Thursday, August 27, 2015

The Damage Caused by Minimum Wage: Will It Cause WalMart to Adopt Robots?

WSJ notes:
The campaign for higher minimum wages continues to inflict damage on business employees and owners. About the only ones not feeling the pain are the labor unions that back this movement. Meanwhile, in a growing number of U.S. jurisdictions, unions are succeeding in exempting themselves from the laws they seek to impose on everyone else...

But—minimum-wage activists, take note—increased compensation costs cannot simply be passed along to consumers at the whim of the company. In conference calls with securities analysts and reporters, company officials made clear that wage hikes are among the factors exerting a negative impact on Wal-Mart’s profits.

Asked if the company would look to automation to offset the effect of higher wages, CFO Charles Holley reiterated that the company views the wage hikes as valuable investments and “exactly the right thing to do” but also noted that Wal-Mart “will always look for more efficiencies in our stores and in our supply chain and in our costs.” Sounds like Wal-Mart workers should be as concerned as McDonald’s and Wendy’s employees about being minimum-waged out of a job.

But don’t expect pity from the leaders of organized labor, who are busy making sure they don’t have to play by the rules they’re demanding for everyone else. Cities including Chicago, Milwaukee, San Francisco and San Jose have exempted union contracts from laws mandating higher minimum wages.


  1. EPJ has been early to suggest that robots, technology, artificial intelligence may begin to replace humans. I believe this is and will occur on an accelerated basis. Having just completed a biography on, as well as Principles of Scientific Management by the late Frederick Winslow Taylor, in effect he was seeking to make robots out of humans, something so far that has not been found to be possible. What will be interesting is how the politics will play out in terms of fees-taxes on robots, unions (and politicians) losing many issues like minimum wage, hours of work, healh care, etc. But they are creative, they will 'come up with something,' even for Robots!