Raise the minimum wage and the robots win

Minimum wage opponents warn of robots, false economic logic

By Steve Ahlquist in Rhode Island’s Future

Bob Bacon, owner of Gregg's, says that raising the minimum wage will
lead to restaurant workers being replaced by robots. Actually, that's
starting to happen already, even without the wage hike.

Rep David Bennett’s bill to increase the Rhode Island minimum wage to $10.10 from its current $9 would be the fourth time in four years that the lowest earning Rhode Islanders would see an increase in their pay due to legislative action. Like always, such an increase will not come without a fight.

Last week’s meeting of the House Labor Committee saw five different business lobbying groups send representatives to speak against any increase. During the two hours of testimony, any reason that could be dredged up to oppose increasing the minimum wage was presented – including fear mongering, the citing of questionable studies and downright falsehoods.

Lenette Boisselle, representing the Rhode Island Hospitality Association, suggested that the minimum wage is merely a temporary training wage, and not much used in the state, even though Rep. Bennett just testified that there are 45,000 Rhode Islanders making minimum wage. Boisselle said that we don’t yet know what effects the recently enacted minimum wage increase will have on our state’s economy. 

Elizabeth Suever, of the Greater Providence Chamber of Commerce, agreed with Boisselle and suggested that the state do a study to determine what the appropriate minimum wage should be.

Bob Bacon, who is the chairman of the RI Hospitality Association and runs Gregg’s Restaurants, a small chain of medium priced eateries, maintained that any increase in the minimum wage will force prices to rise, resulting in no advantage for workers. But what minimum wage advocates should really be worried about, according to Bacon, arerobots.

“There’s already massive movement towards technology that will eliminate the need for labor,” said Bacon, “In many restaurants now you have touch pads. Guess what’s next? Pretty soon you’re placing your order on that thing and it’s going to take ten less people to serve you your dinner. 

And McDonald’s has a system now that one guy at the end of the line starts the burger process and it spits out the other end and they eliminated three people in the middle.”

John Simmons, of the Rhode Island Public Expenditure Council, did Bacon one better. “There’s been some work done, I think, by McDonald’s, as a matter of fact. In particular, on hamburger making. There is some expertise now that they’re drafting up that there will be no person making hamburgers anymore at McDonald’s. It will be all done by machine.”

That workers demanding fair pay will force industry to develop robots has been the refrain from economic conservatives for a while now. The Wall St. Journal ran a piece called “Minimum Wage Backfire” that blamed business automation on minimum wage activists, writing, “The result of their agitation will be more jobs for machines and fewer for the least skilled workers.” Conservative blogs and other media have run with the story, but there’s no truth in it.

As Patrick Thibodeau points out in Computerworld, “The elimination of jobs because of automation will happen anyway.” Some experts think that robots and computers will “replace one third of all workers by 2025.”

Bob Bacon must know this.

Gregg’s Restaurants is a pioneer in the computerization of restaurants. Most of the millions made by Bill and Ted Fuller, owners of the small chain, has come from POSitouch, “the food service industry’s most feature rich POS system.” I’ve heard rumors that the entire Gregg’s Restaurant chain is a loss leader, maintained to demonstrate the POSitouch system to interested buyers.

If robots were able to do the work needed to replace people in restaurants, POSitouch would be in a position to know. 

The information Bacon and Simmons presented about the hamburger machine is probably untrue, because if the technology existed to automate the burger making process, McDonald’s would already be using it. 

Instead, McDonald’s is investing in ordering kiosks, like ATMs in banks or the self-checkout machines at supermarkets. And it’s doubtful that these kiosks could be prevented if the employees agreed to work for less money.

How can any worker live on less than it takes to maintain an iPad?

John Simmons made the additional point that an increase in the minimum wage is basically unnecessary because, if you are on minimum wage then “you are probably getting earned income tax credits, you’re getting Medicare, you’re getting all the social programs which are allowing you to offset all the inflationary issues because you’re not paying for them anymore.”

That’s true. Low wage workers are not paying for all this government assistance. Taxpayers are. Rep Bennett testified that Walmart has nine locations in Rhode Island and pays $9 an hour. Their revenue is $476.3 billion. Rhode Island subsidizes Walmart’s labor costs through social services. 

Raising the minimum wage would force Walmart to pay its own labor costs, and allow more people to live without government assistance.

This could go a long way towards Speaker Nicholas Mattiello’s dream of a world without a social safety net.

Some legislators helped those speaking against the minimum wage with their testimony by lobbing out leading questions, as evidenced by this exchange between Republican Representative Antonio Giarusso and Bob Bacon:

“What is minimum wage?” asked Giarusso, “Is it a living wage, is it somebody just getting out of school, making their way, trying to learn the ropes? Not to put you on the spot, but of all your employees, how many of them are making a minimum wage or something really close to it and are the breadwinners in their households?”

“The breadwinners?” asked Bacon before answering, “Zero.” Two which Giarrusso said with satisfaction, “I thought that would be the answer.”

Penelope Kyritsis, representing RI National Organization for Women, said that approximately 60% of minimum wage workers are women, based on a report from the National Women’s Law Center. Most of these women have children and no spouse to rely on, meaning that they are the main breadwinners in their family.

A typical minimum wage worker, according to Kyritsis, contrary to popular belief, is not a teenager. The average age of a minimum wage worker is 35, according to the United States Department of Labor, and 88% are at least 20 years old.

A full report on the benefits of raising the minimum wage in Rhode Island to $10.10 can be found here. It should be noted that a single person with no children needs to make $11.86 an hour, to not be in poverty.

If there are any doubts about the cozy relationship between our General Assembly and the business interests in Rhode Island, there’s this exchange I’ve reproduced in comics form.

 

Right now, business owners and lobbyists have the reigns of the State House. They are pursuing an economic agenda that has only benefited those at the top and almost never those who struggle at the margins.

If low wage workers want fair treatment at the State House, they have to organize and demand it.

Steve Ahlquist is a writer, artist and current president of the Humanists of Rhode Island, a non-profit group dedicated to reason, compassion, optimism, courage and action. The views expressed are his own and not necessarily those of any organization of which he is a member.

His photos and video are usable under the Creative Commons license. Free to share with credit.

Consider supporting Steve Ahlquist by sending a donation through PayPal to the email below:

Email: atomicsteve@gmail.com
Twitter: @SteveAhlquist

"We must take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented.” - Elie Weisel