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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

#41

Post by gowld »

megaman22 wrote: post #27
andy_ppp wrote: post #8

Earlier quoted context omitted.

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.

I would predict that there is a lot of work that would otherwise be done, if minimum wage was lower, that simply will not be done at all. Or it'll be done under the table.

That's probably true; downvotes are inappropriate. On the other hand, there is also a lot of work that would be done if the economy gets more aggregate demand from low-wage workers.

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

#42

Post by andrewla »

crabasa wrote: post #38

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…

I feel comfortable saying, without evidence, that LinkedIn is unlikely to be useful for workers living at the border of the minimum wage, or in general workers who would be likely to be affected directly by a change in the minimum wage.

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

#43

Post by coldtea »

gowld wrote: post #26
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.

What is the difference between economics and power relations? Human nature I understand -- people have mental/emotional shortcuts that are not precise and accurate rational analysis.

>What is the difference between economics and power relations?

In an ideal world, economics would study power relations as they relate to money -- that's what the old economists (19th century and so) called "political economy".

In the present world, economics are a shallow ideology around the "free market", with naive abstractions and axioms. Usually these are mostly peddled by the media and "popularizer" economists at the masses, but what actual academic economists sell is not that much better.

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

#44

Post by crabasa »

andrewla wrote: post #42
crabasa wrote: post #38

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…

I feel comfortable saying, without evidence, that LinkedIn is unlikely to be useful for workers living at the border of the minimum wage, or in general workers who would be likely to be affected directly by a change in the minimum wage.

I agree with you about the current iteration of LinkedIn. But that doesn't mean a different kind of product, focused on professional development, career management and networking couldn't be useful for folks.

I imagine that many people simply leverage Facebook, Twitter and other social networks for this today, in the absence of something for purpose-built.

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

#45

Post by andrewla »

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.

I think this is getting into map vs. territory issues. This is certainly the domain of economics -- the particular simplifying model used by many economists does not appear to paint a complete picture.

By analogy, adapting a James Morrow quote: "Economics does have all the answers. The problem is that we don’t have all the economics".

Power and knowledge asymmetries are well within the domain that economics tries to encompass.

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

#46

Post by adventured »

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.

The overall median wage is misleading.

The median full-time wage is $50,000 per year. That's closer to $25 per hour.

If you include an 18 or 70 year old working a part-time job, you'll dramatically reduce that median income and present a false picture of true labor earning potential.

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

#47

Post by js8 »

cortesoft wrote: post #13
randyrand wrote: post #4

Earlier quoted context omitted.

....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 o…

> That is what prevents the market from being efficient

The problem is, nobody really wants labor markets to be efficient. Efficient labor markets mean that we would pay workers the subsistence wages, because, why they should be paid more?

That's the thing, labor is not like other commodities, say apples or computers. You want to make the price of other commodities to be as low as possible, and everybody (all humans in society) wins. But for price of labor this is not true.

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

#48

Post by TheAdamAndChe »

crabasa wrote: post #38

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…

I'm terrible at networking, and I feel it is the largest factor holding me back in my career. I have been coding off and on since I was 14, have a bachelors degree in IT, and have a year and a half of tech support experience, yet can't for the life of me get a job that pays over $25k.

Do you have any advice on how to get started networking? What do you feel most people bad at it lack?

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

#49

Post by crdoconnor »

dnautics wrote: post #12
drabiega wrote: post #9

Earlier 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?

>How do you decide what the appropriate level is, gut feeling?

I would keep raising it incrementally until inflation hits around 4-5%.

This is probably the simplest, most effective way of solving the income inequality problem. Minimum wage hikes cut in to the bottom line first and prices second. There's a lot of profit at the top that an just be redirected to the bottom by increasing the minimum wage - barely even affecting the middle classes.

>why are we devaluing the completed labor of the lowest wage classes?

So the value of their labor above and beyond which they are compensated for can be extracted and redistributed - mostly in the form of profits.

This is done via outsourcing (lowering the demand for domestic labor), austerity (e.g. leaving portland's pothole fixing to the anarchists) and slashing benefits like SNAP/ unemployment (lowering the negotiating leverage of workers).

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

#50

Post by prolikewhoa »

crabasa wrote: post #38

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…

I don't think you read the article at all. This has nothing to do about LinkedIn or networking. You have to be seriously deluded to think that LinkedIn or any other social media company, as well as general networking is the way to defeat our massive levels of income inequality. You're essentially telling bootless people to pull up their bootstraps by making friends with executives and managers. It's not that simple, and condensing the problem into what you're talking about is ignorant at best.
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