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Money for Robots and Representatives!

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Yesterday I addressed Senator Bernie Sanders’ minimum wage problem. Today it is member of Congress and “The Squad” Rashida Tlaib’s turn. She is unsatisfied with the just-passed national $15/hour minimum wage. 

She wants to make it $20.

Now a bidding war begins?

But not where laborers bid for jobs. Instead, a war in which restaurateurs bid for robots.

The point being that when you force up the costs of employing one factor in a production process, those who are trying to make a living as producers do not just fold and give their wealth away to rent/purchase the newly exorbitant factor. They economize.

They make substitutions.

If I am not mistaken, basic economics has a term for the core concept . . . marginal something of something substitution

Why folks enamored of government regulation and prohibition (for the minimum wage law prohibits hiring help below a certain rate of pay) seem to think this elementary aspect of human behavior can safely be ignored is hard to figure.

At Reason, Billy Binion explains just how devastating Tlaib’s “one size fits all approach” would be for restaurants, “particularly those of the mom and pop variety.” What Tlaib demands, for these wage contracts, “amounts to an increase of almost 940 percent.”

Binion cites one study predicting “that a median-rated restaurant on Yelp (3.5 stars) was 14 percent more likely to close with each additional dollar added to the tipped wage.”

If restaurants go out of business, new businesses would emerge, admittedly. Say, a return of the Automat!

While young folks look up that term, we oldsters wonder if these automation-minded entrepreneurs will fund Tlaib’s re-election campaign.

This is Common Sense. I’m Paul Jacob. 


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Rashida Tlaib, minimum wage, The Squad, economics,

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2 replies on “Money for Robots and Representatives!”

“Whenever a Government assumes the power of discriminating between the different classes of the community, it becomes, in effect, the arbiter of their prosperity, and exercises a power not contemplated by any intelligent people in delegating their sovereignty to their rulers. It then becomes the great regulator of the profits of every species of industry, and reduces men from a dependence on their own exertions, to a dependence on the caprices of their Government. Governments possess no delegated right to tamper with individual industry a single hair’s-breadth beyond what is essential to protect the rights of person and property.” – William Leggett, Nov 1834

They’ve already succeeded in creating their destroyer. Spyce (https://www.spyce.com/) has been operating successfully in Boston for over a year now. Of course, once all those entry-level jobs are guaranteed to pay a “living wage” of at least $50 an hour, the people who find themselves unemployed will be trotted out as an example of the failure of the capitalist system, demonstrating the need for more caring socialist policies.

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