“if you artificially hike the price of labor, you reduce demand for workers. In California, this is playing out in terms of lost jobs, increased automation, and other consequences that result when politicians signal a unicorns-and-rainbows vision of the marketplace to their allies and leave the public to deal with the resulting mess.”
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“”A California state law is set to raise fast-food workers’ wages in April to $20 an hour. Some restaurants there are already laying off staff and reducing hours for workers as they try to cut costs,” Heather Haddon reported for The Wall Street Journal. “California restaurants, particularly pizza joints, have outlined plans to cut hundreds of jobs in the months leading up to the April 1 wage mandate, according to state records. Other operators said they have halted hiring or are scaling back workers’ hours.”
This comes after California Pizza Hut franchisees laid off over 1,200 delivery drivers in anticipation of the minimum wage hike. It comes in the wake of McDonald’s and Chipotle Mexican Grill announcing higher menu prices to accommodate labor costs; those higher prices can be expected to drive away some customers, resulting in less need for workers to service lower demand.”
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“less customer traffic isn’t the only way to reduce staffing needs; you can also replace people with technology. Chipotle announced plans to use robots to assemble burrito bowls. El Pollo Loco is doing the same for making salsa. Other restaurants are adopting automated fryers and burger-flippers to reduce the costs of employees.”
“Today, Amazon terminated its planned acquisition of iRobot, manufacturer of Roomba robot vacuums, as the companies saw “no path to regulatory approval.” iRobot then announced that it would be cutting nearly one-third of its work force.
While the companies blamed regulators in the European Union for the termination, meddlesome U.S. lawmakers played their own part in souring the deal.”
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“as the companies waited on regulators, iRobot was losing money: The company took out a $200 million bridge loan in July 2023 to tie it over until the deal closed (at which point Amazon lowered its offer to account for the new debt). With the deal scuttled, Amazon will now pay a $94 million termination fee, but iRobot expects to report an operating loss of as much as $285 million for 2023.
It’s worth wondering, then, if this is what lawmakers like Warren had in mind. The FTC letter worried the merger “could harm consumers and reduce competition and innovation in the home robotics market.” But without the merger, iRobot could very well face insolvency, and nearly one-third of its work force will lose their jobs—and considering the company is based in Massachusetts, a substantial number of them may very well be Warren’s constituents.”
“California’s attempt at forcing gig workers to become traditional employees backfired by driving many of those workers out of their jobs.
In the wake of a new law (Assembly Bill 5) that was intended to reclassify many independent contractors as regular employees, self-employment in California fell by 10.5 percent and overall employment tumbled by 4.4 percent, according to a study released Thursday by the Mercatus Center, a free market think tank housed at George Mason University. In professions where self-employment was more common, the effects were more dramatic, and in some fields employment declined by as much as 28 percent after A.B. 5’s implementation.”
“Companies rushed to break ground on new factories in hopes of winning those federal incentives, driving industry spending on construction to record heights. And politically, Democratic advisers said, the building frenzy provides signs of progress that Biden can point to in nearly every state.
“By the end of the election, every voter in battleground states is going to hear this story about what he’s done to invest in America’s economic future,” said John Anzalone, the founder of Impact Research and a longtime Biden pollster. “That is just not a message that Trump has.”
Yet central to Biden’s story of a manufacturing comeback is the prospect of thousands of new jobs spurred by his new laws — and so far, those have been slow to materialize. While Biden often touts the nearly 800,000 manufacturing jobs created during his presidency, the vast majority came prior to passage of the IRA and CHIPS, when Americans’ surging demand for goods during the pandemic drove a rapid industry recovery.
Since then, hiring has stalled as the economy evened out, with manufacturing-centric swing states like Michigan, Wisconsin and Pennsylvania actually losing factory jobs in 2023.
Those conditions have left Biden selling a manufacturing jobs boom that may not arrive in full force until well after November. Most companies that broke ground after Biden’s economic bills became law in August 2022 won’t have their new plants up and running until later this year — at the earliest. In high-profile setbacks for the White House, chipmakers TSMC and Intel have both signaled plans to delay production at their newest U.S. factories until 2025.”
“A new California law will require that most food-service workers get paid at least $20 per hour starting next year.
But hundreds of pizza delivery drivers in the Los Angeles area are about to discover Thomas Sowell’s famous adage that the true minimum wage is zero.
Pizza Hut announced Wednesday that it would lay off about 1,200 delivery drivers in Los Angeles, Orange, and Riverside counties, CBS News reported. Pizza Hut franchises are outsourcing delivery to third-party apps like GrubHub and UberEats as a cost-saving measure in advance of the new law taking effect.”
“The laws surrounding affirmative action in employment haven’t changed.
Federal contractors have been required to take affirmative action, steps to ensure applicants are treated fairly, since 1965 when President Lyndon Johnson signed Executive Order 11246. Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, religion, sex, and national origin.
Under the Equal Employment Opportunity Commission’s guidelines on voluntary affirmative action, employers are encouraged to take voluntary steps to “correct the effects of past discrimination and to prevent present and future discrimination” such as expanding their applicant pools to ensure a diverse body of applicants for any given position.
As the Equal Employment Opportunity Commission noted in a statement after the decision, the cases do not “address employer efforts to foster diverse and inclusive workforces or to engage the talents of all qualified workers, regardless of their background,” clarifying that it is still legal for “employers to implement diversity, equity, inclusion, and accessibility programs that seek to ensure workers of all backgrounds are afforded equal opportunity in the workplace.”
Still, legal threats from right-wing organizations that have already spent years trying to get organizations, including Starbucks and McDonald’s, to end their DEI programs could increase.
The Supreme Court’s decision to ban race-conscious measures in college admissions is likely to encourage more lawsuits against race-conscious policies in employment, said Pauline Kim, an employment law expert at the Washington University in St. Louis School of Law.”
“For existing operators, they find that automation had real costs. Operators in a city that transitioned to mechanical switching were substantially less likely to have any job 10 years later than operators in cities that were slower to automate; those that did find work tended to find worse, lower-paying jobs.
But Feigenbaum and Gross also examine the results for young white women coming of age during automation, who just a few years earlier would’ve been ideal candidates for telephone operator jobs. Remarkably, they find little or no negative effects at all: they were just as likely to find work as they would have been before, and job openings in fields like secretarial work and restaurants increased even as telephone operation was automated away. Some of those jobs (like restaurant work) paid less, but others were competitive with telephone operation.
This is just one case, and economists have a long way to go in understanding how automation affects workers — a question that is more important than ever with the rapid progress in AI. But telephone operation appears like a mostly heartening example. Even though a job that once employed 2 percent of all working women was automated away, new workers entering the labor market were not significantly worse off.”
“The clean energy subsidies that undergird President Joe Biden’s climate agenda have just prompted one Norwegian manufacturer to choose Michigan, not Europe, as the site of a nearly $500 million factory that will produce the equipment needed to extract hydrogen from water. And other European-based companies are being tempted to follow suit, people involved in the continent’s hydrogen efforts say — making the universe’s most abundant substance the latest focus of the transatlantic trade battle on green energy.
The Norwegian firm, Nel, announced its decision in May, nine months after Congress approved Biden’s flagship climate law, the Inflation Reduction Act. The move takes 500 new jobs to the other side of the Atlantic, despite the European Union’s efforts to position itself as the obvious place for clean tech investment.”