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Editorial: ND minimum wage proposal is a bad idea

Those who are advocating that North Dakota adopt a mandatory minimum wage of $15 per hour should pay attention to Flippy, the burger-flipping robot that made its debut recently at a California fast-food restaurant. Flippy is a six-axis robotic arm designed to take orders via a digital ticketing system, then flip burger patties and remove them from the grill when done. The robot is intended to work alongside humans, who still are required to guide placement of the patties on the grill. The fast-food industry is eager to automate part of its cooking. A robot can't be injured, and doesn't need health insurance and other costly benefits.

Flippy is simply one of the latest examples of how automation is increasingly taking over what workers have traditionally done—a longstanding trend that will only be exacerbated by attempts to have the government artificially boost labor costs through a sharply increased minimum wage. Already, restaurant diners are getting accustomed to placing orders electronically. At stores, shoppers increasingly are given the option going through an automated checkout lane. You can expect to see a lot more of those kinds of labor substitutions if the Fair Wage Act, whose backers need 13,452 signatures to place on the November ballot, passes.

If passed, the act would raise the hourly minimum wage, now $7.25, to $9.83 on July 24, 2019. A year later, the hourly minimum wage would rise to $12.41, and on Jan. 1, 2021, rise to $15. How did the proponents come up with the arbitrary numbers and timetable? What analysis have they done to establish the justification for those pay levels? Even if they could work in Fargo—a proposition we don't buy—how in the world would they work in Finley or Fessenden? What evidence is there that small businesses could afford such a steep and rapid increase in the cost of labor? What effect would an artificial spike in labor costs have on consumer prices?

Minneapolis is one of a growing number of cities to embrace new, higher minimum wage ordinances. In Minneapolis—a large city with higher labor costs—the increase in the minimum wage would be more gradual than the measure being proposed in North Dakota. The Minneapolis ordinance sets a $10-an-hour minimum wage for large businesses with more than 100 employees, rising to $15 an hour in 2022.

In many areas, including Fargo, the market wage already is well above the minimum wage. Many low-skill service jobs, including motel workers and fast food employees, earn around $10 an hour, for instance. As Flippy shows, unskilled workers are the most likely to be hurt by a minimum wage. If the proposal makes it to the November ballot, North Dakota voters should reject the nicely named but poorly conceived Fair Wage Act.

Editorials represent the views of Forum management and the Editorial Board.