Minimum Wage Laws and Technological Innovations

By: Frank Yunker

Date: 2017-09-21

Minimum wage laws are having direct impact on fast food restaurants. Now we have kiosks to order our food. Or maybe there's an App to place your order. Technology pushes out jobs and minimum wage laws push technology in. Let's look at both.

Minimum wage laws hurt the very people politicians pretend to care about. The low skilled workers will not get jobs and without jobs they cannot develop skills. There is clear evidence that the minimum wage laws placed in effect in the 1940s were by their nature and intent racist. That's right. Back then, blacks often made less than whites, but their unemployment rates were lower, too. If someone worked for less, why not hire them? The Davis-Bacon Act of 1931 had its origins in 1927 when an employer in Congressman Bacon's district brought in lower paid African-Americans from Alabama to build the hospital. Competition keeps wages lower. If you can't win within the market, get the government to collude. Do the research. African-American unemployment was not a problem until laws like the Davis-Bacon and minimum wages laws were passed.

Now, about the machinery taking over for jobs. The fact is, the computer is an amazing time-saving machine. When I was in college, they predicted all sorts of jobs would be eliminated. Jobs for accountants, for one. Sure, the local "bookkeeper" job no longer exists, but accountants with 4 year degrees are in high demand. Why?

Machinery eliminates jobs, but creates many more. Tailors no longer have jobs, but the clothing industry has boomed. More production. More retail stores. More jobs overall. Machinery does not destroy jobs... it increases productivity. Back then, you bought a suit from a tailor. Quality was high and so was the price. Now, there are jobs in China making clothing, jobs on ships bringing those clothes to America and Rue 21 and Aeropostale employ many young people to sell you the clothes you need. Quality may be low, but by comparison, price is even lower.

Would technology replace jobs if we didn't have the minimum wage laws? Of course. The pace, however, would be slower which would allow entry level workers moe time to adjust to the changing economy.