Hello I’m kind of Andrew Heaton
and you’re watching Mostly Weekly.
(Mostly.)
And today I’d like to talk to you about minimum wage.
Every year I explain why I think minimum wage is a bad idea,
that way I can use hate mail to heat my house.
Now the minimum wage is back in the news thanks to places like Seattle,
where the city has increased their minimum wage from $11 an hour to $13.
And in New York, where a law was just passed raising the minimum wage to $15 an hour.
Listen, I’m on team helping poor people! #PovertySucks
But we shouldn’t make policies based on what their intention is,
we should judge them on what their effect is.
The effect of jacking up the federal minimum wage
is that employees cost an employer more money.
So they’re apt to cut back on hours, reduce jobs,
or replace employees with robots.
And increasing the minimum wage does lead to more automation,
at least according to evil right-wing think tank MIT.
To give you an example, this is what happened when I asked for a raise:
I’d like a raise.
We’re replacing you with a robot.
Alright here he is.
Mandroid Heaton.
Greetings evil human.
Hello Mandroid.
Can you tell us a little bit about the effects of minimum wage on labor markets?
It’s great.
Are you just saying that because you think a higher minimum wage will lead to more robots?
No, of course not.
I’m saying that people can’t live off less than $15 an hour
and it’s inhumane to vote otherwise.
Hold on, I’m not saying poverty isn’t bad,
I’m saying that if raising the minimum wage means you don't get a job at all,
then the real minimum wage is zero.
You’re heartless.
And I think you humans you should jack it up to $30.
Hell, why not $60!
Okay, if we raised the minimum wage it would help some people
but would also lay off a lot of other people.
According to the Congressional Budget Office,
raising the minimum wage to just $10.10 an hour
would lift about a million people above the poverty threshold, great.
But it would also mean laying off half a million workers.
In other words, increasing the minimum wage helps people who have low skills,
but it screws over people with the lowest amount of skills.
Okay, you need to think big picture.
Step1: Raise the minimum wage.
Step 2: Build Skynet.
Is there a Step 3?
You’ll find out.
Okay.
Picture a ladder.
Raising the minimum wage is like kicking the bottom rung off that ladder,
and then bragging about making the bottom rung higher.
That’s true—but people that are below that new step don’t get jobs at all.
Plus minimum wage jobs aren’t permanent castes poor people are stuck in.
They’re mostly entry-level jobs.
Two thirds of minimum wage workers move on to a higher salary within a year.
About half of minimum wage workers are sixteen to twenty-five years old.
The more we raise the minimum wage, the more of them we lock out of the job market.
Which is really bad news for a high school dropout
or a felon looking to get their foot in the door.
And maybe some big companies can afford a higher minimum wage.
But mom and pop shops can’t.
For example, Starbucks can afford to pay their employees more:
they’re a giant company and they could just charge more to spell your name correctly.
Local coffee shops don’t have that option--
they have razor thin profit margins.
Labor is a significant portion of their overhead.
So if you raise the minimum wage,
there’s a real chance you’ll drive independent businesses out of business—
which helps out big companies,
many of which want a higher minimum wage for exactly this reason.
In Seattle businesses have increased the hourly wage of their workers,
but they've also cut the amount of hours they work.
So workers on net are making less money.
And again, I can’t stress this enough, the higher we raise the minimum wage,
the more robots we have to worry about.
It’s a bad idea to have one one-size-fits-all price for the entire country.
You can pay two dollars for a beer in Scabies County, Virginia.
Whereas in New York City if you want to buy a Pale Ale
you need to kidnap and ransom a toddler.
Stuff costs more in big cities.
So a grocery store in Gout City, Montana
just can’t afford to pay $15 an hour to all of its cashiers.
Listen, we all have human feelings.
And we all consume carbon.
But--Sarah?
The teleprompter is all robot-y.
You been replaced by a robot?
No.
Okay.
Well anyway, Remember: spay and neuter your Roomba.
I’m Andrew Heaton and I’m definitely a human being and not a robot.