I recently had a layover at the Minneapolis-Saint Paul airport on my way to visit my parents in Oregon, so I stopped at McDonald’s for a quick bite. Rather than being greeted by a human cashier, I was met with a hall of self-serve kiosks, where I placed my order and paid for it.
Expect to see a lot more machines and far fewer human workers in states and cities that are artificially driving up the cost of employees through higher minimum wages.
“The government seems stuck on this way of fixing something that doesn’t need to be fixed,” Brian Wesbury, chief economist at First Trust Advisors, told me. “It messes up the marketplace, and businesses attempt to find a way around it because these are not market-based wages – and today with robotics and computers they can. So it ends up hurting people.”
While efficient, automation like those ordering screens at the Minneapolis airport is emblematic of what happens when the government distorts the marketplace with a heavy-handed regulatory approach.
Minneapolis has mandated a $15.57 hourly minimum wage – more than twice the federal minimum wage of $7.25 – for large employers, but that wage will apply to all businesses starting this summer. While the airport isn’t technically part of any city, its employers are no doubt forced to offer comparable wages to attract workers.
High wages are having other effects, too. Minneapolis residents will soon be out of luck if they want to call an Uber or a Lyft. Both companies are leaving town in May after the ultra-liberal city council (several of the 13 are declared socialists) applied the minimum wage to drivers, overriding the mayor’s veto. The companies said the mandate makes operations in the city unsustainable.
So in the effort to increase pay for drivers, the city council effectively will strip thousands of jobs and leave many people without transportation.
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