Experience Stern | Faculty & Research

Overview: In “Minimum Wages and the Rise of the Robots,” NYU Stern Professor Robert Seamans and coauthors Erik Brynjolfsson (Stanford University and National Bureau of Economic Research), J. Frank Li (University of British Columbia), Javier Miranda (Halle Institute of Economic Research), and Andrew J. Wang (Stanford University) examine how minimum wage increases influence firms’ decisions to adopt industrial robots. Drawing on novel plant-level data on robot imports linked to U.S. Census data from 1992 to 2021, the researchers provide new evidence on how wage policy shapes technology investment.

Why Study This Now: Debates over the minimum wage often focus on immediate effects on pay and employment. At the same time, advances in automation are transforming manufacturing and reshaping labor demand. As more states raise wage floors, an urgent question emerges: Do higher labor costs accelerate firms’ adoption of automation technologies? Understanding this dynamic is critical for policymakers seeking to balance worker protections with long-term economic resilience.

What the Researchers Found: By comparing similar manufacturing plants located on opposite sides of state borders, where minimum wages differ, the authors are able to pinpoint how minimum wage increases influence decisions to adopt automation. Using multiple approaches to analyze the data, the researchers find the same pattern: a 10 percent increase in the minimum wage increases the likelihood of robot adoption by about 8 percent. In other words, when labor becomes more expensive, firms are more likely to invest in automation technologies.

What Does This Change: The findings suggest that minimum wage policy does more than affect short-term earnings; it can alter firms’ long-run capital investment strategies. If higher wage floors accelerate robot adoption, the structure of manufacturing employment may evolve more quickly than policymakers anticipate.

Key Insight: “Our research does not imply that minimum wages are inherently harmful,” explains Seamans. “Rather, it highlights the importance of complementary policies – such as worker retraining, skill development, and transition supports – that help workers adapt as firms modernize.”