More lefties learn the glory of the 15 dollar minimum wage....unemployment.....

[Brain357]

Why don't we raise it to 20 dollars, 25, 30?

I think you know answer. Minimum wages increases are typically in a range of 10% to 20%. The primary reasons we raise minimum wage are reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ('wage compression'); and small price increases. There have been a number of studies that conclude that moderate increases in minimum wage do not effect job growth. There can be some layoffs of course, but minimum wage puts more money in the hands of people that spend ever dime of it which can offset any negative effect.

Although there is no evidence that moderate minimum wage increases have any negative effect on the economy, there is no evidence that they have any positive effect.

On one hand you admit there are layoffs. Than in the same breath you suggest there are no effects on job growth(I presume you mean employment). Then you go on to say there is no evidence of positive effects. You need to get your story straight here. Perhaps you should reevaluate holding a position you say produces layoffs and has no measured positive effect.

Layoffs(unemployment) certainly seems like an negative effect to me, but perhaps we have differing views on this matter.

The CBO projects approximately 500,000 to 1,000,000 jobs will be lost raising minimum wage to $10.10 by 2016, that isn't even touching the $15 dollar an hour issue. But this is basic economics, when you create price controls, that is, a price floor, in this case, a wage floor, you create a surplus(in this case, a surplus of workers not employable at the above market price set by the government). So were not even just talking about the unemployment we see created, but the potential jobs we don't see created.

The Effects of a Minimum-Wage Increase on Employment and Family Income Congressional Budget Office

If we ARE going to have a minimum wage, attach it to CPI. But really, at the end of the day, minimum wage is bad economic policy that harms more than it hurts. A $15 dollar an hour wage would harm the very people it purports to help, by making many of them unemployable. They will just hire a more skilled and productive laborer at that wage and prevent the lower rung of the labor market from entering to begin with.

Myth: Increasing the minimum wage will cause people to lose their jobs.

Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016.

Minimum Wage Mythbusters - U.S. Department of Labor

I guess they don't view hundreds of thousands losing there job as a discernable effect. I disagree.

Min wage has increased many times. It has not ever led to increased unemployment.

 

[Spare_change]

They absolutely can. Talk to me when you've spent 25 years working with em.
You truly dont know shit about automation.

A machine that can hold tenths of a thousands can make a burger without breaking a sweat.

There is no question as to whether it's possible. The question is whether a machine can be built at a reasonable price to provide burgers to the restaurant's specification, prepare the other foods the kitchen help must prepare, and be flexible enough to prepare other items the restaurant may decide to add to their menu.

The cost comes in when you start talking about precision.
The cost of precision when your talking about cutting tomatoes is a joke.

I would say the cost would be pretty high for a machine that would cook everything the kitchen prepares and any items management might want to add to the menu plus meet all customer requests.

And again you dont know shit.
A machine that can build a burger is childs play compared to a machine that can build a car block.

Of course you can build a burger machine but can you build a burger machine that meets the current and future needs of the restaurant at a price that makes sense.

... to be determined by the cost of labor.

 

[Spare_change]

Why don't we raise it to 20 dollars, 25, 30?

I think you know answer. Minimum wages increases are typically in a range of 10% to 20%. The primary reasons we raise minimum wage are reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ('wage compression'); and small price increases. There have been a number of studies that conclude that moderate increases in minimum wage do not effect job growth. There can be some layoffs of course, but minimum wage puts more money in the hands of people that spend ever dime of it which can offset any negative effect.

Although there is no evidence that moderate minimum wage increases have any negative effect on the economy, there is no evidence that they have any positive effect.

On one hand you admit there are layoffs. Than in the same breath you suggest there are no effects on job growth(I presume you mean employment). Then you go on to say there is no evidence of positive effects. You need to get your story straight here. Perhaps you should reevaluate holding a position you say produces layoffs and has no measured positive effect.

Layoffs(unemployment) certainly seems like an negative effect to me, but perhaps we have differing views on this matter.

The CBO projects approximately 500,000 to 1,000,000 jobs will be lost raising minimum wage to $10.10 by 2016, that isn't even touching the $15 dollar an hour issue. But this is basic economics, when you create price controls, that is, a price floor, in this case, a wage floor, you create a surplus(in this case, a surplus of workers not employable at the above market price set by the government). So were not even just talking about the unemployment we see created, but the potential jobs we don't see created.

The Effects of a Minimum-Wage Increase on Employment and Family Income Congressional Budget Office

If we ARE going to have a minimum wage, attach it to CPI. But really, at the end of the day, minimum wage is bad economic policy that harms more than it hurts. A $15 dollar an hour wage would harm the very people it purports to help, by making many of them unemployable. They will just hire a more skilled and productive laborer at that wage and prevent the lower rung of the labor market from entering to begin with.

You choose to ignore what I said, "There can be some layoffs of course, but minimum wage puts more money in the hands of people that spend ever dime of it which can offset any negative effect." Of course there will be some negative effects but there are also positive effects which you choose to ignore. Higher wages in the hands of people who spend every cent they earn to survive will create jobs, reduce costly employee turnover and increases productivity Also, the $10.10 minimum wage raises 900,000 employees above the poverty level reducing dependence of government support.

I'm not in favor of a $15 minimum wage increase.

But as you said, there is no evidence of all this new money from minimum wage creating new jobs. You talk about making people less dependent on welfare. What about those who lost their jobs and are more dependent on welfare after the fact?

History proves that a raise in the minimum wage results in a 3% increase in unemployment which levels off within 2 years.

This "we have to keep wages low for the sake of the minimum wage employee" argument is STUPID.

You seriously believe that the historical model holds true when you increase the minimum wage by 90%???? I would challenge you to show me ...

 

[OohPooPahDoo]

Here are more people being enlightened with basic economics.....

Seattle Minimum Wage Kills Jobs Hurts Students PJ Tatler

Students at the University of Washington in Tacoma are getting an object lesson in the value of a dollar. As economic dominoes fall in the wake of a municipal minimum wage hike to $15 per hour in Seattle, university students find themselves digging deeper into their pockets to cover higher prices resulting from the mandate.




Elsewhere, small-business employees initially thrilled by the “raise” granted them by the city have since learned that they’ll be losing their jobs later this year. Red Alert Politics reports:


[Z Pizza] owner Ritu Shah Burnham said she just can’t afford the city’s mandated wage hikes.


“I’ve let one person go since April 1, I’ve cut hours since April 1, I’ve taken them myself because I don’t pay myself,” she told Q13. “I’ve also raised my prices a little bit, there’s no other way to do it.”

Seems like you are full of shit

seattle unemployment rate - Google Search

 

[Spare_change]

They absolutely can. Talk to me when you've spent 25 years working with em.
You truly dont know shit about automation.

A machine that can hold tenths of a thousands can make a burger without breaking a sweat.

There is no question as to whether it's possible. The question is whether a machine can be built at a reasonable price to provide burgers to the restaurant's specification, prepare the other foods the kitchen help must prepare, and be flexible enough to prepare other items the restaurant may decide to add to their menu.

The cost comes in when you start talking about precision.
The cost of precision when your talking about cutting tomatoes is a joke.

I would say the cost would be pretty high for a machine that would cook everything the kitchen prepares and any items management might want to add to the menu plus meet all customer requests.

Again ....you dont know shit.
Let me know when you know you know shit about automation.

The way you talk I don't understand why anyone is still hiring people to make food. I guess it's because in reality the machines you claim can be made so easily don't exist. You still have provided no links to support your wild claims.

C'mon --- don't be disingenuous. You've seen a link to a burger machine .... quit pretending you didn't.

 

[Steinlight]

Why don't we raise it to 20 dollars, 25, 30?

I think you know answer. Minimum wages increases are typically in a range of 10% to 20%. The primary reasons we raise minimum wage are reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ('wage compression'); and small price increases. There have been a number of studies that conclude that moderate increases in minimum wage do not effect job growth. There can be some layoffs of course, but minimum wage puts more money in the hands of people that spend ever dime of it which can offset any negative effect.

Although there is no evidence that moderate minimum wage increases have any negative effect on the economy, there is no evidence that they have any positive effect.

On one hand you admit there are layoffs. Than in the same breath you suggest there are no effects on job growth(I presume you mean employment). Then you go on to say there is no evidence of positive effects. You need to get your story straight here. Perhaps you should reevaluate holding a position you say produces layoffs and has no measured positive effect.

Layoffs(unemployment) certainly seems like an negative effect to me, but perhaps we have differing views on this matter.

The CBO projects approximately 500,000 to 1,000,000 jobs will be lost raising minimum wage to $10.10 by 2016, that isn't even touching the $15 dollar an hour issue. But this is basic economics, when you create price controls, that is, a price floor, in this case, a wage floor, you create a surplus(in this case, a surplus of workers not employable at the above market price set by the government). So were not even just talking about the unemployment we see created, but the potential jobs we don't see created.

The Effects of a Minimum-Wage Increase on Employment and Family Income Congressional Budget Office

If we ARE going to have a minimum wage, attach it to CPI. But really, at the end of the day, minimum wage is bad economic policy that harms more than it hurts. A $15 dollar an hour wage would harm the very people it purports to help, by making many of them unemployable. They will just hire a more skilled and productive laborer at that wage and prevent the lower rung of the labor market from entering to begin with.

Myth: Increasing the minimum wage will cause people to lose their jobs.

Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016.

Minimum Wage Mythbusters - U.S. Department of Labor

I guess they don't view hundreds of thousands losing there job as a discernable effect. I disagree.

Min wage has increased many times. It has not ever led to increased unemployment.

That's not true. And it certainly prevents unemployment from decreasing.

 

[Brain357]

There is no question as to whether it's possible. The question is whether a machine can be built at a reasonable price to provide burgers to the restaurant's specification, prepare the other foods the kitchen help must prepare, and be flexible enough to prepare other items the restaurant may decide to add to their menu.

The cost comes in when you start talking about precision.
The cost of precision when your talking about cutting tomatoes is a joke.

I would say the cost would be pretty high for a machine that would cook everything the kitchen prepares and any items management might want to add to the menu plus meet all customer requests.

Again ....you dont know shit.
Let me know when you know you know shit about automation.

The way you talk I don't understand why anyone is still hiring people to make food. I guess it's because in reality the machines you claim can be made so easily don't exist. You still have provided no links to support your wild claims.

C'mon --- don't be disingenuous. You've seen a link to a burger machine .... quit pretending you didn't.

Yes and I am not aware of anyone using them. Link?

 

[Spare_change]

There are no machines that can grind meat, shape burger patties, cook and assemble burgers, so your argument is moot..

Actually, we have machines that can grind meat, shape burger patties, and cook burgers - do you seriously believe burger assembly is an engineering challenge we can't solve?

How many restaurants serve nothing but hamburgers?

There are no machines that can grind meat, shape burger patties, cook and assemble burgers, so your argument is moot..

Actually, we have machines that can grind meat, shape burger patties, and cook burgers - do you seriously believe burger assembly is an engineering challenge we can't solve?

Why do we still have cooks?

Fast found restaurants don't just serve hamburgers. A McDonald kitchen prepares fried and broiled chicken sandwiches, fish sandwiches, chicken nuggets, snack wraps, a multitude of special burgers, a variety of egg muffin sandwiches, pancakes, eggs, sausages, biscuits, and constantly changing specials.

Unless your restaurant served just burgers, a burger machine with have a minimal impact on employment because the kitchen staff is still needed to prepare other food.

There is also another problem with automation. It's not flexible. The machine can only perform the tasks that it has been built to perform. So management's menu is limited by the machine; not a good idea since fast food restaurants have built their menu by trying out new menu offerings.
.

When people cost more than machines, and machines can do a better job than people, machines will do the job. It used to be that a man could make a career bolting or welding car parts together on an assembly line. Not any more. It used to be that a woman could make a career out of making clothes by hand. Not any more. It used to be that a computer programmer could make a career out of writing file I/O and screen painting routines. Not any more.

Correct, but slightly different. In that machines weren't introduced to the auto building industry strictly because of cost of human labor. They were also introduced to speed up production AND to build more precise vehicles.

McDonalds, for instance, doesn't really need to be able to build 600 burgers every hour of every day , or do they have to meet such strict tolerances for safety concerns and such.

So, it becomes an economy of scale question. And there is noway McDonalds could justify the upfront costs of a half million dollar machine the way an auto plant, or other assembly line company, could because how much product they sell is not going to increase. They are already selling as many burgers as they can sell.

It's not about quantity - it's not about production - it's about the cost of labor. It's really THAT simple ....

Everybody talks about the historical track of raising minimum wage. First, we've never raised the minimum wage by 90%. We have never raised the minimum wage to surpass the next level of wages (it's not just about minimum wage workers - what about your $10/hour worker? $12/hour worker? His wages have to be raised commensurate with the minimum wage worker.)

Restaurants use the 30-30-30 model, as we've discussed. We've also agreed that virtually all restaurant workers make less that $15/hour. So, let's assume that there is a direct corollary between the wage increase and price increase. Changing the pricing model to 50-30-30 drives the price up 20%.

Yes, in the past, we have been able to absorb the increases in minimum wage, because they have been relatively insignificant (1, they didn't go up much, and 2, there aren't that many who benefit), but an increase of the size being proposed means MOST people in the restaurant business will get a raise, further exacerbating the impact on retail price.

Two things to keep in mind ---- 1) math is math ... you can't change the math, and 2) nobody seriously believes the owner is going to cut his personal income in order to facilitate and mandated labor cost increase.

 

[Brain357]

I think you know answer. Minimum wages increases are typically in a range of 10% to 20%. The primary reasons we raise minimum wage are reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ('wage compression'); and small price increases. There have been a number of studies that conclude that moderate increases in minimum wage do not effect job growth. There can be some layoffs of course, but minimum wage puts more money in the hands of people that spend ever dime of it which can offset any negative effect.

Although there is no evidence that moderate minimum wage increases have any negative effect on the economy, there is no evidence that they have any positive effect.

On one hand you admit there are layoffs. Than in the same breath you suggest there are no effects on job growth(I presume you mean employment). Then you go on to say there is no evidence of positive effects. You need to get your story straight here. Perhaps you should reevaluate holding a position you say produces layoffs and has no measured positive effect.

Layoffs(unemployment) certainly seems like an negative effect to me, but perhaps we have differing views on this matter.

The CBO projects approximately 500,000 to 1,000,000 jobs will be lost raising minimum wage to $10.10 by 2016, that isn't even touching the $15 dollar an hour issue. But this is basic economics, when you create price controls, that is, a price floor, in this case, a wage floor, you create a surplus(in this case, a surplus of workers not employable at the above market price set by the government). So were not even just talking about the unemployment we see created, but the potential jobs we don't see created.

The Effects of a Minimum-Wage Increase on Employment and Family Income Congressional Budget Office

If we ARE going to have a minimum wage, attach it to CPI. But really, at the end of the day, minimum wage is bad economic policy that harms more than it hurts. A $15 dollar an hour wage would harm the very people it purports to help, by making many of them unemployable. They will just hire a more skilled and productive laborer at that wage and prevent the lower rung of the labor market from entering to begin with.

Myth: Increasing the minimum wage will cause people to lose their jobs.

Not true: A review of 64 studies on minimum wage increases found no discernable effect on employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016.

Minimum Wage Mythbusters - U.S. Department of Labor

I guess they don't view hundreds of thousands losing there job as a discernable effect. I disagree.

Min wage has increased many times. It has not ever led to increased unemployment.

That's not true. And it certainly prevents unemployment from decreasing.

Yes it is true.

 

[Spare_change]

It has nothing to do with 'want[ing] people to make so little' - it's about not wanting to pay more for labor than it's worth.

Today, nobody uses the hamburger-making machine because minimum wage labor is less expensive - raise the wages and see what happens.

And, I can guarantee when Walmart employees cost more than robots, they're gone.

Given nobody is using burger making machines I think a min wage increase is pretty safe. Just like every other one has been safe.

Where do YOU think the tipping point is? $10? $15? $20? $50?

You better be right ....

Yes I know you are trying to scare everyone. I'm certain it can be increased without the sky falling. It always has been.

Only as long as the increase has been small enough to not really matter. Let's put it this way. Have all those increases lowered poverty, or has poverty held pace and even increased since the MW was instituted?

What increases are you talking about? In real dollars the minimum wage is worth 75% of what it was in 1968. That's not a raise, that's a decrease LOL

LOL --- using real spending power is a non sequitur. It's a cheap excuse to support a fallacious argument.

 

[Spare_change]

Not yet, we'll see.

Again their customer base is low income. Increasing min wage increases sales. Unemploying people with machines is untested and decreases sales.

Lower prices increase sales. Higher prices decrease sales. When machines cost less to do a job than people do, prices go down. Low income people do what when prices go up? What do they do when prices go down? For the answer, ask yourself this. Where do low income people shop for clothes, Macy's or Wal-Mart?

If prices would go down and it was feasible they would be using machines now. They however don't.

Keep raising the cost of labor, and you will eventually reach a tipping point in which using machines makes more fiscal sense. Then, you will see it happen.

 

[Spare_change]

They absolutely can. Talk to me when you've spent 25 years working with em.
You truly dont know shit about automation.

A machine that can hold tenths of a thousands can make a burger without breaking a sweat.

There is no question as to whether it's possible. The question is whether a machine can be built at a reasonable price to provide burgers to the restaurant's specification, prepare the other foods the kitchen help must prepare, and be flexible enough to prepare other items the restaurant may decide to add to their menu.

The cost comes in when you start talking about precision.
The cost of precision when your talking about cutting tomatoes is a joke.

I would say the cost would be pretty high for a machine that would cook everything the kitchen prepares and any items management might want to add to the menu plus meet all customer requests.

Again ....you dont know shit.
Let me know when you know you know shit about automation.

The way you talk I don't understand why anyone is still hiring people to make food. I guess it's because in reality the machines you claim can be made so easily don't exist. You still have provided no links to support your wild claims.

Damn --- wake up!!!

Nobody said these machines were in use today. What they are saying is that there will come a point in time when the cost of human labor exceeds the cost of automation. We've shown the technology exists - it's a simple matter of dollars and cents.

When that happens, machines are in -- and people are out. It's simple economics.

 

[Spare_change]

I try to read the studies, the statistics, the long term projections and reflections, but I always come back to what I know from personal experience...

As a manager for a number of small businesses run by family friends I've had to go without paychecks on countless occasions so the bills got paid. I've counseled the owner's numerous times that we're not even breaking even, much less making a profit, that something has to give; prices go up, streamline, someone get laid off... When the prices are already higher than the local market can support, things are efficiently run, there's nothing left but to let people go; so I end up firing these kids. Everyone thinks I should feel bad about it, but I don't because they get fired for a reason; because they are constantly late, because they sluff their job off on their co-workers, because "its too hard" when in reality it's not.

When I go into some fast food place, or the checkout at the store, or a local coffee shop, I see these same types everywhere; clueless, wandering around with no care for their job, etc. These are the people who are going to get fired if min wage gets shot up. I don't particularly care about their fate, they can starve until they learn how to be /worth/ $10-$15/h, but I also know that those people are going to have a hard time "getting away with" the "minor" shit we managers let them get away with for a lower price. I almost find it funny that these people don't realize we /see/ the crap they're doing and let it go because it's not worth /our/ time to deal with, because it's not really affecting our bottom line so we let them get away with shit. Then they whine about not getting paid enough and we're like, nope. Not because we're greedy like all these 99% want to think, but because that employee isn't /worth/ more pay.

All the arguments for making a living wage, for income equality, such a foolish and short-sided view over what 3-5% of the employed population. These 3-5% of people who can't seem to get themselves over minimum wage's /worth/ in the eyes of an employer, or who can't qualify to do a better paying job... They're not going to make it through this with a "living" wage, they're going to have less hours, or get canned. So basically all this whining for an increased min wage, is not going to help these 3-5% of folks, it's going to drive more of them into poverty. I /almost/ feel bad for them all, but I know the deserving ones will rise to the challenge, they'll get their 2yrs of experience, work harder, and get "real" jobs that not only support their family, but buy them some nice things to boot. The rest of them though... The slackers, the always late's, the "its too hard's", the ones who don't care about their job - they are going to be in for a rude awakening.

I believe I've said it before; by all means, crank up that minimum wage, those of us who know better are going to be shaking our heads when all the "fluff workers" learn just how "nice" most owners and managers have actually been. The corporate world will be even more cut-throat than it already is, those types won't even get their foot in the door before someone politically assassinates their career, just to get ahead of them. Then, yet again, those people will find themselves stuck in a minimum wage job that can't pay their rising bills, and of course whining that someone else is making more then they do...

Managers will still make more, CEO's will still make more, and the wealthy are not going to feel the effects of the higher prices as they make more. Companies will continue to operate on established budgets that dictate how much they can afford to pay our employees, they will continue to recognize the global economy and hire in other countries, they will continue to invest in the stock market and [potentially] make more than those who can't afford to do so, and just maybe all the bleeding hearts will eventually understand that all the tears and compassion in the world cannot help these spoiled US employee's who do not want to better themselves, who do not want to work, who do not /care/ to make more of their lives than dead-end entry-level skill jobs which have a set cap on wages.

Well stated.

The rest would do well to take heed. THIS is reality ...

 

[Spare_change]

Keep in mind that low income people are a big customer base for fast food. If workers are replaced by machines that is unemploying the customer base. That is bad for sales.

Dollars and cents, my friend .... they have no feelings.

 

[Spare_change]

I think folks are forgetting that in the past robotics were not at the state they are today so you're not really considering the full economic picture when you argue "it's never caused job losses in the past" with min wage increases - as well as the argument against automation.

Incoming wall-of-text here, but while the min wage increaser's, 99% vs 1%, and "evil corporation" haters are busying themselves looking for any flaw to nail a CEO or company to the wall for "feelings" based slights, those in control are busy reading important business stuff - like the following, and that is but a small sample of the robotics door that is now opening to nearly every business. Businesses, and those who run them, constantly look to the future of the companies survival and prosperity in an ever changing world and economy, not merely the present economic outrage, or past transgression's that worker's do. The more the worker's argue for unions, expensive health care, other benefits, tighter safety restrictions, and slap them with bad PR and even lawsuits about transgressions of our employee's, the more businesses see those things /all/ go away with robotics.

This is the trend, /the/ trend, right now. I've highlighted and pulled out bits of just a couple recent articles I've run across in my free time this year alone; and I'm not even working for anyone. I guarantee you there are high paid exec's looking at this right now and considering how they can lower their labor costs and liabilities...

IFR Press Release - IFR International Federation of Robotics

"Chicago, 23 March 2015 - "Global demand for industrial robots in 2014 reached more than 200,000 units for the first time," said Arturo Baroncelli, President of the International Federation of Robotics (IFR) in Chicago. "Strongest drivers of the growth were the automotive industry followed by the electronics industry. Based on the preliminary results of the global statistics on industrial robots, the IFR estimates that about 225,000 units were sold in 2014, 27% more than in 2013."

"China was again by far the largest market destination for industrial robots in 2014. About 56,000 units were sold, 54% more than in 2013. Thereof, Chinese robot suppliers delivered 16,000 units and the international robot suppliers delivered about 40,000 units. Due to considerable investments of the automotive industry, South Korea was the second largest destination with about 39,000 units. It was followed by Japan, the United States and Germany. The five largest robot markets represent 75% of the total global sales in 2014."


Why China May Have the Most Factory Robots in the World by 2017 - Real Time Economics - WSJ

"A perfect storm of economic forces is fueling the trend. Chinese labor costs have soared, undermining the calculus that brought all those jobs to China in the first place, and new robot technology is cheaper and easier to deploy than ever before."


Why China s Factories Will Automate

"Chinese workers are becoming more educated, their salary, benefit, and lifestyle expectations are rising, and because of the demographics of single-child families, their numbers are shrinking. If cheap labor isn’t dead in China, it is terminally ill."

[...]

The Big Ones First

"Manufacturers are facing a stark choice: raise prices, downsize, or automate. Raising prices isn’t an option in a Wal-Mart world where places like Malaysia, Bangladesh, Mexico, Eastern Europe and even parts of the U.S. are already offering competitive pricing. Downsizing only offers a short-term answer when economies of scale are driving manufacturing, and is really only an option for companies who can make the shift to higher value-added products.

Which leaves automation as the answer for large manufacturers, especially contract manufacturers like Foxconn, Flextronics, and Quanta. Unable to depend on masses of workers lining up at their gates willing to work for a modest daily wage, each is thinking long and hard about automation.

Robots Don’t Jump

Beyond rising wages, law and custom in China leave companies liable for a range of benefits. Robots, on the other hand, do not require the company to invest in the real estate for dorms, cafeterias, break rooms, and other facilities, enabling the company to utilize all of its floor space for production, logistics, and support. What is more, robots don’t get sick, charge overtime, demand bonuses, or require companies to pay the additional “social” costs to the state that it would be required to pay for each worker.

And equally important, robots don’t jump out of windows. The Foxcon story has proven that there is a perception liability that comes with a larger number of workers. Whether Foxconn has ten thousand workers or two million, a single suicide or accident affects hurts the company just as much. Statistically the likelihood of such incidents rises as the number of employees grows. The coverage given to the company’s HR troubles proves that more workers mean more problems, so the best approach from the company’s point of view is to hire fewer workers.

I talk a lot about Foxconn and the technology outsourcing firms, but they are not alone. The automobile industry is a global pioneer of robotics, and Chinese factories are increasing the number of robots they are using. The packaged foods sectors rely on automation.

It is fair to say, though, that every sector is considering automation. Until last June I lived about 400 meters from the Beijing International Exhibition Center, and in 2013 the second most popular trade show – right after the Beijing International Auto Show – was the production automation exhibition. That’s apocryphal, but it is telling, and industrial robotics is about to get very hot in China."


BCG Puts Pricetag on the Rise of the Robots - Real Time Economics - WSJ

"The boom isn’t limited to advanced economies either, says a new report [*excerpts below] from the Boston Consulting Group. It’s no big surprise that demand is highest in notoriously robot-happy places like South Korea and Japan. But the fastest-growing market is actually China, a country that built its industrial backbone on the basis of cheap labor.

According to the report, annual spending on robots will reach about $27 billion next year and more than double to nearly $67 billion by 2025. “As prices come down and new performance thresholds are crossed, robots are migrating from industrial and military uses to commercial applications and the personal-services realm,” said the report.

The fastest-growing area for robots in coming years, says BCG, will be “personal” uses like entertainment, cleaning, and education—which is expected to grow from $1 billion in 2010 to $9 billion in 2025. However, industrial uses will remain the bread and butter of the industry, accounting for the lion’s share of the market in the future, as it is today.

The trend is truly global. Robots are now used to slice and pack lunch meats in Sweden and churn out razors in the Netherlands. “At some factories,” the report notes, “robots are even building other robots, producing about 50 robots per 24-hour shift and operating unsupervised for as long as 30 days at a time.”

bcg.perspectives - The Rise of Robotics

"today’s state-of-the-art robots are a far cry from that outdated stereotype. And they are showing up for work. Increasingly flexible, responsive, sensing—even humanlike—robots are beginning to augment and replace labor in a wide range of industries: a megatrend that is transforming the economics of manufacturing and reshaping the business landscape.

Already used to fight wars, remove dangerous land mines, and fill customer orders, robots can also clean, dance, and play the violin; assist with surgery and rehabilitation, bathe elderly patients, measure and deliver medication, and offer companionship; and provide disaster relief, report the news, and drive cars. In short, robots can perform quite a few of the jobs that humans currently do—often more efficiently and at a far lower cost.

Because robots can sharply improve productivity and offset regional differences in labor costs and availability, they’ll likely have a major impact on the competitiveness of companies and countries alike. For instance, countries with a greater number of robotic programmers and robotic infrastructure could become more attractive to manufacturers than countries with cheap labor. Changes such as these will fundamentally alter the competitive dynamics of the global economy."

[...]

"Initially, robots were used mainly for dirty, dull, repetitive, or dangerous tasks that did not require high precision, such as painting car doors or spot welding. Today’s robots, by contrast, are moving into a new range of precision applications far beyond the manufacturing realm. For instance, they’re enabling food processors to make products untouched by human hands. At Sweden-based Charkman Group, robots slice and pack high volumes of salami, ham, turkey, rolled pork, and other cooked meats. At the heart of the line is an intelligent portion-loading robot that can handle 150 picks per minute across multiple sizes and types of meat.

The fact that robotics and automation are crossing price, performance, and adoption thresholds is a clear indication that the robotic megatrend is growing in relevance and a tipping point may be near."

[...]

"In fact, as robotic technologies advance and their potential to affect more and more industries increases, the main factors holding back future adoption rates may be the concerns of politicians, the public, labor unions, and regulatory agencies, as well as human comfort levels at having robots drive our cars, care for our parents, and displace current workers."

[...]

"In the Netherlands, Philips uses 128 robots to make razors. The only humans are the nine workers who perform quality checks.

Robots can also do without lighting, heat, air conditioning, supervision, food, and bathroom breaks. As a result, “lights out” manufacturing plants that offer significant cost and energy savings are emerging. At some factories, robots are even building other robots, producing about 50 robots per 24-hour shift and operating unsupervised for as long as 30 days at a time."

[...]

"Nonindustrial applications are also emerging, changing competitive dynamics in sectors such as retail. For instance, Amazon.com, the world’s largest online retailer, paid $775 million in cash in 2012 to buy Kiva Systems, which makes warehouse robots. Small, fast, and flexible, these robots are constantly in action, moving large merchandise lots from shelves to the packing and shipping areas. Once a Kiva customer, Amazon acquired the robot maker to improve the productivity and margins in its massive network of warehouses and fulfillment centers. The move has helped Amazon maintain its low-cost advantage and stay a step ahead of the competition by providing a key advantage: the ability to offer one- and two-day guaranteed delivery for a wide range of goods. The company recently announced plans to increase the number of Kiva robots from 1,400 to 10,000 by the end of 2014, which could cut fulfillment costs for an average order by 20 to 40 percent. If Jeff Bezos has his way, robotic delivery drones will be next.

Megatrends affect different industries in distinct migration waves over time. For instance, e-commerce started with travel, books, and music, and then rapidly expanded into virtually every other product category and industry. The same dynamic is beginning to play out in the field of robotics."

[...]

Agricultural robots, or agbots, are being designed to pick fruit and vegetables, to minimize harvest time pressures, and to prepare for the day when labor laws make it tougher to get large numbers of migrant workers to help with harvesting. Tracking M&A activity related to robotics shows that new players are entering the field. (See Exhibit 2.) For instance, Google has bought more than eight robotic-related companies in the last year, prompting speculation about its plans for the future. The Google car, which drives itself and has a virtually unblemished safety record"

[...]

Robots can fundamentally change how work gets done. They can match human performance and even improve upon it in many areas. To prepare for and profit from the robotic megatrend, companies can start by identifying the following:

• Areas of Operations with High Labor Costs. Robotics can provide cost-saving alternatives in many areas and complement human workers in others.

• Tasks That People Can’t, Won’t, or Shouldn’t Do. Some jobs are too hazardous, unpleasant, or difficult for human beings—no matter how high the pay. Other tasks are just too mindless, repetitive, and boring. Robots can liberate workers from hazardous or unappealing jobs.

• Human Skill Gaps. In Japan, developers are exploring ways robots might provide nursing and elder care. Other scarce and needed skills and capabilities that robots can offer—such as data mining, rapid analysis, and super speed or strength—exist at levels not present in human beings.

• Mission-Critical Applications. Tasks that demand exceptional precision, flexibility, or speed—such as electronic-chip production—or that require maneuvering in small spaces lend themselves to robotics.

• High Complexity. The global nature of business has given rise to convoluted supply chains and vast supplier networks. Robotics offers a way to centrally manage and execute complex logistics and to customize products for different markets and even for individual customers."

Just stop with the " I oppose a raise in the minimum wage law for minimum wage employee's own good" bullshit.

Actually, you mean 'ex-employee's' own good.

 

[Brain357]

There is no question as to whether it's possible. The question is whether a machine can be built at a reasonable price to provide burgers to the restaurant's specification, prepare the other foods the kitchen help must prepare, and be flexible enough to prepare other items the restaurant may decide to add to their menu.

The cost comes in when you start talking about precision.
The cost of precision when your talking about cutting tomatoes is a joke.

I would say the cost would be pretty high for a machine that would cook everything the kitchen prepares and any items management might want to add to the menu plus meet all customer requests.

Again ....you dont know shit.
Let me know when you know you know shit about automation.

The way you talk I don't understand why anyone is still hiring people to make food. I guess it's because in reality the machines you claim can be made so easily don't exist. You still have provided no links to support your wild claims.

Damn --- wake up!!!

Nobody said these machines were in use today. What they are saying is that there will come a point in time when the cost of human labor exceeds the cost of automation. We've shown the technology exists - it's a simple matter of dollars and cents.

When that happens, machines are in -- and people are out. It's simple economics.

Sure. So you are saying nobody is using them.

 

[EverCurious]

LOL @ profit sharing. Now I simply dont believe your story at all. You have no idea of just how horribly fast food restaraunts treat their employees.

Would that be the biased media driven opinion of those workers who can't seem to make more than minimum wage?

Or the real world?
Bonuses and profit sharing for fast food managers is actually common practice ~ Fast Food Manager Salary United States

McDonalds Profit Sharing: Investing in Your Future AboutMcDonalds.com
McDonalds Bonuses: Pay Rewards AboutMcDonalds.com

I'll even explain some /why/ they do it ~ With a 78% transient worker rate average for fast food in general, and given the expense of training combined with their low manager pay standing while handing out the skills to qualify for a higher paying manager position in say retail, it is not only a retention matter, but it’s actually cheaper to give a bonus to keep an already trained manager to stay on.

The math adds up if you think about it - figure a transient worker is making $7/h and you've got to have someone to train them, even arguing that's your lowest tier manager making... you want to say $9/h? Sure. Figure the average is going to be a week for training, so we'll say 30 hours each or $480 cost to train a fresh worker.

Now extend it up the ladder - your lowest tier manager leaves for a higher paying management position, or is promoted, who has to train them? The next tier manager up, even if we figure that next tier up manager is only paid $11/h, that your new lowest tier manager is drawn from existing employees to lower the cost of training, and we only bump that $7/h worker's pay to $8/h to start off in management. Based on the same 30 hours, you're looking at an absolute /best case/ scenario hand’s on training cost of $570 total to train a pre-existing employee into management.

(There are also going to be additional costs due to a bunch of required training videos that you have to pay that new manager to watch as well; OSHA usually, I’m sure the FDA has one for safe food handling, McD corporate very likely has at least one or two. Then there are also regulation required tests, it’d be smart for corporate to have some tests, etc., etc. You’re also going to have to cover the usual duties of that next tier up manager who's busy training – you may even incur management OT costs in the process.)

Anyway, if we then factor in the transient rate of workers and figure that even 10% of the time they don’t have a qualified a manager candidate in their employee pool (aka has been there long enough, and has met standards to qualify for a promotion to management); then you’d be looking at the higher tier manager @ $11/h not only having to put in time for interviewing management candidates, but also has to spend 60 hours training a fresh employee from scratch to "manager" at $8/h. We’ll even exclude the unknown time period for interviewing, and you come up with $1,140 for training alone.

In pretty much every case, it is always cheaper for them to offer a bonus to entice /any/ manager to stay on with them. AND that's even presuming that $500 is a 'standard' bonus for any given management tier. (My son is actually a third tier manager so he probably gets a higher share of bonuses than a shift manager would - you have a number of shift managers, then there are the assistant day/night managers, then the day/night managers, then an assistant store manager, and the top tier is typically the general store manager, though the franchise owner likely gets a bonus as well which may or may not come from the "entire" bonus pool.)

Since the short term bonuses vary based on the stores annual performance (as noted by McDonalds) they probably actually end up spending even /less/ to offer that bonus program in the long run. If they’re smart they calculate the bonus off a low % of the lowest estimated profit for the upcoming quarter, then pay that quarterly. Which means, not only does the actual $$ bonus given out too all managers go down, but if any mangers quit, (a fairly high probability given their high transient rate and low qualified manager pay,) they end up not even awarding that bonus out every time to every manager (because managers leave before the full amount is actually paid out.)

Then for the higher tier managers they put in an additional long term bonus to further encourage retention; this one would likely be paid out annually. Again, not even having to pay it out every time because of the transient nature of workers and low qualified manager pay rates. And better yet, the whole bonus package put together lets them then offer smaller additional bonuses; the performance bonuses and what not to every employee on a monthly basis, often without ever actually reaching the original total bonus amount.

 

[Brain357]

Keep in mind that low income people are a big customer base for fast food. If workers are replaced by machines that is unemploying the customer base. That is bad for sales.

Dollars and cents, my friend .... they have no feelings.

So they will buy expensive machines that will lower sales? Sure they will.

 

[Spare_change]

Actually, we have machines that can grind meat, shape burger patties, and cook burgers - do you seriously believe burger assembly is an engineering challenge we can't solve?

How many restaurants serve nothing but hamburgers?

Why do we still have cooks?

Fast found restaurants don't just serve hamburgers. A McDonald kitchen prepares fried and broiled chicken sandwiches, fish sandwiches, chicken nuggets, snack wraps, a multitude of special burgers, a variety of egg muffin sandwiches, pancakes, eggs, sausages, biscuits, and constantly changing specials.

Unless your restaurant served just burgers, a burger machine with have a minimal impact on employment because the kitchen staff is still needed to prepare other food.

There is also another problem with automation. It's not flexible. The machine can only perform the tasks that it has been built to perform. So management's menu is limited by the machine; not a good idea since fast food restaurants have built their menu by trying out new menu offerings.
.

When people cost more than machines, and machines can do a better job than people, machines will do the job. It used to be that a man could make a career bolting or welding car parts together on an assembly line. Not any more. It used to be that a woman could make a career out of making clothes by hand. Not any more. It used to be that a computer programmer could make a career out of writing file I/O and screen painting routines. Not any more.

I agree that when wage cost are more than machines and those machines can do a better job, those machines will replace the workers. However, there is more to it than that. What if wage costs are much lower than the cost of machines that can do the job better and produce a better product. Will the business pay more for the machines that delivery better products? Maybe or maybe not. In China and third world countries, cheap labor is producing tons of junk that last only long enough to sell because it's more profitable than using expensive machines.

If the cost of labor is exceedingly high, say $25/hr. The business must buy the burger machine to stay in business and the public will have to put up with the crappy burgers because they just can't or won't pay $20 for a good burger.

My point is neither a very high or very low minimum wage is desirable.

Actually, the machine can make burgers as good, if not better, than a human can. It can start with fresh ground custom blends of meat, shape them perfectly every time, and cook them precisely every time.

Can it also collect trays, take out the trash, mop the floor, clean restrooms, police the parking lot, etc etc? That machine would work great for a walk up type restaurant with no dining in option, otherwise you still need employees.

You're right --- instead of 10 employees, the store would only need 3. That is how it works.

 

[Spare_change]

Actually, we have machines that can grind meat, shape burger patties, and cook burgers - do you seriously believe burger assembly is an engineering challenge we can't solve?

How many restaurants serve nothing but hamburgers?

Why do we still have cooks?

Fast found restaurants don't just serve hamburgers. A McDonald kitchen prepares fried and broiled chicken sandwiches, fish sandwiches, chicken nuggets, snack wraps, a multitude of special burgers, a variety of egg muffin sandwiches, pancakes, eggs, sausages, biscuits, and constantly changing specials.

Unless your restaurant served just burgers, a burger machine with have a minimal impact on employment because the kitchen staff is still needed to prepare other food.

There is also another problem with automation. It's not flexible. The machine can only perform the tasks that it has been built to perform. So management's menu is limited by the machine; not a good idea since fast food restaurants have built their menu by trying out new menu offerings.
.

When people cost more than machines, and machines can do a better job than people, machines will do the job. It used to be that a man could make a career bolting or welding car parts together on an assembly line. Not any more. It used to be that a woman could make a career out of making clothes by hand. Not any more. It used to be that a computer programmer could make a career out of writing file I/O and screen painting routines. Not any more.

I agree that when wage cost are more than machines and those machines can do a better job, those machines will replace the workers. However, there is more to it than that. What if wage costs are much lower than the cost of machines that can do the job better and produce a better product. Will the business pay more for the machines that delivery better products? Maybe or maybe not. In China and third world countries, cheap labor is producing tons of junk that last only long enough to sell because it's more profitable than using expensive machines.

If the cost of labor is exceedingly high, say $25/hr. The business must buy the burger machine to stay in business and the public will have to put up with the crappy burgers because they just can't or won't pay $20 for a good burger.

My point is neither a very high or very low minimum wage is desirable.

Actually, the machine can make burgers as good, if not better, than a human can. It can start with fresh ground custom blends of meat, shape them perfectly every time, and cook them precisely every time.

All that and nobody is using it.

Dollars and cents, my friend, dollars and cents.