cycle. The dumb idiots play right into their hands. No more learning from mistakes or suffering at all; just crank it back up.
So inflation helps with “the hangover of household debt”. Didn’t the household debt happen because they gave out cheap credit to anyone who could breathe? And what about next time? Paper it over again? NO!
For every single person that is helped by papering it over, someone else gets hurt. Read about it.
Everything in Economics is a Balance Sheet:
The Media Once Again Repeats Bernanke’s Lie:
How the Federal Reserve is Counterfeiting:
“Now the other interesting point is that whether you have inflation or deflation, in terms of current productive output and earnings, is immaterial. All the person in the economy cares about is purchasing power per unit of productive work they perform, not how you denominate it. Of course those who save would like deflation and those who are in debt would like inflation.
Causing monetary inflation, incidentally, is functionally identical to counterfeiting from the standpoint of anyone who has saved a portion of their economic surplus, and since counterfeiting is illegal anyone causing or conspiring to cause said monetary inflation should likewise be locked up.”
Everybody wants “something for nothing”. That doesn’t exist.
No, you have this wrong.
If you have a fairly stable rate of inflation (which no one has defined very well, but say within a 2% point band), investors know what to charge to compensate for the fact that they will be paid back in cheaper dollars. Anyone with even a smidge of finance education will tell you this.
The fact that you go about brandishing right-wing tropes like “counterfeiting” strongly indicates a need to do serious homework.
The only people who think we have low inflation are those who pay no attention to actual prices of things people need to buy. I have kept careful records and insist that the cost of a substantially unchanging (and not terribly exciting, consumption wise) life has increased by 12-15% p/a since 2009.
Margin inflation is a industry tool, your ire should be directed there. The counterfeiting trope is a classic Austrian – neo/classical tool. Same dopes that caused wages to go sticky in the 70s – for fear of – inflation, its pathological.
skippy… Do I smell Booth school in the air?
Skippy – “Margin inflation is a industry tool, your ire should be directed there.”
Aiding and abetting (like the Federal Reserve is doing with the big banks/hedge funds) that margin inflation – hell, creating it – should put my ire right back on the Fed. If you put out candy, don’t be surprised if the children eat it.
Right wing/left wing – they’ve both caused the problems – from wing nuts like Reagan to Krugman.
The average person gets twisted in the wind between two sides of the same idiot.
Yves – oh, let’s slide “right-wing” into the conversation. I have a feeling you’d probably be more right-wing than I am. I think long-term, not short-term. I’d rather the common man (which I am) had a chance at life and not feel he must incessantly run on a treadmill, but I guess that’s just me. If there wasn’t constant inflation, there’d be no need for people to beg for raises.
When in the last forty years has there been a stable rate of inflation? Come on, if it’s absent for a short time, you just know it’s right around the corner, don’t you? You can feel it. Whenever a politician opens his mouth and says that we’ve got to get growth going, you know it’s coming. Hasn’t that been the practice? And raising the minimum wage is going to take care of it? For how long?
What, the Fed isn’t putting a floor under prices, trying their best to drive them higher? Jim Quinn says it best:
“The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB.”
The Federal Reserve’s mandate:
“The Congress established the statutory objectives for monetary policy–maximum employment, stable prices, and moderate long-term interest rates–in the Federal Reserve Act.”
Definition of “stable”: not likely to change or fail; firmly established
As j gibbs points out below, prices have been anything but stable.
That should read: “As j gibbs points out above…”
More inflation myopia… hint 40ish years of far right wing economic fundamentalism wrought this tragedy and all because they did not understand the basic nature of humans or money.
skippy… using Tea Party movement Karl is a massive tell.
Skippy – “…40ish years of far right wing economic fundamentalism…”
There you go blaming the “right wing” again. Stupid, simple thinking. The right wing have been self-serving criminals, but so has the other side. They’re both to blame.
Clinton/Bush/Obama/Reagan – all serving their masters well. But keep blaming one side. That way nothing will get done, and we can look forward (not) to Bush’s or Obama’s daughter becoming president, continuing the slide.
That way you can “skip” through life only knowing one-half of the sinister equation.
Like many independent voters have noted, there is no serious difference between Democrats and Republicans on economic issues.
Politically, we’re becoming so divided (read:diverse. ) that it’s contributing to in the increasingly inability of various layers of government to govern. Growing diversity is happening within a general context of eroding American exceptionalism . This discussion is moot because no one is seriously interested in governing in the U.S.’ current economic and political predicaments, just supporting their particular interest group.
Minimum wage isn’t the problem. Globalization and concentration of wealth and political power is the problem. The sooner we face the fact that globalization has been an epic fail for 90 % of the citizenry of the U.S. (and Europe), and has been a windfall for Wall Street and the 1 %, the sooner we can adopt sensible trade and fiscal policy to steer this country back on course. Labor arbitrage, tax arbitrage, tax holidays, tax breaks and the list goes on. Our political elite have sold us down the river and they need to go, all of them.
Avg John – you are right. If we corrected what you stated above, plus prevented the Federal Reserve from creating constant inflation (which just puts all of us on a treadmill), got money completely out of politics, went after the fraud and corruption with more than just fines and a slap, sent all politicians packing (as you say, all of them), there might be a chance.
Even without international labor arbitrage the relentless automation will drive down wages for most people except maybe for the automaters (computer specialists of all kinds who do the automating).
We need a better way to “return” the goodness created by humanity’s accumulated knowledge capital back to the common people. Say’s law even if was true (which it is not) will not do it.
Mansoor H. Khan
That sounds like welfare. Welfare is exactly what the political class is trying to dismantle so that America can more effectively compete with other economies around the world. You would be branded as a ” Muslim Socialist” regardless of whether you are Muslim if you were to say those things in public and you would not be popular with people who believe that America is The Land of Opportunity.
There’s a joke that I have about the Occupy Movement.Why did the Occupy Movement end? The Occupy Movement ended because the majority of the protesters got accepted into grad school.
Minimum-wage increases are associated with more job stability and less poverty.
Yup- I avoid morality in societal policy problems, and prefer to be empirical. Higher base wages have in different studies/models come out a little lower or higher overall than lower base wages. What is distinctive is job stability, which translates to less fear. If X% of the low wage population experiences less fear because of better wages, this lack of fear will spread to the remainder.
Fear is how the US is run, and I’m in favor of anything that reduces it.
Don’t minimum wage laws assume that the demand for domestic labor is inelastic wrt wages? That the need for domestic workers can’t be significantly reduced via automation and outsourcing?
What is really needed is a Minimum Income.
The technology already exists to automate all fast food jobs. But if 4.5 million fast food workers all lost their jobs to automation, who would then purchase the food.
According to capitalist theory, this would motivate those slackers into high skill professional services, such as software, engineering, and logistics positions, which all that level of automation would create…but most of those workers would end up in all the sales and marketing positions that would sprout up.
Personally, I think automation would replace at least a million worker and would make fast food chains more sales orientated. Most workers would be working on commission and turn-over would be even higher than it is now.
Fast food workers on commission may be your wet dream, but it’s not mine. Sheesh, think of the effects on our already horrifically bad diet when every fast food worker has a three-ring binder of selling points from corporate. Kill me now.
It’s not my wet-dream, either but it’s the most realistic scenario I can see emerging from an increase in automation at fast food chains. I’m not a people person but I generally don’t support policies that make most people miserable for no reason but it seems like many people persons are. They like to see people work themselves stupid for their amusement or personal gratification.