Shortly before California Governor Jerry Brown announced a plan to boost the state’s pay floor to $15 per hour, President Obama’s economic advisers released an ominous report warning that low-paying American jobs were particularly vulnerable to automation. Vox reports:
This year’s [Economic Report of the President] contains a striking prediction about the effect of robots and automation on the job market … Low-paying jobs (those paying less than $20 an hour, or under $40,000 a year for full-time workers) have an 83 percent chance of being automated. Medium-paying jobs ($20 to $40 an hour, or $40,000 to $80,000 a year) have a 31 percent chance, and high-paying ones (more than $40 an hour, or more than $80,000 a year) have only a 4 percent chance.
Brown’s minimum wage scheme will, of course, artificially raise the cost of hiring the most at-risk workers. Though the robots are not ready to take over quite yet, an onerous wage floor only incentivizes further research into automation. This whole situation is a bizarre illustration of the layered contradictions contained in the blue coalition: anti-inequality crusaders want a radical minimum wage hike, which will likely have the effect of raising unemployment (and welfare eligibility) among economically deprived blue constituencies. Meanwhile, those most likely to benefit down the line from these kinds of moves are the socially liberal Silicon Valley executives and venture capitalists, who bankroll the Democratic Party despite some of their dearly held libertarian beliefs.
And this is but one example of how the blue model functions as an engine through which savvy wealthy people use the illusions of the Left to extract profit from the poor and working class. Other examples include: Guild protections for elite professionals that raise prices and reduce opportunity for less-credentialed workers; finance regulations that give hedge funds a leg up on less-sophisticated investors; and a constellation of higher ed regulations that enrich top administrators while impoverishing adjuncts and sending students deep into debt.
All these blue regulatory ideas are intended to address real concerns—access to a living wage, to quality professional services, or to retirement security—at a time of economic transition and dislocation. The question is: How do we weather this period in a humane and sustainable way? In almost all cases, the blue approach will have the opposite of its intended effect, favoring privileged insiders at the expense of those it is intended to help.