$15/hour to make burgers? Try $0/hour

From ZeroHedge:

The Momentum Machines burger maker can “slice toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.” Unlike human workers, the robot is “more consistent, more sanitary, and can produce ~360 hamburgers per hour” or a burger every 10 seconds.

Furthermore, future generations of the device “will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.”

As the company’s website adds, “our various technologies can produce an ever-growing list of common choices like salads, sandwiches, hamburgers, and many other multi-ingredient foods with a gourmet focus.”

But most importantly, it has no wage demands: once one is purchashed it will work with 100% efficiency for years. And it never goes on strike.

As the company’s co-founder Alexandros Vardakostas told Xconomy his “device isn’t meant to make employees more efficient. It’s meant to completely obviate them.

A handful of expediters and floor managers will be able to run an entire McDonald’s. Ordering will soon be done with digital touch screen kiosks instead of cashiers, and orders will be filled by robots. One person to package the order, one to carry it to the counter, one more to run the drive-thru, and a floor manager.

 

Question for advocates of increasing the minimum wage…

Inspired by, and drawing largely from, this post over Cafe Hayek, here is a question that must be answered by every person claiming they support raising the minimum wage:

Regarding the effects of an increase in the minimum wage on the employment prospects of low skilled workers, do you either

1) believe that raising the minimum wage for some low skilled workers will NOT price other low skilled workers out of the job altogether – in other words that there are no trade-offs, no downside, to raising the minimum wage – or,

2) believe there are trade-offs, and some low-skilled workers will be priced out of the labor market – specifically those whose skills are not sufficient to demand the higher wage, such as, for example, teens and recent high school graduates – but, also believe the resulting benefits to the now higher paid workers will outweigh the resulting losses to the now unemployed low skilled workers, and therefore justify the increase?

Believing the first premise is simply economically incorrect. It defies basic economics and few sane people would likely defend such a stance when applied to other goods besides labor. Playstation4 consoles are currently selling for about $400 on Amazon. No reasonable person would argue that were the government to set the price of that console to no less than $800, that there would be no decrease in sales of PS4. Most people would rightly point out that sales of alternative consoles would likely increase, while sales of the PS4 would decrease. This is economics 101. If the price is artificially increased, quantity supplied may go up, but quantity demanded will go down, creating a surplus. Or in the case of low-skilled labor, creating a bunch of teens willing and able to work, but unable to find jobs.

LABOR SUPPLY

Believing the second premise is, however, more of a statement of values than an economic question. I happen to think it contrary to American values to endorse a government policy that grants benefits to one group at the explicit expense of another group. You may have convinced yourself of the goodness of raising the minimum wage on utilitarian grounds, or you may simply not care if some are harmed, so long as others are helped. Either way, you are endorsing a policy that reduces the freedom of one group to artificially boost the wages of another group.

It is often unclear what exactly is being debated is discussions over the minimum wage. If advocates of raising the minimum wage could please just answer this question up front, it will make it a lot easier to refute all your arguments. Thanks.