Don’t Trash Market Forces

by Don Boudreaux on May 19, 2016

in Competition, Complexity & Emergence, Innovation, Work

Driving to campus a few minutes ago I was behind a residential garbage truck.  This truck, though – unlike every other garbage truck that I’ve seen – had no crew of workers riding on the back of it to leap off to chuck the contents of people’s garbage cans into the back of the truck.  This truck instead pulled up beside each garbage can left on the street curb and a set of mechanical arms reached out from its passenger side to lift up each can dump the can’s contents into the truck’s rear bed.  The operation is surprisingly fast.

Truck-110-Automated-Side-Loader

No job is more classically unskilled than that of “garbage man.”  Yet as wage rates rise, even for unskilled workers, it eventually pays firms to invest in labor-saving capital goods, such as mechanisms that dump the contents of individual garbage cans in to the backs of residential garbage trucks.

I’ve no idea if the impetus for the particular labor-saving device that I beheld this morning is a legislated minimum wage (either actual or expected) or simply the market forces that raise the market wages of even the lowest-skilled workers in wealthy area such as northern Virginia.  Either way, however, if garbage-disposal companies can implement effective labor-saving devices, no one should be doubt that legislated minimum wages will price some low-skilled workers out of jobs.

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