NATIONAL REVIEW ONLINE
December 6, 2013 12:00 AM
The Minimum Wage and the Rise of the Machines
The robot future is coming, and helping human laborers will require creative responses.
By Jonah Goldberg
After you heard President Obama’s call for a hike in the minimum wage, you probably wondered the same thing I did: Was Obama sent from the future by Skynet to prepare humanity for its ultimate dominion by robots?
But just in case the question didn’t occur to you, let me explain. On Tuesday, the day before Obama called for an increase in the minimum wage, the restaurant chain Applebee’s announced that it will install iPad-like tablets at every table. Chili’s already made this move earlier this year.
With these consoles customers will be able to order their meals and pay their checks without dealing with a waiter or waitress. Both companies insist that they won’t be changing their staffing levels, but if you’ve read any science fiction, you know that’s what the masterminds of every robot takeover say: “We’re here to help. We’re not a threat.”
But the fact is, the tablets are a threat. In 2011, Annie Lowrey wrote about the burgeoning tablet-as-waiter business. She focused on a startup firm called E La Carte, which makes a table tablet called Presto. “Each console goes for $100 per month. If a restaurant serves meals eight hours a day, seven days a week, it works out to 42 cents per hour per table — making the Presto cheaper than even the very cheapest waiter. Moreover, no manager needs to train it, replace it if it quits, or offer it sick days. And it doesn’t forget to take off the cheese, walk off for 20 minutes, or accidentally offend with small talk, either.”
Applebee’s is using the Presto. Are we really supposed to believe that the chain will keep thousands of redundant human staffers on the payroll forever?
People don’t go into business to create jobs; they go into business to make money. Labor is a cost. The more expensive labor is, the more attractive nonhuman replacements for labor become. The minimum wage makes labor more expensive. Obama knows this, which is why he so often demonizes ATM machines as job-killers.
Just a few days before Obama’s big speech on income inequality, Amazon CEO Jeff Bezos launched a media frenzy by revealing on 60 Minutes that he’s working on the idea of having a fleet of robot drones deliver products straight to your door. I can only imagine the discomfort this caused for any UPS or FedEx delivery guys watching the show. There are still a lot of bugs to be worked out, but does anyone doubt that this is coming?
You might take solace in the fact that there will still be a need for truck drivers to deliver the really big stuff and to supply the warehouses where the drones come and go like worker bees. The only hitch is that technology for driverless cars is already here, it just hasn’t been deployed — yet.
None of this is necessarily bad. Machines make us a more productive society, and a more productive society is a richer society. They also free us up for more rewarding work. As Wired’s Kevin Kelly notes, “Two hundred years ago, 70 percent of American workers lived on the farm. Today automation has eliminated all but 1 percent of their jobs, replacing them (and their work animals) with machines.”
While some hippies and agrarian poets may disagree, most people wouldn’t say we’d be better off if seven out of ten people still did backbreaking labor on farms.
That doesn’t mean the transition to a society fueled by robot slaves won’t be painful. The Luddites destroyed cotton mills for a reason. Figuring out ways to get the young and the poor into the job market really is a vital political, economic, and moral challenge. My colleague at the American Enterprise Institute, James Pethokoukis, argues that one partial solution might have to be wage subsidies that defray the costs of labor, tipping the calculus in favor of humans at least for a while.
“Of course,” Pethokoukis notes, “wage subsidies are an on-budget, transparent cost — which politicians hate — while the costs of the minimum wage are shifted onto business and hidden. But the costs exist just the same.”
The robot future is coming no matter what, and it will require some truly creative responses by policymakers. I don’t know what those are, but I’m pretty sure antiquated ideas that were bad policy 100 years ago aren’t going to be of much use. Maybe the answers will come when artificial intelligence finally comes online and we can replace the policymakers with machines, too.