Job-Killing Minimum Wages

Above, this is what the L.A. minimum wage hike brought. Photo by Armand Vaquer.

A year ago, Forbes.com wrote:

It brings me no joy to write these words. The push for a $15 starter wage has negatively impacted the career prospects of employees who were just getting started in the workforce while extinguishing the businesses that employed them. I wish it were not so. But it’s important to document these consequences, lest policymakers elsewhere decide that the $15 movement is worth embracing. 

Let’s start with automation. In 2013, when the Fight for $15 was still in its growth stage, I and others warned that union demands for a much higher minimum wage would force businesses with small profit margins to replace full-service employees with costly investments in self-service alternatives. At the time, labor groups accused business owners of crying wolf. It turns out the wolf was real. 

Earlier this month, McDonald’s announced the nationwide roll-out of touchscreen self-service kiosks. In a video the company released to showcase the new customer experience, it’s striking to see employees who once would have managed a cash register now reduced to monitoring a customer’s choices at an iPad-style kiosk.

Los Angeles raised its minimum wage last July 1.

According to Fortune.com:

Los Angeles, Washington D.C., Maryland, and Oregon will raise their respective minimum wages on July 1 as part of ballot measures previously approved by voters. 

The wages in LA will rise from $10.50 to $12, with exceptions for companies employing 25 workers or fewer. 

This hourly rate still falls below the cost of living in the county for a single adult, according to MIT’s living wage calculator. If the cost of living remains the same in the LA metro area, the minimum wage will catch up by 2020 under the current legislation.

Tonight, I saw a fruit of the hike in the minimum wage in L.A. It was self-service kiosks for placing orders at McDonald's. There were only enough employees to take payments and prepare the food.

While having a "livable wage" sounds lovely, but it is killing jobs, causing small businesses to close and forcing companies like McDonald's to resort to automation.

The voters in voting for the minimum wage hike in L.A. shot themselves in the foot.