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Now You Can Rent a Robot Worker:
Polar Manufacturing has been making metal hinges, locks, and brackets in south Chicago for more than 100 years. Some of the company's metal presses—hulking great machines that loom over a worker—date from the 1950s. Last year, to meet rising demand amid a shortage of workers, Polar hired its first robot employee.
The robot arm performs a simple, repetitive job: lifting a piece of metal into a press, which then bends the metal into a new shape. And like a person, the robot worker gets paid for the hours it works.
Jose Figueroa, who manages Polar's production line, says the robot, which is leased from a company called Formic, costs the equivalent of $8 per hour, compared with a minimum wage of $15 per hour for a human employee. Deploying the robot allowed a human worker to do different work, increasing output, Figueroa says.
"Smaller companies sometimes suffer because they can't spend the capital to invest in new technology," Figueroa says. "We're just struggling to get by with the minimum wage increase."
(Score: 5, Insightful) by Immerman on Thursday January 20 2022, @02:49AM (2 children)
Central bank games aside, inflation is roughly determined by the ratio of the amount of currency (real, electronic, and debt) in circulation to the the amount of (real, non-monetary) wealth in circulation.
Double everybody's pay without without altering wealth production, and the value of the currency is likely to roughly halve to match, so the net effect is nobody is better off, and the value of any non-invested savings have been halved.
So you're not completely wrong - paying people more without increasing the amount of wealth they generate will in fact cause some inflation. There are two important question to answer though
1) How much does the *total* amount of currency in circulation change? The
Wealth inequality is pretty extreme, with the top 20% of households averaging $234k (an makes up 52% of the nation's total household income), while the lowest 40%
averages only $25k (and makes up only 11% of the nation's household income).
You could triple the household income of the poorest 40%, and the nation's total household income would only increase by 33%. And with 133% as much money spent on the same amount of real wealth you'd expect the value of the dollar to fall to about 75% of it's original value. Which kinda sucks for the people at the top, but the 40% of the population whose income just tripled are still taking home 3x75% = 225% as much real wealth as they were originally.
And that's ignoring corporate income and debt - that's another huge amount money in circulation that wasn't affected, so instead of having 133% more money in circulation reducing money's value to 75% of its original value, you're looking at maybe 110% more money in circulation, reducing money's value to 91%, so that the bottom 40%'s tripled income means they're taking home 275% as much real wealth.
2) Does the amount of wealth generated/purchased change? If you increase the amount of wealth in circulation, you increase the value of the currency it's traded in.
If people at the bottom suddenly have a lot more wealth, they're likely to start buying higher quality goods. That means production capacity currently dedicated to cheap Walmart trash will instead be allocated to more "premium" products whose real value is greater, and so there's more real wealth in circulation. Potentially a LOT more wealth, since at the low end quality tends to increase much faster than cost.
(Score: 1, Interesting) by Anonymous Coward on Thursday January 20 2022, @06:13AM (1 child)
Don't forget the one-off effect on the poor that is the effective 25% reduction of their debts. Student loans might not be bankruptcy-cancelable, but you can inflate them away.
(Score: 0) by Anonymous Coward on Friday January 21 2022, @04:07AM
Yep, that's how the roughly $275tn equivalent WWII debt was paid off, they inflated it away.