Saturday, May 28, 2016

Nothing for Money

From Mobile Commerce Daily. Click to read article.
Conservatives are crowing victory at Wendy's latest response to the increase in minimum wages. Instead of employing cashiers, they're laying them off in favor of automated kiosks. They say this is a matter of survival in this soft economy. Other companies, whose labor cannot yet be replaced by automation or computers, continue to send jobs offshore. In some cases, I'm sure it is a matter of survival for the businesses in question. In many cases, they're having to compete with a McDonald's or a Wal-Mart. 

In other cases, the development of new technology has changed how products are delivered, and the market has changed accordingly. E-books have driven many bookstores into bankruptcy, for example, but no author or publisher can cut Amazon out of the equation without losing money. It has a near-monopoly on book sales.
Then, there's the matter of employee benefits. Many companies hire temp workers or only employ workers part-time to avoid the cost of employee benefits. I've even heard people argue that it provides an opportunity to 'monetize free time' and allows workers to travel to where the jobs are with an On The Road sort of virtue. That's fine for young, healthy, childless people or couples. It doesn't really work for older people or for people with kids. 

Children have weaker immune systems and used to die before medical care became accessible to everyone. When you get past forty, perhaps fifty if you're in good shape, the warranties start to expire on your body parts and things will start going to hell. Plus, when you get past fifty, your parents will be in their seventies and they're going to need your help. That nomadic lifestyle will end with children or with age.

There will come a point when many people in the United States can afford to buy basic products, whether it be $15 or $3, because there are not enough service jobs to go around. People like to talk about bringing manufacturing jobs back; those have already been offshored and automated out of existence. The service jobs are the new victims, and many people will not be able to find new employment. Unless a job requires the presence of a human being in person, or it requires special talents and skills, it's going somewhere else. Not everyone is a rocket scientist, though, and Wendy's doesn't need rocket scientists. 
I have a harsh message for American workers, with a follow-up for businesses who operate in the United States: the workers here are never going to be able to beat people in India who will work for a few rupees a day (never mind how I know this), or automated kiosks... unless the price of everything sold in the USA, including the products businesses require, drops to the price people pay in poorer countries. You know how ex-pats used to talk about living like kings in Mexico with a few bucks? Yeah, that's coming here or there's going to be food riots. We're going to have 'extra people' that are a 'burden on the economy', and it's not because they're lazy.

Will everything be on the dollar menu? Will the government have to increase taxes further on companies and citizens, to subsidize basic necessities for all the 'extra people' our country won't employ? Or will we have another price and wage freeze, like the one Nixon imposed?

I don't really have a great answer here; the truth is, many smaller companies are struggling to survive, and if they go belly up there will be no jobs. I get that. I do know, though, that I won't be eating at Wendy's any time soon... especially since my first job was as a Wendy's cashier.

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