Comments about ‘Raising wages increases risk of automation taking jobs, Bill Gates warns’

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Published: Wednesday, Jan. 22 2014 12:05 p.m. MST

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Kaotic
USA, UT

This is just the 1% talking. They will say anything against delving into their million dollar profits. People can't make a living on $7 or $8 an hour part-time. That just plays into the hands of the 1% who couldn't be more happier about the unequal distribution of wealth in this country. Minimum wage, part-time hours and no benefits mean big profits for corporate America and too bad for the working class Americans.

Steven S Jarvis
Orem, UT

Bill Gates is a smart man. Raising the minimum wage quickly and by too much likely will hurt those who it is supposed to help the most. Not only will business have to automate and reduce workforces here, they must look to greener pastures outside of the United States for customer support. My wife's cousin is paid roughly $2 an hour at Convergys while way back in the day when I was a kid I was earning $8.50. Convergys doesn't want to lose profit so they build more support buildings where they can get college educated people to work for peanuts without giving benefits. They probably can employ six to eight more Filipinos PER American by doing this.

If the employee cost shoots up by an increase in the minimum wage, decent High School jobs like Convergys will simply be created outside the US. It will also cause inflation as prices will rise to match increased costs. Raising the minimum wage may be the deathknell of the middle class pushing many into poverty that can't keep up.

t702
Las Vegas, NV

Bill Gates advice, an accomplished businessman vs the community organizer with zero experience - who do you listen to?

Tuffy Parker
Salem, UT

@ Kaotic

Sorry, it is not quite that simple. While it is true that $7 or $8 is not a living wage keep in mind the neither is $10.

It's all a little bit of a shell game by all involved but the economics of this are primarily driven by a society that wants $1 hamburgers and that will shop at the ever-present Mart to save $0.12 on a tube of toothpaste. It is further fueled by a global economy where the lowest cost producers will win the majority of the business. Corporations must have profits to keep the flow of money coming that fuels investment in growth. This model is not going anywhere soon.

The key to breaking the cycle of poverty is education and training which leads to higher paying jobs. Minimum wage jobs should be a stepping stone rather than a landing spot. An artificially high minimum wage will remove the stepping stone but still be inadequate as a landing spot.

Proud Father
Cottonwood Heights, UT

Kaotic

I'm no expert on the matter so I won't argue to support or refute Bill Gates.

I will say this, it's easy to discredit him by calling him the 1%, but he's spending the latter years of his life giving his money away and trying to improve the world. The argument that he will say anything to save his profits doesn't make sense to me.

It's not hard to see that he's right. It's cheaper for companies to put in self check out machines than pay cashiers, McDonalds has automated a lot of their processes, Applebees is going to put a tablet at each table to replace servers, and I'm sure there are countless more examples. Higher minimum wage will increase the adoption of automation. Raising the minimum wage too much will help some, but cause others to lose their jobs.

Again, I'm no expert, but perhaps the solution is better training (trade schools, college where applicable, apprenticeship, etc.) to help low income people earn more without being replaced.

From Ted's Head
Orem, UT

Unless there are adequate exclusions for small business, raising the minimum wage will wreak havoc on the economy. Of course, if the idea is to move towards socialism then by all means, raise the minimum wage to $30 an hour.

The Economist
Newport, PA

We need to not only educate ourselves, but we need to educate ourselves for the jobs that are coming in the future. We're still stuck in the behind, it seems. We're falling behind much of the industrialized world.

Kaotic
USA, UT

Seems some UTAH Mitt Romney supporters still can't believe he lost. AMERICA made its choice and that was his policies and agenda would favor the 1% way too much. That's why he is not living on Pennsylvania Avenue now but in one of his other 4 homes. Wonder if Bill Gates and Romney have tea once in a while?

Proud Father
Cottonwood Heights, UT

Kaotic,

Did you read a single response?

I am in favor of helping more people make a wage that they can thrive on. Your original post said that "people can't make a living on $7 or $8 an hour part-time." The point of minimum wage is to set the minimum amount people can be paid. Someone in high school with no skills makes this amount. It was never intended to be an amount that someone can support a family on while working part-time.

Do you think we should set a minimum wage high enough that someone can make a living working part-time? If so, how many jobs do you expect to be lost? Do you think agriculture and service industries will push towards more automation? Do you think that manufacturers will move more factories to other countries?

It's not about keeping anyone down. It's about finding real solutions to real problems.

Evets
Eagle Mountain, UT

Gates has a valid point. I own a very small side business that manufactures and assembles things. My profit margin is very low but I keep the business because it gives me a way to support some causes/programs I believe in. Costs of adding workers is already more than I am comfortable with so when I look for ways to add production I add automation when possible. It is nothing fancy but if a machine can help me do a task faster it is usually cheaper in the long run to buy the machine than to add another worker. I am sure the big boys out there see it the same way; Just on a larger scale.

Hutterite
American Fork, UT

Bill is correct. Raising the minimum too high will cause automation. But I still don't think a couple bucks per man hour is enough to cause any fast food places to invest in expensive equipment. And I'd bet you could triple the wage of the people who pick lettuce in the imperial valley and not come close to justifying the capital cost of a machine to do it, if one were to exist. We can do better, starting with a more realistic valuation of our work.

Kaotic
USA, UT

The math doesn't add up. If wages remain stagnant but the cost of living increases substantially each year then America will fall deeper into poverty anyways. We can educate Americans all we want but there will be no jobs for them after they are educated. We will be a nation of smart, poverty stricken people because all the jobs were outsourced overseas to people who will work for $2 an hour. Whether it be manufacturing or anything else. Romney, Gates and the upper echelon are loving life right now. Obama asked Steve Jobs one time, "how do we get outsourced jobs back to America?" He emphatically said, "they will never come back!" Don't believe anything the 1% says. They will not automate America when foreign workers will still work for $2 an hour. Inflation and the cost of living in America has outpaced the minimum wage and higher paying jobs are non-existent for the unemployed workforce we have. Bill Gates is a smart man and he will tell you anything to keep those profits coming.

SLars
Provo, UT

Bill Gates also believes in open borders, and flooding the labor market and depressing wages.

It's time for a $10-12 minimum wage. If automation was possible, he would already be using it.

samhill
Salt Lake City, UT

I don't understand what all the fuss is about!

Let's just solve the problem of inadequate income and poverty and all kinds of stuff like that in one fell swoop! Just set the minimum wage to something that is so much more than "adequate" that virtually **anyone** will be able to live well on it. Say, $40/hr. Or, just to be safe, how's bout $60/hr. Or.....what the heck, just to make the math easy and everyone happy, let's set it at an even $100/hr.!

Wahdd'ya think folks? That should solve everything!

george of the jungle
goshen, UT

I can see that in the early 70's what making minimum wage could buy than and what things cost now. Gas was .25 a gallon. There is a big difference what 40 hours could buy than and now.

Proud Father
Cottonwood Heights, UT

Kaotic,

Over the past few years there have been many major news stories about outsourced jobs returning to the US. When the recession kicked in, wages here become lower while wages in Asia were rising.

I disagree that more education and training won't create more jobs. If we have a smarter workforce and a government which encourages technology advancement, we will have an advantage over other countries.

Ex-Pat of Zion
Lititz, PA

The dollar for the "wally burger" will be spent by the "entitle-ee" who got it from the government who got $1.25 from the middle class taxpayer. The 15 cents the corporation received in profit for providing the service went to the stockholder (11 cents) and the CEO (4 cents). Not a penny went back to the actual middle class taxpayer or the aspiring one. And the middle class also protects the corporation from strong armed robbers or shady business partners (through the government) with taxes it will impose on the grandchildren of the middle class. The question is: Will those grandchildren even be there (probably not).

You can only draw so much water out of a reservoir before it dries up. We're in a drought right now and the economic river has been dammed upstream. Technology does a much better job of containing the precious resource so there's less waste. 30 years ago that waste was called "trickle down".

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