The economic impact of the minimum wage is one of the most studied public-policy topics I’ve run across. But sometimes these analyses have an air of unreality about them. At an AEI event earlier this year, Heidi Shierholz — then an EPI think tanker, now the US Labor Department’s chief economist – argued in favor of President Obama’s plan to raise the minimum wage. Shierholz also said she was “not so worried” about the possibility that dramatically raising the minimum wage might worsen the competitive position of low-skill humans versus machines. “It’s an unknown,” she added, what will happen in the future.
Well, perhaps the future is here. Here is an interesting tidbit from McDonald’s earning conference call yesterday (via The Wall Street Journal):
By the third quarter of next year, McDonald’s also plans to fully roll out new technology in some markets to make it easier for customers to order and pay digitally and to give people the ability to customize their orders, part of what the company terms the “McDonald’s Experience of the Future” initiative.
As a WSJ editorial put it, ” … consumers better get used to the idea of ordering their Big Macs on a touchscreen.” Now McDonald’s has been frequently attacked by minimum wage proponents. Although CEO Don Thompson has suggested the company would support Obama’s call for a $10.10 wage, that’s not good enough for advocates who want the minimum set at $15 an hour.
But there is a better way to help low-skill workers, at least over the near term: expand the Earned Income Tax Credit or tack on some other sort of new wage subsidy. As AEI economist Michael Strain has put it:
Liberals, in supporting minimum-wage increases, implicitly argue that the employers of low-skill workers, together with consumers of the products and services the workers help provide, should bear the burden of ensuring that low-skill workers don’t live in poverty. Conservatives should reject this argument, insisting that all of society is responsible for helping the working poor — to escape poverty, to earn their own success, to flourish.
Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.
” … consumers better get used to the idea of ordering their Big Macs on a touchscreen.”
Is this likely to put a strain on consumers? Were we used to having the guy behind the McDonald’s counter tuck in our napkins and explain the daily specials?
Now the jobs will go to people who know how to design, manufacture, or maintain the McDonald’s touchscreens. I guess the teenagers who used to man the counters can mow the lawns and babysit the kids of the touchscreen workers, or live on welfare. Benevolent law!
How is it appropriate for corporations to force society subsidize their labor costs? Especially a company that is damaging the health of the public and the environment as much as McDonald’s.
I’ll never understand the argument that paying a market wage is forcing society to subsidize one’s labor costs.