Read on. I said the fast food industry. I believe in some places Wendy’s or McDonalds has raised their min wage to $15/hour, but with that has come more automation. So, less people are being hired.
Also, one must ask does this make the cost of fries, Big Mac, or a Wendy’s Chicken sandwich go up.
Thomas Sowell would be shaking his head. I jest but Sowell has been my idol since my days taking econ classes at UCLA and I have read every one of his books and articles which seems like forever. I wish he would run this world.
No business will do anything willingly if it did not increase profits. And, of course, raising labor cost increases the cost of doing business. They will only raise base pay due to competition and if they are able to compensate elsewhere. This could be by raising the cost to the consumer but this is always the last resort. That is the option most often done when it is the government that mandates that they pay more. If they do it from a business standpoint then raising consumer cost is the last desperate option that most choose not to do. That leaves automation as a viable option. Have machines replace people so you don't have to hire as many employees.
I remember Sowell's response when posed this question about automation/technology replacing human labor. "So what?" You never, ever want to put restrictions on technology to spare human jobs. Never. If you did we'd still be having blocks of ice delivered to our homes on horse and carriage.
As technology advances and jobs are lost, new jobs are created that more than compensates for less efficient human labor. Anytime you can reduce the cost of doing business and increase the profit margin only then can expand and grow, not only your own business but the economy as a whole.
Say you own a fast food drive in and you employ ten workers. Now you have some machine that can flip the burgers at the exact time you want them every time and put them on a bun ten patties at a time. It could be anything really but say it cuts the need for labor down to five employees so you get rid of the other five. But now you are making more money. Now you can save and invest, which grows the economy. Maybe that savings can be translated into opening up another drive in with five employees. So instead of having one drive in with ten employees, you have two with five each.
Again, the basic economic principle is to never to reject the advances in technology, to do things better and cheaper, because you want to save an individual job. New, better and more jobs are always the result. And it also increases the standard of living for the consumer because they get better products for less cost. I remember when the VHS was being replace by the DVDs. All the talk of loss jobs. All those VCR machines, VHS rental stores going out of business. And they did. And we are better off for it.
