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Advocates of Minimum Wages…

… might wish to take note of Chipotle’s announcement yesterday of plans to automate much of its production of guacamole.

My point here isn’t that the “Autocado” machine (or Chipotle’s “Chippy“) is itself a direct response to a minimum wage; perhaps it’s not. Instead, my point is that labor-saving innovation is real and at the ready. Firms – even those Chupacabra-like beasts with monopsony power over low-skilled workers – will turn to it more and more the higher are labor costs. And employers couldn’t care less if the costs of labor are driven higher by market forces or by government force.

The notion that employers respond to higher minimum wages by doing nothing other than raising the wages of all affected workers is about as uneconomic a notion as notions come. Yet, sadly, the world today has no shortage of ‘economists’ who embrace and trumpet this very notion.

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