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Ownership - The Minimum Wage Replacement

By       Message Gary Reber     Permalink
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Whether or not raising the minimum wage is harmful and will cause less employment should be discussed within the larger scope of economic inequality. The proposed measures are at best a sedative to ease the pain of deteriorating livelihoods, but not the solution that is necessary to significantly address income disparities between the wealthy ownership class and the propertyless, non- and under-capitalized American majority.

While a $1 initially and another $1 in 2016 will be welcomed by low-income minimum-wage earners, this is certainly not the solution to the serious widening income gap between the "haves' and the "havenots."

It doesn't make any difference what's going on in the scientific world or the business world or the industrial world, the nation still believes full employment with a minimum wage and other redistributive social insurance programs will solve our income distribution problems. This is what progressive political figures have always maintained.

Digital computerized operations, automation and other productive technological advances are destroying jobs and devaluing the worth of labor. This tectonic shift in the technologies of production and the greater employment of robotics and super-automation to save labor costs is not well understood and reported by the national media. Advances in software and production technology, abundant and relatively inexpensive energy, fast access to huge amounts of data, and growing global demand will continue to drive competitiveness of American manufacturing, and drive down labor costs, except for people with jobs in research and high-tech skilled work. Such innovation will increasingly impact the fast-food and services industries and as well result in fewer and fewer jobs as a result.

The global economy, as well as the national economy, will continue to bifurcate into a rich/tech track and a poor/non-tech track due to continual technological invention and innovation that will destroy and/or replace old non-tech jobs. For example, Foxconn (China's largest private employer and the manufacturer/assembler of Apple and other global manufacturers smartphones has plans to install over one million manufacturing robots within three years (click here). Already , fast-food chains in Japan, China and Great Britain have begun piloting the use of robots to cook meals. These fast-food robots are capable of preparing full sushi rolls or noodle dishes for Asian food outlets. In many cases, customers complete their orders through a touch screen, which then alerts the robot how to prepare the meal. No humans needed.

Dan Fastenberg, a writer for, stated the obvious: " It stands to reason that American fast-food companies will adopt the robots at some point." It is also logical to expect that demands for increased wages without corresponding labor productivity gains will intensify such efforts to adopt robotics and sophisticated automation.

The off-shoring of manufacturing will eventually be replaced by human-intelligent super-robotic automation. This too will put competitive pressures on American companies to ramp up technological productivity.

The impact of technological invention and innovation should surprise no one who is conscious and who has even causally observed the constant shift to non-human productive inputs in the manufacturing, distribution, and sales of products, as well as the delivery of services, that has been occurring during their lifetime. The first burst of this phenomena was the Industrial Revolution. But now we are in an age of technology sophistication that is permeating every sector of industry and our day-to-day lives.

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There's nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production. For others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes or loss of employment.

Business investment in machine and robotic super-automation hardware and software is more than it's ever been. What's not back is the jobs.

The percentage of Americans with jobs is at a 20-year low due to tectonic shifts in the technologies of production. In every industry, we are witnessing fewer interactions with other human beings. Everyone should be aware of robotic kiosks----providing bank teller services via ATMs, sales customer services via e-commerce, and switchboard support services via voice recognition technology. Super-automation is transforming commerce. There are heavily automated warehouses where there are either very few or no people around. Increasingly jobs, especially those that involve relatively structured tasks, are being replaced by human-intelligent robotic computerization and physical entities other than humans.

The pursuit for lower and lower cost production that relies on "slave wage" labor will eventually run out of places to chase. Eventually, "rich" countries, whose productive capital capability is owned privately by its citizens, will be forced to "re-shore" manufacturing capacity, and result in ever-cheaper robotic manufacturing.

"The era we're in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking," says David Autor, a labor economist at Massachusetts Institute of Technology.

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While I am not opposed to the concept of a "minimum wage," economic productivity is a bigger part of the story. Those arguing its support basically argue that labor is producing more value today, but working people aren't seeing any of the gains. Who has walked away with the proceeds from all that productivity? But contrary to general belief, when looked at through the lens of two factors of production----human and non-human----labor is not becoming more productive; the non-human means of production is driving the productivity gains.

A January 2013 report from Oxfam noted, "The richest one percent has increased its income by 60 percent in the last 20 years." It further argued that the 2012 net income of the world's top 100 billionaires--a haul of $240 billion--would be four times the amount needed to eliminate extreme poverty internationally.

These arguments fail to point out the income source for the richest one percent is not their labor but their dividend income derived from their ownership of productive capital assets----the non-human factor of production.

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Gary Reber is a leading advocate for economic justice. He is the founder and Executive Director of For Economic Justice (, and an advocate and author for economic justice through broadened ownership of wealth-creating, (more...)

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