The state’s new minimum wage law, signed into law Monday by Gov. Jerry Brown, is expected to give a boost to Silicon Valley’s burgeoning robot and automation industry as businesses seek to replace increasingly expensive workers.
With wages rising and technology advancing and becoming cheaper, agriculture, restaurants and hotels are expected to turn more to automation. It’s an unintended consequence of a law designed to improve the lives of lower-paid workers struggling in pricey California.
“The higher the compensation, the greater the incentive to replace labor with capital. The other thing to figure in here is the declining cost of automation,” said Mark Muro, a senior fellow at the Brookings Institution, a Washington, D.C., think tank. “Likely there will be some greater demand for automation, but meanwhile, others will likely find other solutions using the people they have.”
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