New study finds minimum wage hikes lead to job automation – Washington Examiner

States that raise their minimum wages may put low-skill workers at risk of having their jobs automated, according to a new academic paper published Monday.

The study published by the National Bureau of Economic Research finds that higher minimum wages are likely to lower employment in manufacturing jobs that can be performed by robots, and hit older, black, and female workers particularly hard.

The paper, which has not yet gone through the peer review process, was written by Grace Lordan of the London School of Economics and David Neumark of the University of California at Irvine, one of the pre-eminent academic analysts of the minimum wage.

It is sure to once again reignite the long-running debate over the effects of higher minimum wages. Many Democrats have called for raising the federal minimum wage from its current rate of $7.25 an hour to $15 in order to increase workers' pay. Democratic-run states and cities have implemented wage floors above the federal level.

The benefits of higher minimum wages, however, would be undercut if workers lose jobs.

The paper warns that increases in the minimum wage "will give incentives for firms to adopt new technologies that replace workers earlier."

Using Census data to compare states with differing minimum wages and a dataset of jobs vulnerable to automation developed by MIT economist David Autor, the study published Monday finds that some workers "are in fact quite vulnerable to job loss because of automation following a minimum wage increase."

The study starts the clock at 1980, but the authors find some evidence that job losses stemming from automation spurred by higher minimum wages might be getting worse in more recent years, possibly because automation is getting better or because the minimum wage hikes are getting bigger. They speculate that in the years ahead, jobs like driving taxis or tending cash registers could be lost to automation.

The debate over the minimum wage picked up this summer in response to a study that found that Seattle's experiment with a $13 minimum wage hurt that city's workers. Groups supportive of higher minimum wages have criticized the research that found that negative result.

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New study finds minimum wage hikes lead to job automation - Washington Examiner