In 1967, John Sebastian, lead singer of the band The Lovin’ Spoonful, wrote a song entitled, “Younger Generation.” In the song, he sang about some crazy futuristic invention called a Video-Phone. Today they fit in our pockets.
With technology always at the forefront, time marches humbly on. The impossible becomes reality. Science fiction becomes nonfiction. Sometimes this happens with good intention. Other times. Not so much.
As technology advances in ways to make our lives more convenient, we just might be eliminating ourselves. Computer software has already replaced hordes of bean counters and such, and it does a better job. Telephone operators. Remember hearing about them? Factories have saved a mint by automating what they used to have to pay people to manually do.
America is chock full of a highly qualified workforce specializing in any field or imaginable area. Briefcases are stuffed full of diplomas and highly-polished resumes. But it also has its fill of those who’ve never owned a briefcase. Those who chose not to further their educations. Those with little aspiration. And even those with criminal records who have chosen their own low wage destinies.
Now those under-achievers want more money because their highly unskilled selves are deserving of so much more than they’ve ever worked for. Of course, if they God forbid have to do anything special or different for the extra loot, forget about it. The deals off.
The deal may be off for them, but it’s certainly not off for the companies who plan on increasing their automated processes should Joe Biden hike the minimum wage up to 15 smackers an hour.
According to Mark Maurer of the CFO Journal, “CFOs are gearing up to raise prices, reduce workers’ hours and ramp up technology investments as they face the possibility of higher labor costs under a Biden administration.”
And there’s this from the Wall Street Journal. “Companies including Chipotle Mexican Grill Inc., Potbelly Corp. and Texas Roadhouse Inc. are already doing the math to assess what a higher federal minimum wage could mean for their operations and cost base.”
“Some executives fear that increases to the federal pay floor would drive up wages across income classes, hurting profits and forcing businesses to find savings to offset higher spending on labor.”
The logic is simple. If bread suddenly shot up to $8 a loaf due to a government-mandated price, it would mold on the shelves and the respective bakeries would declare bankruptcy. When labor costs significantly increase for a company or manufacturer, in lieu of raising prices by the same percentage of increase, they look for ways to reduce their costs so consumers will continue to buy their products.
The initial investment for automation might be a bit staggering, but over time the investment will pay for itself and begin turning a better profit than prior to its use. In the meanwhile, the unemployed unskilled workforce has caused a national disaster due to staggering unemployment rates.
And some of these laid off workers will be making more by collecting free unemployment money than they did sticking fries in a fryer. So much for initiative…
Revered economist wrote the following in the publication Basic Economics. “By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market. The result is a surplus, whether the price that is set artificially high is that of farm produce or labor.”
“Unfortunately, the real minimum wage is always zero,” he continued. “And that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage.”
In a tweet, Sowell also said, “The government may determine and decree a “living wage” under a minimum wage law, but unless the worker actually finds an employer willing to pay him that much, he will remain unemployed with a hypothetical right.”
There is so much more to consider when raising the minimum wage than is being thought of by the Democrats. Their foolish idea of creating a “living wage” to boost the economy will be a disaster in no uncertain terms.
You better start sticking your cash in a mattress. What do you think? Is this article on point or way off base?