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The federal Minimum wage in the US is $7.25 per hour. Ten states have higher minimum wages with Rhode Island clocking in 50 cents higher at $7.75.
Costs to the employer are higher of course, even if the employer ducks benefits by using part-time workers.
For starters, employer contributions to Social Security are 6.2% of hourly wages which adds another 45 cents to employer costs. That brings employer costs up to $7.95 per hour minimum, not counting training costs, vacation (if any), sick-time disruptions, and other such costs.
Of course, employers must also factor in the cost of Obamacare.
Small businesses do not have to provide health-care, but under employer responsibility provisions of the affordable care act, businesses that employ more than 50 workers will pay a steep penalty in 2014 if they don't.
Click on the preceding link to see a nice flow chart of the penalty process.
What IF?
What if companies, small or large, did not have to worry about Obamacare? What if they did not have to worry, about training, sick-leave disruptions and weather-related disruptions? What if companies only had to pay $3.00 per hour, rivaling wages in China?
Meet Baxter
Baxter - The Automation Robot
MIT Technology Review discusses Baxter in Small Factories Give Baxter the Robot a Cautious Once-Over.
Chris Budnick, head of Vanguard Plastics, a small injection-molding operation in Southington, Connecticut is considering the use of Baxter for one process that is not yet automated: stacking and packing textured, plastic cups, which Vanguard sells for 2 cents apiece to a medical company.
It currently costs Budnick $9.00 an hour to have a staffer from a temporary agency to do the job.
Budnick is now considering Baxter to replace that agency job.
Let's tune in to the MIT story for additional details about Baxter and the job Baxter will replace.
Baxter was conceived by Rodney Brooks, the Australian roboticist and artificial-intelligence expert who left MIT to build a $22,000 humanoid robot that can easily be programmed to do simple jobs that have never been automated before.
Brooks’s company, Rethink Robotics, says the robot will spark a “renaissance” in American manufacturing by helping small companies compete against low-wage offshore labor. Baxter will do that by accelerating a trend of factory efficiency that’s eliminated more jobs in the U.S. than overseas competition has. Of the approximately 5.8 million manufacturing jobs the U.S. lost between 2000 and 2010, according to McKinsey Global Institute, two-thirds were lost because of higher productivity and only 20 percent moved to places like China, Mexico, or Thailand.
The ultimate goal is for robots like Baxter to take over more complex tasks, such as fitting together parts on an electronics assembly line. “A couple more ticks of Moore’s Law and you’ve got automation that works more cheaply than Chinese labor does,” Andrew McAfee, an MIT researcher, predicted last year at a conference in Tucson, Arizona, where Baxter was discussed.
Baxter comes with two arms, a vision system, and 360° sonar (which it uses to detect people nearby), but for the cup-stacking job it will also need a specially designed gripper, which Rethink is now developing. Rethink is also developing software so that the robot can communicate with other machines, such as a conveyor belt, telling it to move forward or stop.
So how important will Baxter really be to Vanguard? Budnick couches his answer in baseball terminology. “Baxter is a potential double,” he says. “Maybe a home run if it can use both its arms.”
60 Minutes Discusses Baxter
Inquiring minds are listening to a 13 minute video on 60 Minutes that discusses "The Age of Robots", and Baxter.
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