By: Anthony Galli
There is a lot of disagreement over how a federal minimum wage of $15 an hour would impact the economy. In regards to the fast-food employees’ “Fight for $15,” many commentators argue that such a drastic increase in wages would frustrate profit margins and force restaurants to fire employees and/or raise prices too high.[i] Others argue that higher wages will have no affect on prices because production costs, mainly labor costs, do not control prices, but rather competition, supply, and demand control prices.[ii] Moreover, others foresee the wage battle as the catalyst for the automation of certain industries.[iii] Nonetheless, the current wage debate is a convenient time to re-think the role of labor in the Information Age. Assuming that new information technologies will substantially disrupt employment, how will the Department of Labor handle the mass dislocation of employees?
In a Wall Street Journal interview about how new technologies are making the world better, entrepreneur Peter Diamandis said, “[j]obs are going from China to India to robots.”[iv] Before his prediction is dismissed as too unrealistic or futuristic, consider one McDonald’s restaurant which began testing automated cashiers in August of 2014.[v] If McDonald’s wants to replace the majority of their employees with automated technologies, does the law inhibit them from doing so? The short answer is, probably not. [vi]
In the Eleventh Circuit, a 59 year-old product developer sued his employer for age discrimination, alleging that his employer fired him in order to replace him with a younger employee.[vii] However, the Court determined that he did not state a prima facie case for age discrimination because he was not replaced by a younger individual, but rather by a computer program. Robots and information technologies are already replacing employees, and some economists have estimated that “…forty-seven percent of the workforce will be automated within the next twenty years including jobs in transportation, logistics, production labor, administrative support, sales, services, and construction.”[viii] The Department of Labor will have to adapt to the displacement of labor. The lessons learned during the Industrial Revolution can serve as a guide when formulating new labor policies for the Information Revolution.[ix]
The shift from an artisanal to an industrial economy in the early twentieth century resulted in an industrialist interpretation of the National Labor Relations Act.[x] As a result the NLRA’s definition of “employee,” “employer,” and “appropriate bargaining unit” needed to be interpreted in light of industrial production. Similarly, the NLRA must be reinterpreted, amended, and built upon in light of the change in demand for labor in the Information Age.[xi] While redefining and modifying existing law might help to ease us into a new age of production, the Information Age may demand entirely new laws and policies to deal with the mass dislocation of employees due to information technologies replacing them. What new legislation or agencies might be needed in order to deal with the obsolescence of labor in certain industries?
I would suggest hybrid policies that combine the spirit of the Worker Adjustment and Retraining Act (“WARN”) and the NLRA, which might alleviate the economic stress that mass employee displacement is expected to have on the national economy.[xii] WARN requires employers to give employees sufficient notice before mass layoffs or plant closings, and the essence of the NLRA demands that employee needs be heard and fairly bargained for. Combining the spirit of these laws could help deal with mass employee dislocation while re-integrating employees into different industries. The National Labor Replacement Board would oversee certain industries with companies that wish to replace employees with technologies. The Board would require these companies to switch over to non-human labor in gradual stages while simultaneously re-training and placing the to-be displaced employees in different industries that need human labor.
[i] James Sherk, Higher Fast-Food Wages: Higher Fast-Food Prices, The Heritage Foundation (Sep. 4, 2014).
[ii] Tim Worstall, The Real Change In The Cost of A Big Mac If McDonald’s Workers Were Paid $15 An Hour: Nothing, Forbes (Aug. 2, 2013).
[iii] Jan Omega, McDonald’s Counters with Minimum Wage Hike To $15 By Flirting With Automation, Inquisitr (Nov. 8, 2014).
[iv] Steve Rosenbush, Peter Diamandis Says Eight Technologies Are Making the World Better, The Wall Street Journal (Jan. 15, 2013 1:47 AM).
[v] Robert Laurie, McDonald’s Testing Automated Cashiers… That Won’t Demand $15 per Hour, Herman Cain (Aug. 14, 2014).
[vi] Being Replaced by a Computer Program (Even a Brand-New One) Isn’t Age Discrimnation.
[vii] Gortemoller v. International Furniture Marketing, Inc., 434 Fed. Appx. 861, (11th Cir. 2011).
[viii] Evan Dashevsky, 20 Jobs Likely to Be Replaced by Robots (and 20 That Are Safe), Pcmag (June 30, 2014).
[ix] Kenneth G. Dau-Schmidt. Labor Law 2.0: The Impact of New Information Technology on the Employment Relationship and the Relevance of the NLRA. 64 Emory L.J. 1583, 1585 (2015).
[x] Id. at 1588.
[xi] Id. at 1592.
[xii] Compare National Labor Relations Act, 29 U.S.C.A. §§141-187 (2015), with Worker Adjustment and Retraining Notification Act, 29 U.S.C.A. §§ 2101-2109 (2015).