I’m not buying it. Minimum wage had nothing to do with automation. They automation was going to happen anyway, the minimum wage had nothing to do with it. But I repeat myself. Adjusted for inflation Mike was making more than $7.25/hr, he was making 9.31/hr.
“Minimum wage had nothing to do with automation. They automation was going to happen anyway, the minimum wage had nothing to do with it.”
At the very least, minimum wage increases are a motivation to automate sooner or automate more jobs. Automation is not free; there are costs to purchase the equipment, install it, and maintain it. Most businesses don’t want to pay those costs until it becomes more profitable to do that than the alternatives.
Here's a clue to what Rowe is talking about - raises in the minimum wage have a direct impact on the SPEED that automation is implemented. Rowe (nor anyone) is saying minimum raise is the ONLY cause of automation.
Let's see if I can keep this simple enough for even you....a fast food employee makes $8/hour. The cost of a machine to replace what he/she does costs $12/hour. Employee keeps job until the cost of the automation gets below the wage cost. Now, via increase in the minimum wage, the same employee has to make $15/hour. Guess who is now out of a job?????
The formula is pretty simple. Anything you do requires investment. You pay for a machine, you pay to make it work. You pay for training. What makes the most sense?
What's the most expensive? What's the most complicated?(expensive?)
Do you know how much investment dealing with employees justifies? Raise the minimum wage to $20...then see how many low and no skill positions exist.