I read some discussion on another thread about the minimum wage. Add to that a bunch of research Ive done in the last few days on robotics and AI, Im left with a pretty grim outlook regarding low paying jobs.
In short, robotics and AI are happening, and they are going to happen at faster and faster rates. It truly is a renaissance time for those industries. Where they end up is anyone's guess, but the AI one has some pretty sobering possibilities that for the most part I want to keep beyond the scope of this post.
What I want to focus on is what economic impacts will they have in the intermediate 10-20 year term. From an employment point of view, what will go first are the least complex and most repetitive jobs. Unfortunately, that is going to eliminate huge amounts of demand for these jobs, and commensurate wages will plummet of what jobs that are left. As the sectors advance, more and more complex jobs will be eliminated.
The AI and robotics are coming, as sure as the sun rises, as anyone who doesn't embrace these technologies risks being left far behind. (AI will be the first known technology with the ability to create other technology). Back again to the question of how fast?
It is a noble notion to want to eliminate poverty and raise low income wages, but as always we need to remember these things in a market context. AI and robotics will increase as the demand increases for them. What will increase the desire of a company to invest in such technology? Of course, that answer is labor costs and related burden. Make it cheaper for a company to buy robots to replace workers, and that is exactly what will and must happen, for any company in the sector who didn't would be soon bankrupt. Long story short, how ironic is it that raising the minimum wage and commensurate FICA taxes, Medicare tax, health care mandates, vacation, etc., etc, would lead directly to the elimination of those very jobs? Put another way, robots are going to be more and more a cost effective labor substitute. As labor, the last thing you should be doing in that situation is raising your prices.
In the end, those jobs are toast, it really us just when. These are economy changing technologies, especially when used in concert. I wish I knew a real (market based) solution to this. Non market based solutions generally just make things worse through reducing overall efficiency and value.
At this time, it does not look good.
In short, robotics and AI are happening, and they are going to happen at faster and faster rates. It truly is a renaissance time for those industries. Where they end up is anyone's guess, but the AI one has some pretty sobering possibilities that for the most part I want to keep beyond the scope of this post.
What I want to focus on is what economic impacts will they have in the intermediate 10-20 year term. From an employment point of view, what will go first are the least complex and most repetitive jobs. Unfortunately, that is going to eliminate huge amounts of demand for these jobs, and commensurate wages will plummet of what jobs that are left. As the sectors advance, more and more complex jobs will be eliminated.
The AI and robotics are coming, as sure as the sun rises, as anyone who doesn't embrace these technologies risks being left far behind. (AI will be the first known technology with the ability to create other technology). Back again to the question of how fast?
It is a noble notion to want to eliminate poverty and raise low income wages, but as always we need to remember these things in a market context. AI and robotics will increase as the demand increases for them. What will increase the desire of a company to invest in such technology? Of course, that answer is labor costs and related burden. Make it cheaper for a company to buy robots to replace workers, and that is exactly what will and must happen, for any company in the sector who didn't would be soon bankrupt. Long story short, how ironic is it that raising the minimum wage and commensurate FICA taxes, Medicare tax, health care mandates, vacation, etc., etc, would lead directly to the elimination of those very jobs? Put another way, robots are going to be more and more a cost effective labor substitute. As labor, the last thing you should be doing in that situation is raising your prices.
In the end, those jobs are toast, it really us just when. These are economy changing technologies, especially when used in concert. I wish I knew a real (market based) solution to this. Non market based solutions generally just make things worse through reducing overall efficiency and value.
At this time, it does not look good.
