There are political movements to push the federal minimum hourly wage to $15. Raising the minimum wage has popular support among Americans. Their reasons include fighting poverty, preventing worker exploitation and providing a living wage. For the most part, the intentions behind the support for raising the minimum wage are decent. But when we evaluate public policy, the effect of the policy is far more important than intentions. So let’s examine the effects of increases in minimum wages.
The average wage for a cashier is around $10 an hour, about $21,000 a year. That’s no great shakes, but it’s an honest job for full- or part-time workers and retirees wanting to earn some extra cash. In anticipation of a $15-an-hour wage becoming federal law, many firms are beginning the automation process to economize on their labor usage.
Panera Bread, a counter-serve cafe chain, anticipates replacing most of its cashiers with kiosks. McDonald’s is rolling out self-service kiosks that allow customers to order and pay for their food without ever having to interact with a human. Momentum Machines has developed a meat-flipping robot, which can turn out 360 hamburgers an hour. These and other measures are direct responses to rising labor costs and expectations of higher minimum wages.
Here’s my question to supporters of higher minimum wages: How compassionate is it to create legislation that destroys an earning opportunity? Again, making $21,000 a year as a cashier is no great shakes, but it’s better than going on welfare, needing unemployment compensation or idleness. Why would anybody work for $21,000 a year if he had a higher-paying alternative? Obviously, the $21,000-a-year job is his best-known opportunity. How compassionate is it to call for a government policy that destroys a person’s best opportunity? I say it’s cruel.