LA Raises Minimum Wage to $15… Employers Respond Immediately With THIS

0 121

The Los Angeles City Council decided to raise the minimum wage last week.  In LA asking “Would you like fries with that?” will net you $15 bucks an hour.  That’s about $30,000 a year for a full time job.

Plus, of course, your health care thanks to Barack Obama and the Democrats who passed ObamaCare without a single Republican vote.

Needless to say, Democrats are projecting a boom in the economy thanks to low income people having more cash in their pockets.  Except they may be in for a big surprise.

The expected hike in the minimum wage may be holding down hiring a bit among local firms, said Ken Tiratira, chief operating officer of the Employers Group, one of BizFed’s 135 member organizations. The survey found that while 66 percent of companies expect business conditions to improve this year, only 40 percent of business owners plan to hire additional employees.

Still, 59 percent of business owners surveyed said they plan to make capital investments, much of that in new technology designed to further automate the workplace. That’s up from 46 percent who said they planned such investments at this time last year.

“That’s the biggest surprise,” said BizFed Chief Executive Tracy Rafter. “It shows a desire to invest in new technology and equipment to make businesses less reliant on human capital – to grow the business with fewer people.

So 66% of businesses see improvement this year and only 40% are thinking about hiring new employees.  And 59% are planning on investing in automation technology.

The other day, The Wall Street Journal detailed how Lowe’s will start to roll out robotic shopping assistants at a California store in November. Robots doing customer service? This is another example of how technology and automation are changing the workplace and, over time, the composition of the workforce.

Low-skill jobs such as fast food prep workers and personal care aides are booming, as they have been since the Great Recession. But a new analysis fromUSA TODAY using EMSI data and other sources indicates that 70% of low-skill positions have a high risk of being automated in 10 to 20 years, compared to 46% of mid-skill jobs and 8% of high-skill jobs.

In 1979 the UAW had 1.5 million members in the auto industry.  Today they have 400,000 members, and that number is driven by expansion into areas like higher education and casinos.  Certainly some of the drop was due to companies like Toyota, Nissan, and BMW expanding manufacturing in the US and doing it in non-union regions like the South.  But a major component of that drop is the elimination of high-skill jobs like painting, assembly, and welding.

If industry can automate painting and welding, automating order taking and fry cooking is a breeze.  It was the cost of labor and benefits that led to the robotic industry and it’s getting ready for a boom now.

And while we’re at it, those businesses are also concerned about the amount of red tape and regulation.

But as ObamaCare kicks in lowered health insurance cost will offset the increased minimum wage, right?

Another major concern is healthcare: 65 percent of business owners surveyed said they expect higher healthcare costs as employer mandates under the federal Affordable Care Act kicks in later this year. Owners said they plan either to reduce employee hours or to increase employee copays to offset higher costs.

Good job Democrats.  40 hours per week at $9 per hour is $360 per week.  29 hours per week at $15 per hour is $435 per week and no benefits.

The most likely result of this meddling by people who’ve never had to make a payroll is that the people they’re most trying to “help” will be the ones who are hit the hardest.  People who are worth about $9 per hour are going to find out that the “minimum wage” isn’t $15 per hour, it’s $0.

You might also like