That's because depressed wages are caused by the drive for ever increasing profits.
Yes but the workers have a drive for increasing profits too, and there are more of them. So that's not really a good explanation.
Supply and Demand Does a Poor Job of Explaining Depressed Wages
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Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#12It should be pointed out that studies of small increases of minimum wage that show modest harm do not immediately tell us that huge increases of minimum wage will not cause greater harm. Remember that $15/hour is more than the median wage in much of the country.
I'm largely in favor of a $15 minimum wage, but I agree that if we were going to do this on a national level as opposed to local it would be prudent to phase it in over time so that there is time for pulling back if trouble beings to emerge.
How do you decide what the appropriate level is, gut feeling? I'm afraid that debates over what the number should be obscures debate over the harder question of what is causing the minimum wage to have to keep increasing.
The question we should be asking is why are we devaluing the completed labor of the lowest wage classes?
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#13tl;dr Depressed wages are better explained by employers' ever more powerful bargaining position
....which is dictated my the supply of employers thanks for the tldr.
Except it isn’t, it because of the way labor and employers have different costs when an employee leaves, meaning each side has a different equation for how important it is to not sever the employment arrangement.
If an employee loses their job, they lose 100% of their income, and for many they are unable to survive this. If an employer loses an employee, they only lose 1/n of their production, where n is the number of employees they have. They can handle that reduction while they look for a new employee way more than the employee can.
That is what prevents the market from being efficient.
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#14Introducing any very significant productivity increasing tools seems to result in depressed wages. It happened when we moved to factory production, resulting in entire families working 16 hour days 6 days a week to barely earn a subsistence living. And it's happening with computers.
When your employees produce 8% more each year, it's easy to justify giving them 5% raises. What happens when your employees produce 80% more every year? You can't stomach the idea of giving them raises commensurate with that, so you just tell yourself 'its the machine doing the real work, they don't deserve anything' and raises stop.
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#15tl;dr Depressed wages are better explained by employers' ever more powerful bargaining position
....which is dictated my the supply of employers thanks for the tldr.
That's only part of the equation. Survival often necessitates taking a sub-optimal deal. Employees are very more likely to be forced into this position than an employer, who can often survive with reduced staff.
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#16That's because depressed wages are caused by the drive for ever increasing profits.
Yes but the workers have a drive for increasing profits too, and there are more of them. So that's not really a good explanation.
Workers have less power to increase wages than corporations have to increase revenue and profits.
This has occurred, arguably, because of right to work laws and the reduction in organized labor (which previously negotiated wages with more power).
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#17That's because depressed wages are caused by the drive for ever increasing profits.
Yes but the workers have a drive for increasing profits too, and there are more of them. So that's not really a good explanation.
This is where an understanding of power structures and hierarchies helps.
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#18Is it possible that low skill jobs are simply less valuable to the economy than before?
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#19Earlier quoted context omitted.
I'm largely in favor of a $15 minimum wage, but I agree that if we were going to do this on a national level as opposed to local it would be prudent to phase it in over time so that there is time for pulling back if trouble beings to emerge.
How do you decide what the appropriate level is, gut feeling? I'm afraid that debates over what the number should be obscures debate over the harder question of what is causing the minimum wage to have to keep increasing. The question we should be asking is why are we devaluing the completed labor of the lowest wage classes?
We 'must' decouple compensation from the actual value being created by workers because workers are far too productive with modern technology. If compensation was related in any way, even a very small way, to value of the work being done, wages would raise so fast that there would be enough jobs for everyone, people would work less and all those promises of the wonderful future technology would bring would actually happen. And that is unconscionable.
Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages
#20It should be pointed out that studies of small increases of minimum wage that show modest harm do not immediately tell us that huge increases of minimum wage will not cause greater harm. Remember that $15/hour is more than the median wage in much of the country.
These jobs that are worth less than $15 per hour are going to be the first to be replaced by machines so whatever happens we need a solution to give people at the bottom high(er) quality lives.
> we need a solution to give people at the bottom high(er) quality lives.
Training and safety nets, funded through tax revenues.
Keep in mind, the national minimum wage in Australia is currently $18.29. The entire US has been getting a discount on minimum wage labor for decades, and everyone is kicking and screaming now that those workers are having their wages ratcheted up to what they should be making when accounting for inflation [1] [2].
[1] http://www.pewresearch.org/fact-tank/2017/01/04/5-facts-abou...
[2] https://www.cnbc.com/2016/07/21/adjusted-for-inflation-the-f...