I’ve always liked you, and have appreciated the things you’ve written. You’re humble despite your tremendous success, and unlike quite a number of others, you’re thoughtful and seem to examine many if not all of the facets involved in whatever subject you’re discussing. In your recent post about the minimum wage, though, I feel there are some facets—and guts—that you might be missing.
Whenever anyone older than, say, forty talks about the state of the economy, there’s always a detectable hint of “kids these days…” as if younger people want more for less and don’t know the real value of hard work. I’ll grant you that technological advancements have indeed adjusted our collective expectations for what a “hard day of work” looks like, versus handwritten bookkeeping or hand-drilling explosives into the walls of mines. But are expectations for a better quality of life involving less arduous jobs really that out of line? And why can’t we all benefit from technological advancements? (I’ll get to the more startling ramifications of this in a minute.)
More accurately put, though, what’s really going on is that we have enough information at this point to analyze the data and historical trends and say with certainty, “yeah, this isn’t going to work anymore.” The math just doesn’t add up. In the past, even twenty years ago, things were more geographically constrained and perspectives were narrower. But in a time where I can tweet a video of my dog being startled awake by his own fart to someone on the other side of the planet, we have access to a more comprehensive set of data than we did in the past. And we can get it with a few taps of our fingertips.
I’m not sure if you’re aware of this, but the minimum wage, adjusted for inflation, is actually worth less today than it was throughout most of the 1960s, 70s, and 80s. (In around 1968, it hit its peak value at about $10.50 in 2012 dollars.) Meanwhile, over that same period of time, average executive salaries have gone from roughly 40 times as much as the average employee to roughly 380 times as much as the average employee and in one particular case 830 times as much as the average employee. There is no maximum wage law, and those already at the top have taken great advantage of that, at everyone else’s expense. Despite promises from numerous conservatives over the years, success at the top hasn’t translated into success at the bottom. The “Trickle-Down Effect” is and always has been wishful thinking to justify exploitation of the economic system and all the workers therein. (e.g. “I have no responsibility to NOT gobble up as much as I possibly can, because if I do, then everybody else will benefit even more.”)
Let me ask you a question: When you bought your ticket from that automated machine, how much did it cost? As of this writing, an adult ticket at the AMC 25 here in New York City is $14.99. Now, you claim you only ever saw one actual employee, the manager. There was nobody in ticketing, no usher checking stubs, no cashier at concessions. They were all machines. (Though, this sounds a little absurd—was there even security? Who’s patrolling to prevent theater hopping?) So let’s just estimate for the sake of argument that each of those positions would have employed two people—two in the box office, two ushers, two at concessions, meaning that theater has gone from seven workers down to just one. How much do you think that remaining worker makes? Do you think he makes significantly more than a manager overseeing human employees, considering he’s the only one there? I can almost guarantee you the answer is no. And I can also almost guarantee you that ticket prices haven’t dropped as a result of cutting out expensive human labor for cheaper machines. So where is that money going? Who benefits? And what incentive do they have to keep around human labor regardless of the minimum wage?
See, you started out talking about the disappearance of entry level jobs, and how if it hadn’t been for that crappy, minimum-wage position scraping gum and soda-soaked popcorn off the floor, you never would have been able to work your way up to projectionist. (Where, by the way, you made $10/hour in 1979—that’s $32.61/hour, adjusted for inflation. A lot of people today don’t make that much after years at their jobs.) And yet, at that theater where you saw Boyhood, even that projectionist job was gone. The only person left was management (and probably some behind-the-scenes technical people on hand in case anything broke down). That runs counter to your point about how increasing the minimum wage is going to make entry-level jobs disappear. The truth is, technology is going to make all jobs disappear.
Mechanization is inevitable—not just for these positions but increasingly many others as technology becomes smarter and faster and more humanoid. And, critically, cheaper. In other words, I think you’ve gotten the causality a bit tangled, here: people aren’t being replaced by machines because the minimum wage is increasing (which it isn’t, really, when you account for inflation), people are getting replaced by machines because the cost of technology is decreasing. And there’s no way we can race to the bottom faster than that. In light of all this, it’s really odd to me that you seem to be blaming the workers for wanting to be paid better, considering there exists no reality at all where people can do these jobs better and less expensively than machines. Even at FoxConn, where workers are already paid significantly less than U.S. workers, human labor is being replaced by machines. How can we possibly compete with that? And what good does it do an economy to pay workers so little that they can barely even afford to survive, let alone buy all the stuff that’s being made? Even if these jobs are only supposed to be temporary stepping stones on the way to greener pastures, people shouldn’t have to starve until they happen to luck into a promotion or a better position. You can’t pay for groceries with the knowledge that tucking in your shirt makes you appear more presentable. Not to mention that the poor economy has resulted in a situation where people are finding themselves stuck in minimum wage jobs longer because better jobs aren’t available. Even lateral movement is difficult when machines are snatching up all those unskilled or low-skilled or even moderately-skilled jobs.
There’s an exchange between Walter Reuther, former head of the auto workers union, and an automotive executive who is often mistakenly claimed to be Henry Ford. The executive asks Reuther how he’s going to get all these new robots to pay his union dues. In reply, Reuther asks how the executive is going to get them to buy cars. There is indeed something troubling about a human workforce being increasingly replaced by machines, but the biggest threat to our economy isn’t entry-level jobs going away, it’s our stubborn refusal to acknowledge that most human labor could eventually be replaced.
If we are to avoid an economic catastrophe, we will have to disabuse ourselves soon of the notion that a person has to be employed at a job in order to obtain tokens to exchange for continued survival. Mechanization of labor is an inevitability, and more and more jobs are going to disappear, lost to cheaper robots that can do things more precisely and more quickly than even the most skilled human ever could. The human workload requirement is dropping, and will continue to drop. Decades ago, it started with manufacturing. Today, as evidenced by your trip to the cinema, service jobs are starting to go away. Even that manager you saw will soon be replaced by a centralized computer that remotely oversees operations across thousands of theaters. And there’s no going back, because why would we? Even if a projectionist offered to work for 50 cents a day, eventually the machine that’s replacing him will be cheaper to run than that. And in the meantime, that projectionist isn’t making enough to eat, let alone pay rent, let alone buy the latest iPhone.
And that’s where it all breaks down: Think of all the things you purchase in a given year. Now imagine you were only making $12,000, which, alarmingly, is considered the poverty level in the United States for a single individual. Or even $15,000, which is the amount you would make in a year at a minimum-wage job. Or $21,000, which is how much you would make if the minimum wage was increased to $10.10/hour. That means nearly everything you would have purchased beyond the bare minimum is now no longer being bought by you. Which means there’s that much of a revenue loss for all of those businesses that make or provide those things. Which means a greater likelihood that the employees of those businesses will lose their jobs. There is nothing to be gained from having a massive portion of the workforce unable to buy more than simply what is necessary for survival. If you follow the flow, it clearly stagnates the economy.
One should always be suspicious whenever someone points to the disempowered and disenfranchised as the source of society’s ills, rather than those who clearly have the ability to influence and exploit and manipulate the entire system. Do you honestly think that it’s the person making $15,000 a year who wants $20,000 a year who’s causing all these problems? Or is it the person making $100,000,000 a year in a position that used to yield $500,000 a year who is complaining that he has to pay even a dollar in taxes? Or the 696 banking executives who sold bad investments and jeopardized our entire economy who still somehow each took home a $1,000,000-dollar bonus at the end of the year? (For the record, a single one of those bonuses would cover the minimum wage increase for 200 people alone.)
Hard work does not always translate into success. In fact, easy work done by machines is increasingly translating into tremendous success for very few, leaving the rest of us out to dry. Please reconsider chiding the poor for pointing out that they can’t work more cheaply than a machine without starving to death. You’ve always been very reasonable in the past, and I hope you will continue to be.
(Mike Rowe’s original post can be found here, but I’m quoting it below as well, for context.)
The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour?
Back in 1979, I was working as an usher for United Artists at a multiplex in Baltimore. The minimum wage was $2.90, and I earned every penny.
When I wasn’t tearing tickets in half and stopping kids from theater hopping, I was cleaning out the bathrooms, emptying the trash, and scrapping dubious substances off the theater floor with a putty knife. I wore a silly outfit and smiled unnaturally, usually for the entirety of my shift. I worked 18 hours my first week, mostly after school, and earned $62.20. Before taxes. But I was also learning the importance of “soft skills.” I learned to show up on time and tuck my shirt in. I embraced the many virtues of proper hygiene. Most of all, I learned how to take shit from the public, and suck up to my boss.
After three months, I got a raise, and wound up behind the concession stand. Once it was determined I wasn’t a thief, I was promoted to cashier. Three months later, I got another raise. Eventually, they taught me how to operate a projector, which was the job I wanted in the first place.
The films would arrive from Hollywood in giant boxes, thin and square, like the top of a card table, but heavy. I’d open each one with care, and place each spool on a separate platter. Then, I’d thread them into the giant projector, looping the leader through 22 separate gates, careful to touch only the sides. Raging Bull, Airplane, The Shining, Caddyshack, The Elephant Man – I saw them all from the shadowy comfort of the projection booth, and collected $10 an hour for my trouble. Eventually, I was offered an assistant manager position, which I declined. I wasn’t management material then, anymore than I am now. But I had a plan. I was going to be in the movies. Or, God forbid, on television.
I thought about all this last month when I saw “Boyhood” at a theater in San Francisco. I bought the tickets from a machine that took my credit card and spit out a piece of paper with a bar code on it. I walked inside, and fed the paper into another machine, which beeped twice, welcomed me in a mechanical voice, and lowered a steel bar that let me into the lobby. No usher, no cashier. I found the concession stand and bought a bushel of popcorn from another machine, and a gallon of Diet Coke that I poured myself. On the way out, I saw an actual employee, who turned out to be the manager. I asked him how much a projectionist was making these days, and he just laughed.
“There’s no such position,” he said. I just put the film in the slot myself and press a button. Easy breezy.”
To answer your question Darrell, I’m worried. From the business owners I’ve talked to, it seems clear that companies are responding to rising labor costs by embracing automation faster than ever. That’s eliminating thousands of low-paying, unskilled, entry level positions. What will that mean for those people trying to get started in the workforce? My job as an usher was the first rung on a long ladder of work that lead me to where I am today. But what if that rung wasn’t there? If the minimum wage in 1979 had been suddenly raised from $2.90 to $10 an hour, thousands of people would have applied for the same job. What chance would I have had, being seventeen years old with pimples and a big adams apple?
One night, thirty-six years ago, during the midnight showing of The Rocky Horror Picture Show, I sat in the projection booth and read a short story by Ray Bradbury called “A Sound of Thunder.” It was about a guy who traveled back in time to look at dinosaurs, but against strict orders, ventured off the observation platform and accidentally stepped on a butterfly. When he returned to the present, everything in the world had changed. “The Butterfly Effect” is now an expression that describes a single event that leads to a series of unanticipated outcomes, resulting in a profoundly unintended consequence. (Ironically, it’s also a movie with Ashton Kutcher, which I had to pay to see 30 years later.)
Anyway, I’m not an economist or a sociologist, but I’m pretty sure a $20 minimum wage would affect a lot more than the cost of a Big Mac. Beyond the elimination of many entry-level jobs, consider the effect on the skills gap. According to the BLS, they’re about three million available positions that companies are trying to fill right now. Very few of those jobs require a four-year degree, but nearly all require specific training. And all pay more than the current minimum wage. If we want a skilled workforce, (and believe me, we do,) should we really be demanding $20 an hour for unskilled labor?
Last year, I narrated a commercial about US manufacturing, paid for by Walmart. It started a shitstorm, and cost me many thousands virtual friends. Among the aggrieved, was a labor organization called Jobs With Justice. They wanted me to know just how unfairly Walmart was treating it’s employees. So they had their members send my foundation over 8,000 form letters, asking me to meet with unhappy Walmart workers, and join them in their fight against “bad jobs.”
While I’m sympathetic to employees who want to be paid fairly, I prefer to help on an individual basis. I’m also skeptical that a modest pay increase will make an unskilled worker less reliant upon an employer whom they affirmatively resent. I explained this to Jobs With Justice in an open letter, and invited anyone who felt mistreated to explore the many training opportunities and scholarships available through mikeroweWORKS. I further explained that I couldn’t couldn’t join them in their fight against “bad jobs,” because frankly, I don’t believe there is such a thing. My exact words were, “Some jobs pay better, some jobs smell better, and some jobs have no business being treated like careers. But work is never the enemy, regardless of the wage. Because somewhere between the job and the paycheck, there’s still a thing called opportunity, and that’s what people need to pursue.”
People are always surprised to learn that many of the subjects on Dirty Jobs were millionaires – entrepreneurs who crawled through a river of crap, prospered, and created jobs for others along the way. Men and women who started with nothing and built a going concern out of the dirt. I was talking last week with my old friend Richard, who owns a small but prosperous construction company in California. Richard still hangs drywall and sheetrock with his aging crew because he can’t find enough young people who want to learn the construction trades. Today, he’ll pay $40 an hour for a reliable welder, but more often than not, he can’t find one. Whenever I talk to Richard, and consider the number of millennials within 50 square miles of his office stocking shelves or slinging hash for the minimum wage, I can only shake my head.
Point is Darrell, if you fix the wage of a worker, or freeze the price of a thing, you’re probably gonna step on a few butterflies. Doesn’t matter how well-intended the policy – the true cost a $20 minimum wage has less to do with the price of a Big Mac, and more to do with a sound of thunder. Frankly, it scares the hell out of me.
PS I looked into the Freedom Socialist Party and their demand for a universal, $20 an hour living wage. Interesting. You’re right – they’re serious. But not long after they announced their position, they made the interesting decision to advertise for a web designer….at $13 an hour. Make of that what you will… ( http://www.huffingtonpost.com/2014/10/18/socialist-13-hour_n_6008432.html )