Robots against socialism: raising the minimum wage makes people too expensive. Who would have thought!

in econmag •  7 years ago 

Over the years, unions around the world are fighting to raise the minimum wage and strengthen the legal protection of workers. However, today such measures can lead only to the fact that robots will even more quickly take away people's jobs.

Specialists from the US National Bureau of Economic Research studied the experience of 14 countries in which the minimum wage has recently risen, the amount of severance payments has increased or other laws have been passed in favor of workers. As it turned out, in all countries, as a result of such actions, robots only strengthened their positions in the labor market, Wired says.

Employers found it more profitable to reduce people and buy robots than to adapt to new laws. Machines do not complain about trade unions and do not demand a salary increase, and for their "dismissal" you do not need to send notices in advance and pay compensation: just just click the toggle switch and pull the plug out of the socket.

As the study showed, raising the minimum wage by only $ 1 per week leads to a reduction in the number of jobs at the enterprise by 2%. Of all the industries, the most rapid offensive of robots occurs in the industry, where 12 million Americans are currently employed, and in the zone of greatest risk are workers aged 40 years and over.

This fact causes experts special fears, after all such people are the most difficult to find a new job in case of dismissal. It turns out that actions seemingly aimed at protecting workers, in the end, only harm them, and this "paradox" (long known to literate economists, but denied by left-wing politicians) requires a separate interpretation.

In the coming years, this problem can become especially relevant for Americans. In May of this year, a bill was introduced in Congress providing for raising the federal minimum wage by more than 2 times - from $ 7.25 to $ 15 per hour by 2024. If the experts' fears are correct, the adoption of such a law will lead to a sharp jump in unemployment, and the US authorities should now be ready to smooth out its consequences.

The question of the impact of robotization on the labor market has been rising more and more recently. However, not all economists agree that mass use of robots can lead to serious social problems. According to them, people will always be able to adapt to progress and find another job, as has happened in history more than once. In addition, these experts argue that truly advanced robots will appear on the market not earlier than in ten years, and humanity has enough time to prepare.

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