How to get paid $28/hour for delivering pizzas

You can earn a higher salary than the average college graduate by delivering pizzas.

Just move to Stanley, North Dakota and reply to this Craigslist ad:

Then hope Jimmy’s hires you.

If you don’t get the job, all is not lost. Plenty of businesses in northwestern North Dakota are offering lucrative pay. Even notoriously stingy Walmart is starting new hires at $17 an hour:

Why are these businesses so eager to hire? Because business is booming. And business is booming because they’re near the Bakken, which is at the heart of America’s energy resurgence.

It’s good old-fashioned economic stimulus. Oil companies, sensing an opportunity to profit, are luring workers to North Dakota by paying them top dollar. These workers then eat pizza and shop at Walmart. The result is a booming local economy.

Notice what is not part of this equation: the government.

Contrast North Dakota to the growing list of US cities that are attempting to force wages higher via minimum-wage increases. Seattle passed a minimum-wage increase to $15/hour. San Diego hiked its minimum wage to $11.50/hour. Washington DC’s minimum is rising to $11.50/hour, too.

Chicago mayor Rahm Emmanuel wants his city to adopt a $13 minimum wage. Activists in Los Angeles are now calling for a $15 minimum.

I could keep going, but you get the picture.

There’s all the difference in the world between wages rising because of increased production and a government forcing wages higher by edict. The former is good for everyone. Even though $56K/year plus generous benefits seems expensive for a deliveryman, Jimmy’s is happy to pay it, because the company expects to turn a profit.

But when a government outlaws jobs below a certain wage, only a lucky few win. Doug French will elaborate on that point in a minute. First, let’s take a quick look at where this trend is headed.
Not only do 63% of Americans favor raising the federal minimum wage to $10.10, Obama already raised it to $10.10 for a lucky subset of Americans. Yes, Congress is deadlocked on whether to raise the minimum wage, but that’s never stopped Barack before. With a stroke of the pen, he issued an executive order raising the minimum for federal contractors to $10.10 beginning in 2015.

It’s clear that the federal minimum wage is headed higher. What’s less obvious but equally important is that another, separate increase in the cost of employment is also coming.

Remember the “or else” provisions of Obamacare that threaten most employers to either provide health care to their employees or pay a penalty? They kick in by 2016, and they’ll add at least another $1.05/hour to an employer’s cost of hiring an employee.

Put it all together, and the minimum cost to hire a worker is likely to jump at least 50% soon, as illustrated by this chart I snagged from the most recent edition of The Casey Report:

The coming “all in” minimum wage of $12.17/hr equates to about $30,000 per year.

Which prompts the question: What’s going to happen to the roughly 70 million jobs in America that cost employers less than $30,000 per year?

The answer: they’ll disappear. As I mentioned last week, French McDonald’s workers know this all too well. To combat rising labor costs, McDonald’s has been installing kiosks to replace some of its French employees. France’s minimum wage is about $12.12/hour.

This trend—the automation of low-skill human labor—is just getting started in America, but it will soon kick into overdrive. As the cost of low-skill human labor becomes prohibitive, businesses will search for mechanized substitutes.

If you’ve eaten at TGI Friday’s, used the self-checkout machines at Walmart, or printed a boarding pass at the airport in the last 10 years, you’ve used this company’s labor-saving products. Click here to subscribe to The Casey Reportto ride this secular trend with us. Labor-saving automation is the trend of the future, and now’s the time to get positioned.

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