Minimum Wage: What's the Other Argument?

[sophie]

Question: are there fewer horses overall?

Yes.

This is an old, much refuted argument. Automation creates more jobs than it destroys.

Retail sales may move to another products, but they are not going anywhere. Live salespeople are the most effective for upscale and innovative items. There is a reason outside sales is the most highly compensated career that does not involve three years of postgrad work.

Which is why Amazon doesn't currently command 65% of the book sales market and Borders is doing great financially. And why you see a Blockbusters in every strip mall.

 

[Timsup2nothin]

People aren't drafthorses, though - that argument only works because we're able to learn new skills, and falls apart if people can't or won't. Hence a good education system is one of the best investments we can make at the moment, to enable people to re-trade as technology moves on. After all, it's pretty self-evident that every robot who replaces a taxi driver is going to need at least a fraction of an engineer to look after it.

Every robot who replaces a taxi driver is going to need a full security guard to keep the car from getting stolen and parted out.

 

[Timsup2nothin]

Which is why Amazon doesn't currently command 65% of the book sales market and Borders is doing great financially. And why you see a Blockbusters in every strip mall.

There is no direct correlation between switching to home marketing retail and switching to automation. Your examples are not representative of the issue under discussion.

 

[El_Machinae]

People aren't drafthorses, though - that argument only works because we're able to learn new skills, and falls apart if people can't or won't. Hence a good education system is one of the best investments we can make at the moment, to enable people to re-trade as technology moves on. After all, it's pretty self-evident that every robot who replaces a taxi driver is going to need at least a fraction of an engineer to look after it.

Drafthorses can learn new skills. For quite awhile, automation increased the demand for drafthorses. But, their ability to learn new skills and provide new services is a function of their IQ and their ability to adapt has a ceiling. There are now a few boutique drafthorses who have VERY good lives, overall.

This is what I meant about linear trends and exponential trends. Not everyone can be an engineer (who can become very wealthy during this growth!), they don't have the intelligence (the ceiling effect). Re-training takes TIME, and the amount of retraining time is a linear function. The robotics advance with exponential trends.

Now, I'm a big fan of continuing education. I think it's a vital part of our growth rate (since it's not fast enough). But we're eventually going to need deliberate employment policies, where we create goods and services that The Market doesn't see fit to provide.

 

[Flying Pig]

We already have a fair few of those - the military, to name one.

And there's no need to spend four years or so at university learning engineering for the taxi driver to find a job - all that he needs to do is find another job that isn't being automated, and the future engineers will be those currently in school. A taxi driver can learn to be (say) a bread counter man at Waitrose fairly quickly, and be paid while he does so.

Horses make an excellent example - there are not many horses around any longer, because there are motor vehicles, so there aren't a lot of farriers, blacksmiths, horse grooms and the like. However, there are a lot of mechanics, car-wash workers, motor engineers and so on - people of all sorts of different skill levels whose jobs are created by the emerging technology, to say nothing of the people who produce the goods bought with the companies' extra profits from using machines instead of horses. I see no compelling reason why the total number of people employed needs to fall as a result of technology improving.

 

[El_Machinae]

Yes, the military is one. It's politically palatable on the Right as well. The trick is to leverage them into creating even more public goods (since the 'peace dividends' marginal benefit drops with increased spending).

The horse analogy is very strong. Just because you've found other uses for other (higher IQ) commodities, it doesn't argue my point. I mean, I'm saying "increased robotics will increase demand for robotics" and that there will be increased growth.

You've looked at my analogy regarding drafthorses and then saw how shooting the drafthorses was good for people. My point is that the demand for these entities - capable of manual labour, new skills, but with very large training and maintenance costs (compared to automation) plummeted. It's not that people didn't like drafthorses. They just couldn't earn their keep, where their labour justified their feed. The Free Market didn't invent new reasons to give drafthorses a living wage, it replaced them.

The reason why the number of people employed falls is because for any specific job, it will (at some point) be cheaper to get a robot to do it. If you create new jobs for people (since you're an entrepreneur), you'll demand lower wages if there are many unemployed people competing. And as soon as you can replace them? They're laid off.

The drafthorses suffered from their ceiling in capabilities (compared to their maintenance costs). What makes you think people don't have ceilings? We do. And we've also got fixed maintenance costs. As soon as the robot's maintenance cost is lower, the person's maintenance cost cannot compete.

A taxi driver can learn to be (say) a bread counter man at Waitrose fairly quickly, and be paid while he does so.

Well, the checkout cashier who lost his job to an automated teller also wants this job. So, they'll bid down each other's wages.

 

[Flying Pig]

I'm arguing that that's simply not true - there will always be jobs which can only (for practical reasons or simply because we won't accept anything different) be done by a person, and that creating more robots creates more of those jobs. Hence the drafthorse analogy isn't quite right, because a drafthorse is only ever a drafthorse, but people can find new careers. Not all of those jobs are particularly restrictive - there will always be demand, for example, for human security staff, human bartenders, human waiters, human tech support workers, human relationship counsellors, human fitness instructors, and so on.

Note also that humans have the edge in hiring and layoff costs, as well. It's much easier to get an extra five people in to cope with a busy week than it is to get an extra machine.

Well, the checkout cashier who lost his job to an automated teller also wants this job. So, they'll bid down each other's wages.

True, but someone's just got one of the new engineering jobs, and he still needs to buy lunch, so there are going to be more of those jobs going soon.

 

[Antilogic]

People aren't drafthorses, though - that argument only works because we're able to learn new skills, and falls apart if people can't or won't. Hence a good education system is one of the best investments we can make at the moment, to enable people to re-trade as technology moves on. After all, it's pretty self-evident that every robot who replaces a taxi driver is going to need at least a fraction of an engineer to look after it.

I'm certain the higher-ups would think otherwise.

 

[El_Machinae]

I'm arguing that that's simply not true - there will always be jobs which can only (for practical reasons or simply because we won't accept anything different) be done by a person, and that creating more robots creates more of those jobs.

Oh, sure. But then we're talking trendlines. If unemployment happens faster than creation, wages go down. And then the demand for people's "people serving" jobs then goes down too. The barista selling coffee is not selling to the unemployed driver.

I'm talking trends. The cost of training a person is linear. Robots are on an exponential trend.

Note also that humans have the edge in hiring and layoff costs, as well. It's much easier to get an extra five people in to cope with a busy week than it is to get an extra machine.

No. They each have costs. One is higher than the other. When it's cheaper to have spare machines sitting idle as spare capacity, you won't hire people during your busy weeks.

 

[Flying Pig]

That also means it's cheaper to have the floor space, and if anything that's going to get more expensive over time. At any rate, we've been making predictions like this since the Swing riots, and the machines haven't taken over yet.

 

[onejayhawk]

Which is why Amazon doesn't currently command 65% of the book sales market and Borders is doing great financially. And why you see a Blockbusters in every strip mall.

If you are trying for irony it's failing. I covered that, in case you did not read my post.

I'm certain the higher-ups would think otherwise.

Not to mention every political party on the planet.

J

 

[El_Machinae]

That also means it's cheaper to have the floor space, and if anything that's going to get more expensive over time. At any rate, we've been making predictions like this since the Swing riots, and the machines haven't taken over yet.

Exponential trends vs. linear trends. It's not a problem until it's a problem.

In the meantime, it's obvious that outsourcing hasn't lead to job losses for the low-education local workers and lowered wages in those cohorts, right?

Edit: not sure what you meant by 'floor space'. Surely the floor space of a human being is higher than that of a machine?

 

[Flying Pig]

Actually, I don't think it has, if we take those workers as a whole. It's led to job losses for manufacturing workers and created jobs for service-industry workers. Looking at graphs like this -

- and allowing for the general cycle of boom and bust, the 'employment capacity' of the economy is pretty much the same as it was in 1970.

 

[El_Machinae]

Yeah, that's actually a really good counter-point. I wonder if UK's 40% of GDP being gov't services helps? Though with the cost of education rising faster than median wage, are people spending an increasing amount on 'training' just to keep treading water?

 

[Flying Pig]

Well, that wasn't the case in 1970 at all - what we've seen, by and large, is that our manufacturing sector has dwindled to become mostly high-tech and high-value and our service sector (especially finance) has boomed. Perhaps some of it may be what you've said - four times as many people go to university today as did in the sixties - but one might equally treat some of those degrees as people spending (their parents') spare money on things they want.

 

[El_Machinae]

True. I was thinking specifically about student loans, but couldn't find the graphs easily enough. Student loans would be 'treading water'. Spending the parent's savings would be a different story, yeah.

 

[Zelig]

I don't want robots to take our jobs, so I'm against the minimum wage.

That's silly, or we should be burning the presses to create more jobs for unemployed scribes.

I don't think cost has anything to do with it - I think it's simply that customers aren't comfortable ordering food from something that isn't human. After all, in many other relatively low-skilled parts of the manufacturing industry, they've already replaced their low-skilled workers with robots - we're past the point where 'I don't want a robot to take my job' is valid, because they've already taken the ones that they can.

It's never finished. My job is to automate away existing work - as long as I'm employed, there are still jobs for me to automate.

Every robot who replaces a taxi driver is going to need a full security guard to keep the car from getting stolen and parted out.

Yo, this is actually my area. We don't have robot drivers yet, but stealing our cars is quite a hassle, the more secure ones have GPS chips and SIM cards feeding real-time positioning and OBD2 data through the cell network. You'd need an angle grinder to access/disable the diagnostics if you don't have a key, and our computers have real-time heuristics which will flag drivers and/or vehicles and send alerts to us if they differ from their usual patterns.

We're able to retrieve most of our stolen vehicles mostly intact, and spend an order of magnitude more on paperwork for stolen stuff than we do on replacing them.

 

[Timsup2nothin]

Yo, this is actually my area. We don't have robot drivers yet, but stealing our cars is quite a hassle, the more secure ones have GPS chips and SIM cards feeding real-time positioning and OBD2 data through the cell network. You'd need an angle grinder to access/disable the diagnostics if you don't have a key, and our computers have real-time heuristics which will flag drivers and/or vehicles and send alerts to us if they differ from their usual patterns.

We're able to retrieve most of our stolen vehicles mostly intact, and spend an order of magnitude more on paperwork for stolen stuff than we do on replacing them.

You may want to go back to my post about how much easier it is to convince people to participate in property crimes than crimes against person. Taking drivers out of cars produces a hundred times as many people willing to jack the car, easily. And your robot piloted car is going to be different to jack than a parked car, so the angle grinder if you don't have a key might not be as much of a necessity as you think.

 

[Flying Pig]

Balance that against risk, though - knowing you're not hurting a real person might make you more likely to steal or damage it, but knowing that there's a camera being watched by somebody with a GPS tracker and a direct line to the police might make you more hesitant.

 

[sophie]

You may want to go back to my post about how much easier it is to convince people to participate in property crimes than crimes against person. Taking drivers out of cars produces a hundred times as many people willing to jack the car, easily. And your robot piloted car is going to be different to jack than a parked car, so the angle grinder if you don't have a key might not be as much of a necessity as you think.

Is it possible to steal a car with no pedals and no steering wheel?