Unions and Robots.


California has now decided to impose a a $15 per hour minimum wage on its remaining business economy.

Denial of consequences is an important part of left wing philosophy.

“California’s proposal would be the highest minimum wage we have seen in the United States, and because of California’s sheer size, it would cover the largest number of workers,” said Ken Jacobs, chairman of the UC Berkeley center. “This is a very big deal for low-wage workers in California, for their families and for their children.”

Implicit in all the assumptions is the belief that employers will not adjust by reducing the number of minimum wage employees they have.

The UC Berkeley estimate also includes some who earn slightly more than the lowest wage and stand to benefit from a ripple effect as businesses dole out raises to try to maintain a pay scale based on experience, Jacobs said.

If Brown’s plan passes, 5.6 million low-wage workers would earn $20 billion more in wages by 2023, according to the UC Berkeley analysis. It assumed no net jobs would be lost as businesses look to trim costs.

The experience in other places has not been positive.

Even a former chairman of President Obama’s Council of Economic Advisers, Alan Krueger, has cautioned recently that “a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”

Krueger is the economist whose “study” of the effect of minimum wage increases in fast food industry has been debunked as invalid.

But Card and Krueger’s conclusion is that there’s no effect, not that increases in the minimum wage increase employment as a general rule. “We believe that this research provides fairly compelling evidence that minimum-wage increases have no systematic effect on employment,” they write in their 1995 book, “Myth and Measurement: The New Economics of the Minimum Wage.” They also write, “On average, however, our findings suggest that employment remains unchanged, or sometimes rises slightly, as a result of increases in the minimum wage.” It would be fair for Hanauer to cite the individual studies showing an increase in employment, but to characterize Krueger and Card’s work on a whole as showing an increase in employment resulting from a minimum wage increase is inaccurate.

In less polite terms, it’s bunk ! Newer studies with better methods have shown That employment is reduced.

Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.

Now, we come to the larger issue the entire “Blue Model” of employment and politics.

The teachers’ unions won a temporary victory to force non-members to pay “agency fees” involuntarily, a decision that resulted from the death of Antonin Scalia last month.

With the absence of the late Antonin Scalia’s reliably-conservative vote, labor unions clenched an unexpected Supreme Court victory on union fees for government workers.

With agency fees – and the structure of union dues – remaining intact, union leaders hailed the court’s affirmation but warned there could be further challenges ahead.

The union case is among a handful of key disputes in which Scalia’s vote was expected to tip the balance toward a result that favored conservatives.

Some non-union teachers in California sued over the fair share fees, claiming that the fees are unconstitutional and violate their freedom of speech and association.

That decision will probably stand until a new Justice is confirmed and a Hillary Clinton presidency would keep the matter going. What about the rest of the world ?

But in the larger context the public unions greatest enemy isn’t the ghost of Antonin Scalia but the onslaught of technology. Recently, the mighty International Longshore and Warehouse Union (ILWU) was forced to let giant robots handle cargo in the port of Los Angeles. “At one of the busiest shipping terminals in the U.S., more than two dozen giant red robots wheeled cargo containers along the docks on a recent morning, handing the boxes off to another set of androids gliding along long rows of stacked containers before smoothly setting the boxes down in precise spots,” wrote the Wall Street Journal. “‘We have to do it for productivity purposes, to stay relevant and to be able to service these large ships,’ said Peter Stone, a member of TraPac’s board.”

About ten years ago the Longshoreman’s union struck the port of Los Angeles to try to keep out GPS devices to locate containers.

Traditionally, clerks had climbed around containers to identify them and mark their location. Like Luddites in the 18th century, they attempted to keep their 80 jobs by paralyzing the worlds busiest port.

The union says that over 51 permanent positions have been lost to outsourcing in recent years — a claim that the Harbor Employers refutes. According to the Harbor Employers, those 51 individuals either “retired with full benefits, quit, or passed away during the past three years.”

It is unclear when the strike will end but the Port of LA is urging both sides to come to an agreement promptly for the sake of international commerce.

But the union says the workers are standing up to some of the world’s largest shipping lines to protect the future of American jobs in the industry. “We just reached the point where somebody had to stand-up and draw the line against outsourcing, because these companies will eventually take all the good jobs,”said Fageaux.

According to its website, the Port of Los Angles is responsible for 1.2 million jobs in California and 3.6 million jobs across the country.

No matter. Those 51 jobs were important !

Eventually, the union lost. Now new troubles are coming.

In the end, even those advantages proved insufficient to stop automation. There will be pressure to deploy more robots. The “TraPac site is one of only four cargo terminals in the U.S. using the technology. That is fewer automated terminals than there are at the Port of Rotterdam in the Netherlands alone.” The ILWU is fighting a rearguard action; its members are training on automated terminals “to ensure there’s a future for the workers”. And probably to keep alive the possibility of paralyzing the docks via strike by console operators.

None of this can disguise the fact is that the glory days of union crane jobs are over. The CEO of Carl’s Jr, a hamburger chain, predicts that fast food restaurants of the near-future will have no human employees. A special report in the New York Times says “the robots are coming to Wall Street.”

Within a decade … between a third and a half of the current employees in finance will lose their jobs to … automation software.

Already, CAT scans are read by radiologists in India. Radiologists who have no local credentialing and who are unknown. All X-rays now are digital and can be transmitted across the world.

For the poor the citizenship deal is votes in exchange for welfare or sinecures. For the financially better off it is campaign contributions in exchange for crony capitalist opportunities. The Friedrichs vs California Teachers Association is an example of the latter, with the Supreme Court unable to reject a transaction that is ultimately unsustainable.

Technology may have changed the debate around closed union shops, quotas, identity politics and mandatory minimum wages from one of ideology to economics. What’s the use of ideological policies, if they’re can’t deliver the goods? If the public employee’s unions can do no better at protecting their fiefdom than the ILWU, if immigrants from Mexico can find no employment because robots are doing all the work then what will the politicians promise?

Yes. What can they promise ?

27 thoughts on “Unions and Robots.”

  1. IMO most California mountain counties and lots of small public entities will be bankrupted by this.

  2. That’s the idea, Tom. We’re red-state knuckle-dragging bipeds. And whether the pretext is gun control or water rights or the minimum wage or mandatory queer sex ed, we must be punished for it, every day, all the time.

  3. “What can they promise ?”

    Their ability to fabricate new varieties of bread and circuses may prove limitless. Or perhaps not; perhaps they’ll hope to trade in varieties of “identity politics” instead.

  4. “new varieties of bread and circuses may prove limitless.”

    Except that reality is closing in on Europe and Britain unless things change pretty quickly.

    No doubt Nick Clegg will fix it all.

    Having felt for five full years the frustration of seeing my husband, Nick Clegg, regularly reversing ill-judged Conservative decisions with little public credit, it is tempting to remain silent on the Brexit referendum – yet another ill-judged Conservative government decision that puts at risk the future of all our children just to sort out internal difficulties in the Conservative Party.
    Yet the wildly spurious claims of the Brexit campaign should make us on the non-Conservative side of the pro-European camp speak up. The latest of these came in a speech by justice minister Dominic Raab that terror suspects can “waltz” into Britain because of EU rules on freedom of movement. His statement follows accusations earlier this week that the freedom of movement principle is to blame for the entry of 50 extremely dangerous European criminals into Britain.

    No doubt all is well. Go back to sleep and it will be better in the morning.

  5. We are gonna have to deal with this. Not so much the minimum wage, but the automation of everything we can.

    We are at the point of being able to put almost anyone out of work. DeepMind just smoked a Go master 4 – 1 and no one expected that.

    If this is where we are going, and it is, we have to deal with literally hordes of humans who will have nothing valuable, by today’s economic standards, to contribute.

    The socialist point of view at least has some mechanisms to deal with this, the right, not so much.

    In Canada we are at about $11 an hour average minimum wage, but we do have a more socialistic society, with full health care for example. This unloads, to some extent, financial pressure.

  6. “This unloads, to some extent, financial pressure.”

    No surprise that you do not understand that Socialism ends all motivation except for the 1% that work for pleasure.

    My partner used to say, “I hope they never find out that I would do this for free.”

    The present young GPs I have talked to are unhappy, as I expect most Canadian docs are under Socialism. Productivity crashes and eventually ends.

    There are occupations that some of us do for pure pleasure and the challenge, know as “Flow,” by readers of Csikszentmihalyi.

    Some people are driven by money (also known by the left as “Greed.”) Others by power, which is why most go into politics.

    The smallest group loves its work and most surgeons are in that group. Carpenters are also, I believe, and maybe even computer programmers, although they are more like crossword puzzle addicts.

    I have a step son who builds houses and loves his work. Whether most lawyers are equally motivated by pleasure is another mystery. Airline pilots are probably in the group and I’m sure fighter pilots are but that is a very small group. Soldiers seem to thrive on what they do and they certainly don’t do it for money. That’s a very rare example of Socialism that works but it works because they are other directed. Not many people are.

  7. 1.) I support the CA effort on minimum wage. Someone needs to do this so that the rest of us can learn from their experience. The minimum wage issue never dies with the Left because no one ever implements it to the scale that they dream of. Give the Left all the rope that they want.

    The above is the same principle as what took place with Kansas City schools:

    For decades critics of the public schools have been saying, “You can’t solve educational problems by throwing money at them.” The education establishment and its supporters have replied, “No one’s ever tried.” In Kansas City they did try. To improve the education of black students and encourage desegregation, a federal judge invited the Kansas City, Missouri, School District to come up with a cost-is-no-object educational plan and ordered local and state taxpayers to find the money to pay for it.

    Kansas City spent as much as $11,700 per pupil–more money per pupil, on a cost of living adjusted basis, than any other of the 280 largest districts in the country. The money bought higher teachers’ salaries, 15 new schools, and such amenities as an Olympic-sized swimming pool with an underwater viewing room, television and animation studios, a robotics lab, a 25-acre wildlife sanctuary, a zoo, a model United Nations with simultaneous translation capability, and field trips to Mexico and Senegal. The student-teacher ratio was 12 or 13 to 1, the lowest of any major school district in the country.

    The results were dismal. Test scores did not rise; the black-white gap did not diminish; and there was less, not greater, integration.

    The Kansas City experiment suggests that, indeed, educational problems can’t be solved by throwing money at them, that the structural problems of our current educational system are far more important than a lack of material resources, and that the focus on desegregation diverted attention from the real problem, low achievement.

    2.) If we could combine policies so that they work in unison then I’d feel better about such efforts.

    Instead of a minimum wage by legal mandate I’d much rather see a minimum wage arise through labor scarcity. This means deporting millions. This means stopping immigration. This might even mean revoking residence rights for some green card holders.

    It costs money to live in our society. It costs money to provide gov’t services to people. There is some income, or taxation, figure at which people are not a burden and not a contributor to society. This is the makers versus takers scenario. Society is better off by increasing the number of makers and reducing the number of takers. We can’t make progress on that formula if we keep expanding the low wage jobs so that employers don’t have to devote scarce capital to capital replacement of labor. As these low wage jobs proliferate the burden of supporting the takers falls ever more on the takers.

    Higher wages will increase the appeal of robotics. That’s good. The bad is that we increase the supply of zero marginal product workers. While we can’t eliminate this category of worker what we can do is stop adding to it. Let’s start with that.

    Of course, this being America what we’ll see is the opposite, a big minimum wage, an increase in ZMP workers, more immigration, more welfare, more dissent, more destruction of civil society, more offshoring in order to avoid the cost of roboticization, more income inequality.

  8. In Canada we are at about $11 an hour average minimum wage, but we do have a more socialistic society, with full health care for example. This unloads, to some extent, financial pressure.

    Not for long. Diversity is acid to sense of sharing.

    That’s a very rare example of Socialism that works but it works because they are other directed. Not many people are.

    The only example of socialism which works is the family unit. Parents support their children.

  9. ‘“This unloads, to some extent, financial pressure.”

    No surprise that you do not understand that Socialism ends all motivation except for the 1% that work for pleasure.’

    A simple statement to point out that a Canadian might need less money, for a minimum wage, invokes the fanatical right wing response. Don’t you ever get tired of an adversary based existence?

    It will make it almost impossible to deal with what’s coming, as we automate everything. Doctors will be among the first of the higher paying jobs to be eliminated.

  10. “It will make it almost impossible to deal with what’s coming, as we automate everything. Doctors will be among the first of the higher paying jobs to be eliminated.”

    Damn, Penny – I’d like to see how THAT would play out in this century – an automated doctor?

    Some kind of automated medical booth – stick your arm in here for a blood pressure check and for some automated needle to stab a vein and do a blood analysis, pee into a cup here for another analysis, sit on this seat for an automated colonoscopy … really, how does this automated doctor thing actually work?

  11. “invokes the fanatical right wing response. Don’t you ever get tired of an adversary based existence?”

    Is every indication of reality to you “fanatical right wing?” I guess so.

    I have been talking to Canadian doctors for many years. In the 80s there was a mass exodus, many of whom came to California.

    I used to attend a good laparoscopy meeting in Saskatoon. Then one year, it was not held. All the surgeons who had put it on had emigrated.

    Canada stopped adding medical students and nurses and stopped hospital construction.

    Then a few years ago, probably after conservatives took over from the lefties, Canada started building hospitals again. I met an architect at a quality improvement meeting who was designing the first new hospital in a decade.

    Now with Trudeau, I expect the changes to reverse. You keep denying the private clinics growth there so I don’t expect you to know what is going on.

    When Labour came back into power in Britain, they reversed “fund holding” which was Thatcher’s reform to improve care. I was a consultant in the East Riding of Yorkshire to teach practice managers to negotiate with District hospitals. That was 1995.

    Aggressive ignorance is what you have to offer here.

  12. “really, how does this automated doctor thing actually work?”

    First come the nurse practitioners, who are now running small clinics in WalMart.

    My wife was a nurse practitioner and used to call me for advice even though we were divorced because the GP who was supposed to be supervising her was too busy.

    There will be a few disasters but, all in all, the NPs do a pretty good job. She was the “family doctor” for my daughter-in-law’s whole family and they loved her.

    When I was doing telephone peer review for workers comp, I talked to a lot of Physician Assistants who were often grateful for the advice. The WC Orthopds would often have five offices and only go to the office to see surgical cases.

    Automation is happening to hospital pharmacies and general medicine will be first. It won;t be easy to use robot surgeons although robot “assistants” are in use but mostly for show.

    Eye surgery is largely automated. The Soviets actually invented radial keratotomy and used an assembly line. LASIK is the modern version and is partly automated.

    Radiologists are quite vulnerable as x-rays are now all digital and lots are read in India. Kaiser has one anesthesiologist on duty and all anesthesia is given by nurse anesthetists. I have reviewed a few Kaiser malpractice cases as a result. The MD “supervises” all the NPs.

    The old joke applies. “How do you want it ? Fast, Cheap, or Good ? Pick any two.”

  13. “Is every indication of reality to you “fanatical right wing?” I guess so.”

    Not at all. If I say it might be cheaper in Canada for poor people to live as they have health care, I’m simply stating a fact. For you to to attack me for socialism over this, is fanatical. Aggressive, you bet.

  14. “Already, CAT scans are read by radiologists in India. Radiologists who have no local credentialing and who are unknown. All X-rays now are digital and can be transmitted across the world.”

    But doesn’t the American physician or whatever professional or manager makes the decision to send them to India, and have them read by Indian Radiology Group XXX, have the legal responsibility for the outcome? Wouldn’t they be on the hook for any malpractice claims?

    Certainly, if Boeing outsources a critical part to a foreign manufacturer and the part breaks and causes an accident, Boeing will not be able to disclaim liability by saying, “well, we didn’t make that part.”

  15. The labor productivity statistics over the last few years aren’t really very supportive of a sea change being driven by robotics, AI, etc.


    This article:


    asserts that the reason for the tailing-off is a decline in capital spending: something that is obviously sensitive to wage rates and hence to the labor-to-capital tradeoff.

    I suspect that there is more to it than that, though…for one thing, there has been an absolute plague of bad technology implications on large scales. How much labor productivity was lost thru the Target Canada debacle that I posted about a while back?

  16. What I don’t understand is why the Californians are such pikers. I say we should make the minimum wage $30/hr.

  17. “Wouldn’t they be on the hook for any malpractice claims?”

    Good point. I had a reply but lost it I guess. Here is a discussion of the Indian radiologist issue.

    The lack of availability of timely diagnostic services causes great problems for clinicians during emergencies and during the night hours. Moreover, the Health Care Financing Administration (HCFA) in the US mandates round-the-clock services in every hospital. By outsourcing radiology reporting to places such as Australia, Europe, and some Asian countries (including India) hospitals in the USA, UK, and Singapore can be assured of competent and timely professional help. The immediate availability of diagnostic services, which is extremely important during medical emergencies, is a big advantage that outsourcing offers. Outsourcing of ‘on-call’ night reporting is popularly called ‘nighthawking.’

    Another link is this one which is about remote reading but still in the US.

    That might have caught the true problem, if only Drumm’s doctor and radiologist had talked over the results. And up until a decade or so ago, that’s what would have happened. “In the old days, the radiology suite was right next to the ER, so the radiologist would walk past the patient on his way to read the scan,” says Lauren Ellerman, a personal-injury attorney in Roanoke, Virginia, who has handled radiology cases. Today, that image of doctors conferring in front of a backlit X-ray is as outdated as Marcus Welby.
    With the now common use of teleradiology, the doctors who read your scans may well be across town, several states over or on the other side of the world. And instead of discussing what they see with your M.D., the often far-flung radiologists may send only written reports with little or no interaction. The result can resemble a perilous game of telephone.

  18. “When Labour came back into power in Britain, they reversed “fund holding” which was Thatcher’s reform to improve care.”

    My GP was opposed to fund-holding when it came in. When it was scrapped he told me how wrong he had been.

  19. “My GP was opposed to fund-holding when it came in. When it was scrapped he told me how wrong he had been.”

    The GPs were used to sending the patent off to hospital and not knowing anything about it until they came back, or didn’t.

    Learning to handle a budget and negotiate was new and some probably did not want the trouble. However, the relationship between GP and consultant improved tremendously when they found out the GP could send patients elsewhere if ignored.

    I suspect that knowledge and experience is what changed his mind.

    I spent some time learning how the system worked and now enjoy “Doc Martin” on NetFlix as it shows how it works, at least in drama.

  20. Mike K, I hear you talk about the X-ray and N/P issues but I’ve never seen them. There are radiology clinics in this area, and if my GP wants me to get an X-ray or CAT scan for a calcium score he just writes a referral and off I go. They do the work, read them, then send him copies. Similar for blood work. There are P/A’s working in the same facility and they will see you if the doctor is too busy.

  21. Schwartz,

    I’ll see your $30 and raise you $50. Time for Cali to go for the gold again. Eureka!

  22. Michael, I assume you are not in California and may not be in one of the usual big cities. This is growing and metastasizing.

    That’s why I included the examples with links. There are many more.

    Some of this began at night and weekends. The hospital where I worked for 25 years and organized the trauma center, I would not be admitted to. It has all changed.

    One more example.

    What has happened, of course, is that these companies when they first started out years ago, were there to help small practices cover at night and maybe provide a little bit of subspecialty expertise.

    That’s the way it used to be. As time went on, some of these companies went public, so now you’re dealing with investors who are looking for profit growth, and so these guys had to continue to grow; the only way they could grow was by becoming day hawks and to try to push incumbent radiology groups out of their hospital contracts and take those contracts over.

    Another discussion from a journal that supports Health care “reform.”

    Growth in the global market for telemedical services is being driven by economics. Two operational models are already recognizable. “Nighthawk” providers are virtually indistinguishable from their domestic counterparts with respect to medical malpractice liability and price for service. Indian providers, in contrast, offer deep price discounts on services, but jurisdictional loopholes are likely to allow these providers a method to avoid medical malpractice liability. Hospitals that outsource their radiology services need to be aware of these differences, because hiring Indian telemedical providers will likely result in a shift of medical malpractice liability from providers to hospitals.

  23. California has now decided to impose a a $15 per hour minimum wage on its remaining business economy.

    They really don’t want to fix the illegal immigrant problem. The ceiling on under-the-table pay has now been bumped up to $14.99 per hour.

    The illegals of California thank the Democrats. The American citizens probably won’t be very happy, especially those who were making $16.00 per hour, having worked their way up the wage scale by $6 per hour.

  24. “What I don’t understand is why the Californians are such pikers. I say we should make the minimum wage $30/hr.”- Robert Schwartz

    I wonder if the motivation for this is to remove a percentage of the population from government poverty programs.

    This now puts gross income at $30k. Doesn’t that put the wage earner above government programs like EITC, some housing programs and the like. It might even reduce the amount of food stamps received.

    Think of it as cost shifting.

    This is speculation on my part as I’m too lazy to do the research and see if it has that effect.

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