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The assault on low-skill jobs via higher minimum wages, automation

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POSTED January 31, 2014 12:37 a.m.

The problem isn’t the minimum wage.

The problem is jobs.

The shift to a service economy had been the only consistent bright spot when it comes to job creation. At the same time technology is allowing the elimination of what are essentially basic entry level jobs. Combine emerging technologies with cost squeezes and you have created a big incentive for businesses to keep cutting labor costs.

Even Bill Gates gets it. The Microsoft guru warned recently that jacking up minimum wages would serve as a major impetus for employers to “buy machines and automate things.”

No one argues the need for decent wages. But there needs to be upward mobility. And if you keep creating big incentives for the elimination of what are essentially menial, entry level positions you are reducing the chances for people to even get a job let along get on the escalator to make a decent livable wage.

Ironically, the people who are to blame the most are the one lamenting that their friends, kids or grandkids can’t find a decent job or even employment.

The Wall Street Journal last year compared the cost of on-line items versus what could be bought in brick-and-mortar stores in Texas, California, and New York. The bottom line was the difference between what one saved online versus shopping in person was essentially the sales tax in each state. It takes less people to support on-line shopping than it does brick and mortar shopping.

Then there is automation taking place at brick and mortar stores.

I do not use self checkout lines.

The reason is two-fold. Stores do not give you a discount for doing work they’d have to pay someone to perform. At the same time, they are eliminating jobs while reducing their costs and in turn enhancing their bottom line.

The trend of using tablet devices in restaurants to order meals is another step toward eliminating service and jobs by making the customer do the work.

Yes, businesses have to constantly innovate to look for ways to save money and improve “service.”

But we’re equating service these days with volume. Customers unwittingly become processed like cattle or else have been steered toward a skewered version of convenience. It’s the byproduct of the Age of Instant Gratification.

Talking to a computer via voice prompts might speed things up when you’re paying a bill but it is maddening if you’re trying to troubleshoot a problem.

Apps — or some other high tech vehicle yet to be imagined that is designed to replace interaction with humans to secure a purchase or service — ultimately accelerate job loss. In most ways, it isn’t much different than the automobile replacing the horse and buggy. There is one big difference, however. Automation in the Henry Ford era improved wages, created better paying jobs on a massive scale and increased the standard of living for the working and middle classes. In turn, the money generated allowed the titans of industry such as Henry Ford to sell more products and make even more money.

Silicon Valley technology is essentially only economically lifting code writers and those who gamble investment money on what they hope will be the next big thing. Perhaps the apps and devices they create improve “the standard of living” by eliminating menial tasks or giving folks instant gratification. But it is also accelerating job loss by decimating the need for low-skilled jobs.

While the Mark Zuckerbergs of the world argue they are working to increase access to knowledge — a key to improving the standard of living — what they are not doing is generating jobs of any consequence for the amount of money they are siphoning out of the economy.

That in itself is not a sin. It is, though, a stark reminder that the economy of 2014 is not the economy of 1938 when the minimum wage law was seen as the best way to help spur a move to raise the standard of living for millions of Americans.

Keep in mind at the end of the day minimum wage jobs are low-skilled jobs.

There are only so many code writers and physicians that an economy can absorb before their livable wages start deteriorating as well.

What’s going on is a decimation of an entire category of workers, namely those with little or no skills.

Entry level jobs are critical not just for the economic lot of many but for a healthy economy as a whole. They are how most people break into the workforce. They open the door to other opportunities.

For every Steve Jobs, there are 2 million or so other Americans who have to follow a more pedestrian way to being able to support themselves and their families.

Just like every kid that buttons a chin strap on can’t expect to end up where Payton Manning is today, it is a gross distortion of reality to make the same assumption we can all enjoy success the way a handful of people have in this country whether they occupy the White House, have a limo ferry them to and from Wall Street, or come up with a social media website in their dorm room.

The last thing millions of Americans need right now is giving small businesses trying to stay afloat another incentive to reduce their work force through automation.

It shouldn’t be that way. But today’s reality is not the 1930s, the 1950s, the 1960s, or the 1990s. It is 2014 and it is a different world.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209-249-3519.

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