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Raising wages increases risk of automation taking jobs, Bill Gates warns

Published: Monday, Aug. 31 2015 10:05 a.m. MDT

Philanthropists Bill Gates speaks during an interview on Tuesday, Jan. 21, 2014, in New York. Gates pitched an optimistic future for the world's poor and sick his annual letter, arguing passionately against three myths he said hurt efforts to bring people out of poverty, save lives and improve living conditions. (Bebeto Matthews, Associated Press) Philanthropists Bill Gates speaks during an interview on Tuesday, Jan. 21, 2014, in New York. Gates pitched an optimistic future for the world's poor and sick his annual letter, arguing passionately against three myths he said hurt efforts to bring people out of poverty, save lives and improve living conditions. (Bebeto Matthews, Associated Press)

With President Obama pushing for a minimum wage bump to $10.10, the notion of hiking wages at the low end of the scale has broad appeal.

Microsoft founder Bill Gates went on MSNBC on Tuesday to throw some cold water on all the enthusiasm, warning that higher wages will increase the risk that automation will begin to squeeze our simple jobs that low-end workers depend on.

“Within certain limits, it doesn’t cause job destruction, but if you really start pushing it, then you’re just making a huge tradeoff,” Gates said on Morning Joe. “You have to say which are the households that end up benefiting: Is it much more the teenager in a wealthy household or is it that household in poverty?”

As if to emphasize the point, the UK's Daily Mail on Wednesday outlined progress in automation across a variety of industries, including some that are already routine, such as auto manufacturing, and some that are now being tested actively in the field. The latter include a gourmet hamburger machine in San Francisco and a grape picker being used in French vineyards.

"One of the first grape-picking robots, being trialled in France, Wall-Ye draws on tracking technology, artificial intelligence and mapping to move from vine to vine, recognise plant features, capture and record data, memorize each vine, synchronize six cameras and guide its arms to wield tools," the Daily Mail piece noted.

Earlier this week, the Deseret News profiled Ron Unz, the California millionaire who wants to bump wages in the Golden state to $12.00 an hour.

"Unz thinks his argument is one economic conservatives should embrace," we reported. "As things stand, he argues, artificially low wages are heavily subsidized by taxpayers, with the working poor receiving $250 billion annually in social welfare payments. The $12 wage Unz advocates, if enacted nationally, would boost low-income wages by roughly $150 billion, he says. Estimates of savings to taxpayers vary, he says, but his guess is that between $40 (billion) and $50 billion would be saved in social welfare payments."

But the notion that bumping wages will save taxpayers money hinges on routine jobs being available at the higher wages. Gates fears that pushing too hard on wages will encourage innovations that could soon result in even more workers sidelined from the workforce.

Email: eschulzke@desnews.com

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