Supply and Demand Does a Poor Job of Explaining Depressed Wages • Hacker News Board

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#31

Post by js8 » Fri, Apr 06, 2018, 5:25 PM UTC

Supply and demand does a poor job at explaining anything. The price changed.. why? Was it because it moved toward an equilibrium, from the equilibrium, has the demand curve shifted, has the supply curve shifted?

The problems of general equilibrium approach are quite succinctly described in Keen: Debunking Economics. And compared to approach in Blatt: Dynamic Economic Systems, it's a disaster - too many parameters and assumptions for too little explaining power. It was a pretty decent way to describe the world when Walras came up with it; but it should have been obsoleted years ago.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#32

Post by gowld » Fri, Apr 06, 2018, 5:25 PM UTC

CryoLogic wrote: post #18

Is it possible that low skill jobs are simply less valuable to the economy than before?

"Less valuable" is not a relevant concept when discussing the distribution of profits of the overall business. If the overall business is profitable, obviously the business could afford to pay workers more.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#33

Post by toomuchtodo » Fri, Apr 06, 2018, 5:25 PM UTC

aantix wrote: post #28

toomuchtodo wrote: post #16

Earlier quoted context omitted.

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).

Is that true? A corporation that relies on 50,000+ employees to deliver a service or product, and those employees collectively stop working?

I don't entirely grok your question, but it sometimes does take walkouts to exert force to obtain wage concessions (teacher strikes, pilot strikes, etc).

Teachers striking in several states are exerting enough force to obtain meaningful wage increases.

http://nymag.com/daily/intelligencer/2018/04/the-teachers-st...

https://www.wsj.com/articles/why-teachers-strikes-are-becomi...

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#34

Post by Florin_Andrei » Fri, Apr 06, 2018, 5:26 PM UTC

coldtea wrote: post #10

The world is not driven by economics (and its simplistic assumptions), it's driven by power relations and human nature. Supply and demand is not the only thing to influence the job market -- power and knowledge asymmetries can do the same thing just as well.

Well, it's driven by the laws of this universe, ultimately. At the level of inanimate matter, that's thermodynamics and such. At our level, it's meta stuff like evolutionary processes.

There's power in there, for sure. There's instinct and emotion, too. There's thinking and reason also. It's an all of the above type of thing. But we tend to stick to the things that are most obvious to us individually.

The universe is a giant computer on a path to compute some kind of humongous outcome. We're just execution units carrying out subroutines. We may or may not have some freedom locally (that's another debate).

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#35

Post by mar77i » Fri, Apr 06, 2018, 5:26 PM UTC

CryoLogic wrote: post #18

Is it possible that low skill jobs are simply less valuable to the economy than before?

It is possible that low skill jobs are simply less valued to the economy. Because life must be made hard for those down, so it can be made easy for... urm... those who already have enough.

Point in case shows once more that that isn't even true.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#36

Post by trophycase » Fri, Apr 06, 2018, 5:27 PM UTC

andy_ppp wrote: post #8

readams wrote: post #5

It 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.

China has people sweeping the streets. Considering how dirty some cities are and how much trash can be found everywhere this isn't a totally unreasonable idea

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#37

Post by maxxxxx » Fri, Apr 06, 2018, 5:27 PM UTC

coldtea wrote: post #10

The world is not driven by economics (and its simplistic assumptions), it's driven by power relations and human nature. Supply and demand is not the only thing to influence the job market -- power and knowledge asymmetries can do the same thing just as well.

Exactly. Economics is not natural law but it operates in a framework that's completely human made. This framework is defined by moral values, practicality, whoever is in power and a lot of other factors.

We could easily have an economy where we just accept that nobody can own land or it's OK to take things by force. then economists would build their models around that framework.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#38

Post by crabasa » Fri, Apr 06, 2018, 5:27 PM UTC

One thing worth noting is that one of the clearest paths to earning higher wages and being more successful in a career lies in networking and learning how to leverage that network. In theory, the dominant tool for this should be LinkedIn.

But LinkedIn decided early on that serving professionals was less lucrative than serving companies. So the vast majority of products and capabilities that LinkedIn has shipped over the years has been to serve the needs and interests of companies. Sometimes at the expense of professionals (InMail spam).

There really isn't a tool out there that workers can use that addresses the power and knowledge asymmetries that exist today.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#39

Post by gowld » Fri, Apr 06, 2018, 5:28 PM UTC

andy_ppp wrote: post #8

readams wrote: post #5

It 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.

That's not obviously true, and not theoretically well justified. It depends on total workforce size and difficulty of optimizing. Wholly eliminating a $15/hr job is just about as valuable as eliminating 30% of the hours needed at a $100/hr job.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#40

Post by Florin_Andrei » Fri, Apr 06, 2018, 5:28 PM UTC

randyrand wrote: post #4

howard941 wrote: post #2

tl;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 very naive and narrow.

The power of monopolies is actually inversely proportional to the "supply" of such entities.