Wednesday, June 20, 2018

Fast food ordering kiosks cause no job loss -- really

Fast food ordering kiosks shouldn’t cause loss of jobs overall.

Say kiosks allow my local McDonald’s to lay off five, thirty thousand dollar a year ($15/hr) workers. Assuming the consumer prices are held the same that comes to one hundred thousand dollars a year for the owner and the workers who are still working there to split (the latter much more likely if they have a union).

Newly flush employer and employees in turn spend that money causing in turn (the equivalent of) employing five thirty thousand dollar a year workers somewhere else. Money never stops moving.

But, you say, labor advocates are forever emphasizing that wages are only a fraction of the price of products – ergo, you always claim a small price increase can feed a large wage increase (more dollars for fewer hours even happens). So, how many jobs can that hundred fifty thousand worth of purchases really create?

Let’s take a kid’s lemonade stand. One kid spends all his time hawking his wares; he buys his drink from another kid who spends all his time making lemonade with lemons he buys from a kid who raises and delivers lemons.  Most purchase dollars ultimately funnel their way into wages. Think of a pin factory.  :-)