In recent years, several cities and states in the U.S. have passed laws to significantly increase their minimum wage to as much as $15 per hour. With many warehouse workers making less than that, opponents say the wage increase will greatly impact the financial health of many companies. Proponents argue the current minimum wage is too low to allow workers to make ends meet. Regardless of what side you’re on, what happens when more states look to raise the minimum wage to this level?
If the minimum wage increases, companies must navigate new hurdles. Before making radical changes like laying off employees or even closing shop, let’s look at other options, including:
- Raising the prices of goods sold
- Cutting profits to pay for the increased payroll
- Moving to avoid the increase
- Increasing operational efficiencies
Companies may pass on their increased labor costs on to consumers, but that’s not easy in this competitive world. You can reduce employee count, but that assumes you didn’t need them to begin with. The final option is to move to a state that has a lower minimum wage, but that usually too expensive and disruptive. So, before you gamble on any of these options, consider improving operational efficiencies.
Get in Front of the Inevitable
Improving efficiencies in your warehouse or manufacturing facility are always beneficial. Implementing technology and automation requires an upfront investment but the productivity gains and ROI are often compelling and, at a minimum, worth investigating. By automating physically challenging tasks or repetitive assembly/ end of line activities more suitable for machines, direct labor can be reduced and high quality displaced workers can be redeployed to other areas of the business, learn new skills and become more valuable.
Using robots, for example, reduces the cycle time for an operation, maximizes throughput, increases accuracy and equates to fewer risks of injury. Despite arguments that robots are taking jobs away from workers, many industrial robots are integrated into a series of operations requiring human expertise. Ideally, employees can coexist with robots by managing machines, processes and data- thereby making their jobs safer and increasing their personal job satisfaction. People are best suited to think; machines to conduct challenging or repetitive tasks.
If robots aren’t best suited for your applications, there are plenty of other solutions an experienced systems integrator can review with you, such as:
- Automated Guided Vehicles (AGVs)
- Automated Guided Carts (AGCs)
- Automated Storage and Retrieval (AS/RS)
- Mobile Racking
- Vertical Lift Modules (VLMs)
- Product slotting
If you have raised your workers’ wages or are seriously considering it, how do you plan to offset the increase in labor? Please share your comments below.