Dystopia in Seattle and the Perverse Productivity Effect

Developments related to Seattle’s recent decision to raise the minimum wage to $15 per hour epitomize the ineptitude of our political discourse from both the right and the left, and reveal a dangerous disconnect from reality.

A few days ago, a Twitter attack on the left erupted, as conservatives celebrated the replacement of human cashiers at Seattle McDonalds with kiosks, which was presumed to be a reaction to the minimum wage hike. The message? “Hey you stupid liberals, see what you accomplished with your $15 per hour minimum wage? Now those McDonalds workers have no jobs at all. Ha ha.”

Step back and consider what’s going on here.

Those on the right are sort of “upside down Luddites.” I say this because they implicitly have a negative view of breakthroughs in productivity. They project that McDonald’s workers should be made to suffer with the introduction of kiosks to replace cashiers. In their worldview, the cashiers should be paid poorly enough to forestall the use of kiosks.

But that’s craziness. Each year, as the cost of computing power continues its inexorable decline (Moore’s law), the wages of those cashiers would have to decline in order to maintain their competitiveness with kiosks.

Thus, productivity, in the minds of those on the right, should drive down wages, which already are less than livable wages for those at the bottom of the income scale. Those McDonalds workers who demanded a livable wage were morons, the logic goes, because they allowed technology to render their services obsolete. Continuing to work at substandard wages would have been the wiser choice.

In other words, productivity advances should make life worse for the masses, huge numbers of whom stand to lose their jobs to technological breakthroughs.

And those on the left? They may have an equally unrealistic worldview. The principle that guides their fight for a $15 per hour minimum wage — that we should not have working poor in America — is unassailable. But the underlying vision — that we can continue to generate jobs at the pace we have in previous decades — is delusional. In the past 17 years, the total number of hours worked by Americans has not budged, while our productivity has increased by 35% and our population has grown by 40 million.

We’ve reached an inflection point where productivity advances are eliminating jobs at a faster pace than they are creating them. The Luddites were not completely off base in their thinking. They were just a couple of centuries premature.

Progressives are not wrong to be standing up for those workers at the bottom of the income scale. But they need to reconsider the measures they advocate and start thinking out of the box. Show me a higher minimum wage, and I’ll show you a machine that makes hamburgers. In fact, I’ll show you that hamburger machine even if the minimum wage doesn’t budge. Think we can educate ourselves out of this? Think again. We can’t all be doctors, and even some of the work doctors currently do will become mechanized.

Progressives need to be far bolder in their thinking. They need to look past the pabulum promoted by the politicians they support, including Bernie Sanders and Elizabeth Warren, and search for new policies; policies that will cause us to welcome productivity advances as developments destined to make our lives better, rather than fear them as threats to our livelihood.

2 responses to “Dystopia in Seattle and the Perverse Productivity Effect

  1. One possibility is to give tax credits to businesses in exchange for each half-time or more employee they have on the payroll, and eliminate the tax advantages that businesses get for investing in equipment that eliminates workers.

    • Sorry, TS. Using tax benefits to delay the arrival of technological advance? I’m not on board. I’m opposed to accelerated tax benefits for investment in equipment, but a business should be allowed to expense equipment over the course of its useful life.

      Don’t we need to expand the social safety net, and stop making value judgments on who should qualify?

      And does the 40 hour week really need to be fixed in stone?