Burger Flipping Robots v, Minimum Wage

The Technology

The Burger

"Mmm-mmmm. That is a tasty burger." Jules Winnfield

Fast food doesn’t have to have a negative connotation anymore. With our technology, a restaurant can offer gourmet quality burgers at fast food prices.

Our alpha machine frees up all of the hamburger line cooks in a restaurant.

It does everything employees can do except better:

·    It slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.

·    Our next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.

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      Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.

·     It’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.

The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better. 

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San Francisco: $10 Minimum Wage

Come New Year's Day, he'll have a few more coins in his pocket as San Francisco makes history by becoming the first city in the nation to scale a $10 minimum wage. The city's hourly wage for its lowest-paid workers will hit $10.24, more than $2 above the California minimum wage and nearly $3 more than the working wage set by the federal government.

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Minimum Wage Increases

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James Buchanan on the Minimum Wage

"The inverse relationship between quantity demanded and price is the core proposition in economic science, which embodies the presupposition that human choice behavior is sufficiently rational to allow predictions to be made. Just as no physicist would claim that "water runs uphill," no self-respecting economist would claim that increases in the minimum wage increase employment. Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests. Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores."

~James M. Buchanan, 1986 Nobel laureate in economics, writing in the Wall Street Journal on April 25, 1996

Minimum Wage to Decline

Colorado will become the first state to reduce its minimum wage because of a falling cost of living.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That's lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.

But because Colorado's provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

"We can't see that there would be any other option" except lowering the wage, department spokesman Bill Thoennes said Tuesday. He said there will still be a public hearing on the question in early November, though the drop appears inevitable. The lower wage will take effect Jan. 1.

Advocacy groups for the poor have been warning of the wage drop since August, when the consumer price index for the Denver area was released. The index fell 0.6 percent between the middle of 2008 and the middle of 2009, mostly as a result of falling fuel prices.

Other states with adjustable minimum wages have seen their consumer price indexes fall, such as Ohio. But Colorado is one of the few states where the law is interpreted to mean the wage can fall. Other states are planning to keep wages flat.

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Unemployment by Education Level

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Minimum Wage

In a free market, demand is always a function of price: the higher the price, the lower the demand. What may surprise most politicians is that these rules apply equally to both prices and wages. When employers evaluate their labor and capital needs, cost is a primary factor. When the cost of hiring low-skilled workers moves higher, jobs are lost. Despite this, minimum wage hikes, like the one set to take effect later this month, are always seen as an act of governmental benevolence. Nothing could be further from the truth...

The only way to increase wages is to increase worker productivity. If wages could be raised simply by government mandate, we could set the minimum wage at $100 per hour and solve all problems. It should be clear that, at that level, most of the population would lose their jobs, and the remaining labor would be so expensive that prices for goods and services would skyrocket. That’s the exact burden the minimum wage places on our poor and low-skilled workers, and ultimately every American consumer.

Since our leaders cannot even grasp this simple economic concept, how can we expect them to deal with the more complicated problems that currently confront us?

read the essay

New Minimum Wage: $6.55

The national minimum wage went up 70 cents on Thursday as the second of three planned increases mandated by Congress took effect.

The national minimum wage will increase to $6.55 per hour as part of the Fair Minimum Wage Act of 2007.

Before last year's legislation, the national minimum wage had been left unchanged at $5.15 an hour since 1997.

The act calls for a third and final increase, scheduled to take place on July 24, 2009, that will raise the minimum wage to $7.25 per hour...

With labor costs accounting for 70%-80% of business costs, raising the minimum wage will force producers to pass on the added expense to consumers, Dunkelberg said.

What's more, lifting the minimum wage deters employers from hiring young and unskilled workers, since they become more expensive, according to the NFIB.

"So, the increased minimum wage makes it more difficult to hire those who are most adversely affected by the economic slowdown," Dunkelberg said.

read the CNN story

Minimum Wage and Unemployment

Since we have evidence that consumers respond to higher gas prices by driving less, wouldn't it also be the case that employers of unskilled workers would respond to 12% increases in wages for unskilled workers by hiring fewer unskilled workers?

In nominal dollars, there will be a 41% increase in the minimum wage, from $5.15 per hour in 2007, to $7.25 per hour in 2009. In real, inflation-adjusted dolars, it will be a 25.5% increase, and will be the largest 2-year increase in the real minimum wage in at least 50 years. And this HAS to have an adverse effect on employment of teenage workers.

According to BLS data on unemployment rates by age, it looks like almost all of the .50% increase in May unemployment to 5.5% from 5% in April was due to increases in the jobless rates for young workers in the 16-24 year age group, especially the 16-19 year group.

from Carpe Diem

My Comments: Congress cannot overturn the laws of supply and demand. They cannot wages or prices without the market responding to these external shocks. Sadly, as more and more people become permanently unemployable due to the ever increasing minimum wage, Congress will not recognize the harm it has caused and will call for even more rules, regulations, and laws.

Teen Summer (Un)employment

Researchers at Northeastern University described summer 2007 as “the worst in post-World War II history” for teen summer employment, and those same researchers say that 2008 is poised to be “even worse.”

According to their data, only about one-third of Americans 16 to 19 years old will have a job this summer, and vulnerable low-income and minority teens are going to fare even worse.

The percentage of teens classified as “unemployed” — those who are actively seeking a job but can’t get one — is more than three times higher than the national unemployment rate, according to the most recent Department of Labor statistics.

One of the prime reasons for this drastic employment drought is the mandated wage hikes that policymakers have forced down the throats of local businesses. Economic research has shown time and again that increasing the minimum wage destroys jobs for low-skilled workers while doing little to address poverty.

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Minimum Wage Earners: 1.2% of Workers

Great chart from Carpe Diem

Minimum Wage Too High in Northern Ireland?

Prime Minister Gordon Brown is considering plans which could see the minimum wage reduced in Northern Ireland...

read the story

Could the minimum wage actually cause an increase in unemployment?

How Many Earn Minimum Wage?

another great chart from the Skeptical Optimist

People tend to forget minimum wage jobs are a starting point, not a career goal.

New Minimum Wage: $5.85

So will unemployment among the low to no skill jobs increase or decrease?


But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees’ hours or let some workers go.

“When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries,” said Jill Jenkins, chief economist for the Employment Policies Institute. “All of these things are because of mandated wage hikes. When you have to pay more, employers begin to find other options to keep costs down.”

According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.

At $7.25 an hour, the most likely response from restaurants will be “increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs,” said Brendan Flanagan, the association’s vice president of federal relations.

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