As the Minimum Wage Increases, Robots Might Start Replacing Workers

Date: August 03, 2016

Mandated pay bumps are forcing business owners to turn to some unconventional employees.

Goodbye, cashier. Hello … machine? 

As more cities around the country adopt higher minimum wages, businesses are finding ways to reduce the cost of doing business. Among those strategies: replacing employees with automated systems. 

About 70 percent of firms surveyed in the Duke University/CFO Global Business Outlook said higher minimum wages would incentivize them to pursue automation, Computerworld reported

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Another study from University of California, Berkeley researchers estimated that New York would lose 40,000 jobs to automation as a result of the state’s $15 minimum wage, the Orange County Register reported

In the restaurant business, 38 percent of owners are considering labor-saving technology to reduce labor costs, according to QSR magazine. The shift from man—or woman—to machine already can be seen in certain U.S. cities.

In San Francisco, where the minimum wage is gradually rising to $15 an hour by 2018, entrepreneur Benoit Herve, CEO and Founder of Le Bread Xpress, serves up French baguettes with the help of only a vending machine. Herve loads the machine with partially baked dough, and once a customer purchases a loaf, the machine finishes baking the bread and dispenses it to the consumer for $4.25. 

“When the government hikes the minimum wage, corporations change the way they make things, replacing workers who are now more expensive with machines, which usually become more efficient and less costly over time,” Forbes reported

Getting replaced by a machine is just one of several unforeseen setbacks for employees due to an increased minimum wage. Employers grappling with a higher minimum wage, in addition to a new federal overtime rule going into effect Dec. 1, have been getting creative to stay in the black. 

“If employers cannot stay in business while paying their staff more, they will either hire fewer people or give their workers fewer hours,” the Washington Post reported last month.

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