$15-an-hour minimum wage is a problem?

Last updated 2018 08 19

$15-an-hour minimum wage is a problem? The idea is a major-topic of discussion in the news right now.  Here in Alberta, where we have just been blessed by the voters with a socialist government.  The leader of the New Democratic Party (NDP), Rachel Notley, picking up on popular sentiments, announced that the NDP will work to bring about and implement a $15-an-hour minimum wage.  My wife and I made some experiences with minimum wages that I will describe here.

We farmed not too far from where we now live. Our main crop was hay, most of which we fed to the sheep we raised. The growing season is short and the harvesting season is very short, while we have to be ready to feed animals for about 210 or more days of the year.

We had a bale wagon that had to be loaded by hand but could be unloaded with hydraulics. We needed help with loading the wagon, for about 10 minutes of work out of 45 minutes of picking up bales and unloading them. For that I tried to get some local kids to help. At a bit more than the minimum wage, the pay for the job started when I picked up the helpers and stopped when I dropped them of off at home again.  I thought, it should not be too difficult to find help, but I was wrong.

Hay needs to be picked up and put into stacks as soon as it has been baled, or else bales that are worth thousands of dollars can be lost in just one rainfall. My way out of the dilemma was to find a used bale wagon with a mechanized bale pick-up. That solved the problem for me.

That bale wagon paid for itself within a couple of years, by preventing me from having to pay wages to helpers that it took me a lot of effort to find, pick up, feed, and bring back home. I would have rather done the work with people than with a machine, but I had no choice. The machine never told me that it didn’t want to come when I needed it. It was always available and only once had a breakdown that it took me ten minutes to fix (even though I also had to make some repairs and modifications to fine-tune the bale wagon in off-hours).

Not only did the bale wagon save us a lot of money in wages, I had no trouble selling it (after we stopped for good, growing and making hay) for just as much I had paid when I had bought it. Mechanization in that case won hands-down for us.

You may have noticed more and more self-serve check-outs at supermarkets. Another aspect of mechanization is in the making, for identical reasons, to do away with overly expensive minimum-wage jobs, by having customers in ever more fast-food joints place orders on computer terminals.

Just a few weeks ago I watched a video of a machine that makes hamburgers to order.   I suppose, that thing will work well for large-volume restaurants, but–without a doubt–it will eventually be refined to be a good and economical alternative to minimum-wage workers at smaller restaurants as well.

The more demand there is for higher wages, the faster many higher-wage jobs will be priced out of the market. The saying, “You too can be replaced by a button,” is not just a joke. Mechanization kills jobs, but it needs incentives, and higher minimum wages are a very good incentive for mechanization.


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