$15 Minimum
The Robot Subsidy Act

A new report from McKinsey confirms what we have known for a while: The types of jobs most likely to be affected by the minimum wage hike are also those most vulnerable to automation. Business Insider reports:

Do you spend a lot of time on predictable physical work, data processing, or data collecting? We’ve got some bad news.

A McKinsey report from Michael Chui, James Manyika, and Mehdi Miremadi says analyzing work activities rather than occupations is a more accurate predictor of automation.

Unpredictable physical work, stakeholder interactions, and applying expertise are less susceptible to automation. Managing others is least susceptible — so no robot bosses yet. […]

Spoiler alert: it’s not looking good for accommodations and food services and manufacturing.

As $15 per hour wage floors phase in in cities and states across the country, companies will have even stronger incentives to invest in robots. The job losses for less-skilled workers will accelerate. And while this policy will certainly harm struggling small businesses, it is very much in the interest of certain large corporations. Silicon Valley technology executives and venture capitalists will reap the biggest benefits from what is essentially a subsidy to the information technology sector.

To be sure, the trend toward automation would happen with or without radical minimum wage hikes—and, in the long run, the elimination of mindless, routine tasks is a good thing. But at a time of economic transition, when labor force participation is dwindling, we have no reason to accelerate what is in the short run a painful and disruptive trend. Policymakers genuinely interested in reducing inequality and raising standards of living for those at the bottom should look to other areas—like tax credits, housing, immigration, and job training—to raise workers’ incomes without replacing them.

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