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Wages Up, Jobs Down: An Increased Minimum Wage Could Harm Workers

October 26, 2015

We hear a lot of people lately speaking up on the fight to raise the minimum wage to $15 per hour. But I’m not sure those people are considering the repercussions of such a pay hike.

For many industries, higher wages are leading to more automation and less jobs. This is especially true in fast food.


Imagine a restaurant with no human interaction at all, where the only humans are cooks preparing the food. Payment is done via an iPad or some other mechanism. Well, it’s already happening in San Francisco. And Wendy’s said more automation is on the horizon.


And it’s not just on our shores. Automated technology is replacing humans in China and everywhere else. It’s happening at an increasingly rapid pace, eliminating blue collar workers along the way. In fact, Target recently announced plans to replace workers with robots.

The fact is, automation is everywhere. We’ve been reaping its benefits for decades. Think about it – you probably use ATM machines all the time. They almost entirely replaced the need to go in a bank.


And back in 1961, GM used the Unimate industrial robot, the first of its kind, to enhance production efforts. It did tasks humans couldn’t or found too boring. Such machines are now widely used. Am I advocating for worker replacement through automation? No. I believe technology and humans should complement each other.


I’m saying it’s wise to realize the downstream effects of a huge jump in our national minimum wage. Undoubtedly, technology will continue to alter labor dynamics globally. Pushing for a $15 per hour minimum wage may be a disastrous automation catalyst for workers, but I’m not sure they realize it.

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Andrew Wood, Dan Simon and Alison Slezak are Investment Advisor Representatives. Advisory services are offered through CoreCap Advisors, LLC., a Registered Investment Advisor. CoreCap Advisors, LLC and Daniel A. White & Associates, LLC are separate & unaffiliated entities. 

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