New National Television Ad Warns of Automation as Consequence of Federal Wage Hike

  • Publication Date: February 2014

  • Topics: Minimum Wage

Today the Employment Policies Institute (EPI) is announcing a new national commercial airing this week that emphasizes the Congressional Budget Office’s report which estimates up to a million jobs could disappear if the federal minimum wage is raised to $10.10 per hour.

View the new ad here:

The commercial features disappearing employees in positions such as gas station attendants, grocery store checkers, and waiters. The voiceover states: “President Obama wants to raise the minimum wage by nearly 40 percent. That may sound like a good idea. But if customers won’t pay for it, it forces employers to install technology that takes the place of entry-level jobs. Every time you use a self-check-out lane or even a touch-screen ordering system, it’s a task that used to be part of someone’s job description. When you raise the minimum wage, a new government report confirms that up to one million jobs will disappear.”

The CBO estimated that 500,000 jobs–and as many as one million jobs–would be eliminated if the minimum wage increased to $10.10. Its finding is based on and consistent with the vast majority of the best economic research on this subject, as summarized  by economists at the University of California-Irvine and the Federal Reserve. Additionally, analysts at KeyBanc Capital Markets explained in a recent report that coming increases in labor costs are “causing restaurant companies to be more aggressive in finding solutions to address labor inflation.” Those “solutions” include the further transition to self-service technology.

“This debate over the federal minimum wage is different than any that’s come before: Not only are proponents seeking a more radical change to labor law, but technology now exists that allows employers to rethink their business model,” said Michael Saltsman, research director at EPI. “In an environment where unemployment for young adults has been above 20 percent for more than five years, the last thing we need is public policy that forces employers to replace employees with technology.”