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Wednesday, April 26, 2017

Strategic CSR - Minimum wage

The article in the url below presents a strong argument in favor of minimum wage jobs:
"Entry-level jobs matter—and you don't have to take my word for it. In a speech last week on workforce development in low-income communities, Federal Reserve Chair Janet Yellen said that 'it is crucial for younger workers to establish a solid connection to employment early in their work lives.'"
Although the author of this article has a dodgy record as an employer (to say the least), I think there is value in his position on this issue. Specifically, he argues that the downside to a significant jump in the minimum wage is heightened in an age of increasing automation:
"In a survey released last month, the publication Nation's Restaurant News asked 319 restaurant operators to name their biggest challenged for 2017. Nearly a quarter of them, 24%, said rising minimum wages. … McDonald's said last November that it would install self-order kiosks in all 14,000 of its U.S. restaurants. Wendy's announced in February it would add kiosks at about 1,000 locations to 'appeal to younger customers and reduce labor costs.'"
While prior research on the effects of a minimum wage suggest that a significant jump discourages entrepreneurs from creating more jobs, the article suggests that, given the increasing ability of machines to replace humans in the workplace, any legislation designed to raise the minimum wage should really be called "the Robot Employment Act":
"The trend toward automation is particularly pronounced in areas where the local minimum wage is high. Eatsa, a 21st-century version of the automat, now lists seven locations in four cities, each of which will be subject to a $15 minimum wage within the next 36 months."
And this problem is only going to become more apparent:
"Taking automation to the next step, Miso Robotics and the owner of CaliBurger announced in March they have developed a robotic arm, called Flippy, that can turn burgers and place them on buns. CaliBurger plans to install them over the next two years in 50 restaurants worldwide."
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The Minimum Wage Should Be Called the Robot Employment Act
By Andy Puzder
April 14, 2017
The Wall Street Journal
Late Edition – Final