Written by: Grant Basile
Imagine a world where all forms of human communication was replaced with automated messages. That pesky “press one if you want…, press two for... “ is the everyday form of communication. For most, the idea that simple interactions are replaced with computers is very unsettling. But, yet this is exactly what former McDonald’s CEO Ed Rensi is saying, “it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee whose inefficient making $15 an hour bagging french fries,(The Guardian).” Mr. Rensi is speaking of the risks to raising minimum wage, although it seems like it would be helping, it could in fact lead to a snowball effect leading to higher rates of unemployment, inflation, and lastly a massive change in today’s workforce.
Although the unemployment rate has fell by as much as 4 percent over the last 7 years, this is likely to change if the talk of robots stealing jobs in the fast food industry continues to occur. Although this is simply just talk right now, in some countries such as India, this has become a reality.
Another problem that Mr. Rensi presented was the effects this would have on the value of a dollar. If businesses are required to pay their workers a minimum of $15 dollars, then more skilled workers wage rates would adjust to scale. This would could reverse all positive trends the economy has.
Lastly, a problem not discussed in the article, is structural unemployment. If minimum wage is raised, and wage rates are adjusted accordingly, many companies will be forced to release some employees, causing many highly skilled people to be unemployed. The jobs available will not utilize the skills they have.
Works Cited
Kasperkevic, Jana. “Ex-McDonald's CEO Suggests Replacing Employees with Robots amid Protests.” The Guardian, Guardian News and Media, 25 May 2016,
“McDonalds Responds To Minimum Wage Hikes, Launches McCafe Coffee Kiosk” Zero Hedge, Tyler Durden, 06 April 2016
"United States Unemployment Rate, 1948-2017, " United States Unemployment Rate, 14Feb. 2017.
With the way technology has advanced the last couple of years, I definitely could see a world where robots begin to take over a good amount of jobs. As robots become more common and as the minimum wage gets higher, it becomes more and more beneficial for a company to higher robots. At the end of the day, a business is looking to maximize profits and if that means using robots, they will. I think that this may become a problem in the near future for people working in the fast food industry, but also other industries like manufacturing.
ReplyDeleteI could see with how the world has advanced the technology usage where robots begin to take over company jobs giving fewer and fewer job opportunities to citizens looking for jobs. I think the most likely this would be to happen would be in a manufacturing business, this being because manufactures need so many employees that having robots would reduce the amount of employees needed to be payed while still getting the job done. Also while working many are trying to get the minimum wage higher. But if that is going to go up everything else will too. SO even though people might be making more, they'll also be spending more for necessities as well.
ReplyDeleteIs it really a bad thing that machines will eliminate low-wage, low skill jobs? The move towards automation will increase productivity and lower costs. We should strive towards automation in all firms to become the most productive society we can be. While unemployment may increase as a result of automation, there are ways we can deal with this. For example, we could say as a society that everyone deserves a supplementary income payed for with a tax on robots. Or we could also establish join ownership over the means of production so that nobody is left behind. Whatever, the solution is full steam ahead with automation!
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