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

#71

Post by d0lph » Fri, Apr 06, 2018, 5:55 PM UTC

andrewla wrote: post #56

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 think this might be a misplaced assumption. Historically I think it has turned out that machines/computers are really good at jobs that people think are hard, but really bad at jobs that people think are easy. Machines are great at doing precision machining, which is hard for humans. But they're terrible at walking, which most people can do without difficulty.

Right, but surely you don't believe that robotics is stuck where it is, we haven't quite figured out everything, but it's still a new field.

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

#72

Post by aylmao » Fri, Apr 06, 2018, 5:55 PM UTC

sp332 wrote: post #11

grecy wrote: post #7

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.

It's not a _complete_ explanation, but I agree with @grecy and have to expand on your response.

> the workers have a drive for increasing profits too

Whereas companies tend to have increasing profits as their only and primary goal, for workers it is not their only drive or the only factor they need to consider. If jobs leave my city, I can't just pack up and follow them; I need to think about my family, my kids, their school, their friends, my house, etc.

Companies are much more flexible because as entities they don't have the same moral obligation people have towards other people and themselves.

This is especially true for big companies. The bigger the company gets the more impersonal it becomes, and the more leverage it has because individual employees contribute less and they can invest more resources into hiring.

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

#73

Post by d0lph » Fri, Apr 06, 2018, 5:56 PM UTC

occamrazor wrote: post #29

matchagaucho wrote: post #22

Earlier quoted context omitted.

It'll always be cheaper to pay minimum wage to mop floors vs a $250,000+ "AI Mopping Machine" that requires a $55hr Tech to maintain.

True, until the AI mopping machine is 500$ and it us cheaper to throw it away and replace it when breaks.

It's like every time something new is created, everyone gasps at how expensive it is. Surprise, new technology costs more. I bet cars were prohibitively expensive when the first came out, but now you can get a used one for very cheap.

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

#74

Post by brightball » Fri, Apr 06, 2018, 5:59 PM UTC

randomdata wrote: post #64

> Supply-and-demand theory once made sense. That was before employers gained so much power. Except power itself is determined by supply and demand. Employers have gained more power precisely because of the increased labor supply (more women, more robots, more foreign workers) that is also responsible for stagnant wages. The power, of course, comes from the need for others to have association with that person/business…

Exactly. The article implies that bargaining position is the deciding factor here. Bargaining position is ENTIRELY defined by economics.

How many options does the company have to fill the role you are applying for? How many jobs do you have the ability to fill? What is the compensation level for those jobs?

In a pool of workers, on a sheer measurable and presentable skill set...do you stand out? Networking, creates a connection that helps you stand out so when a company is taking job applicants they have a supply of people who stand out and a supply of "general workforce". Standing out can just mean an existing relationship, a recommendation from a trusted person, or some other type of quality that makes you a preferred candidate. There is a more limited supply of "preferred" candidates and those folks will be more aggressively sought after (and compensated). We'd like for it to be all about skill, but businesses are run by people and many people place a high value on trust.

When it comes to the more general pool of candidates, that pool is a whole lot bigger and if you haven't worked your way into the preferred group for the company then you do have very little bargaining power...meaning there is an ample supply of people who can fill the role.

This article, despite the title...doesn't actually do anything to change the reality any more than publishing an article titled "2 + 2 is not actually 4" disproves it. The content has to prove the headline...and it doesn't.

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

#75

Post by cimmanom » Fri, Apr 06, 2018, 6:01 PM UTC

crabasa wrote: post #62

prolikewhoa wrote: post #50

Earlier quoted context omitted.

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,…

I did read the article, but I see how the LinkedIn comment is causing you to think of white collar executives. The fact is that informal forms of networking are how people of all cultures and income levels have always advanced their mutual interests. One of the most effective ways to combat modern poverty is to provide people with mobile devices that enable them to better communicate and build relationships over time…

Networking may help the individual get a better job (usually at the expense of someone else getting that job), but it doesn't fix anything about the larger problem, which is the failure of wages to keep up with the cost of living or respond to demand for labor.

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

#76

Post by andy_ppp » Fri, Apr 06, 2018, 6:01 PM UTC

gowld wrote: post #39

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.

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.

I don't understand this and your maths is wrong - it would be 15%? But also the $100 per hour job will just get more complex in a different way and will still take the same hours per day, at possibly some higher efficiency of output.

It's like saying because React has made people more efficient at building bug free user interfaces that we can all relax in our jobs as there is no IE6 to support. Instead we all know that the UI has just got more complex, interactive and shiny.

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

#77

Post by bbimbop » Fri, Apr 06, 2018, 6:02 PM UTC

Of course. The fact that wages are suppressed is known and expected. The author fails to mention the theory of sticky wages. Why? The author is making a political statement about wage policy. In doing so lets you assume that wages should be related to supply and demand, but they are not. Wage levels are sticky and lag behind changes in the supply and demand for labor. Good news is that you can expect wages to increase in the relatively short-run, from which it seems the author (and most everyone) would benefit.

https://www.investopedia.com/terms/s/sticky-wage-theory.asp

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

#78

Post by aylmao » Fri, Apr 06, 2018, 6:03 PM UTC

pedro_hab wrote: post #61

This is an interesting topic, but it is sad to see how people react to it. A lot of comments here saying the whole system is broken. An average poor man in the US probably lives better than kings lived in the past. Food, water, food, hospitals, AC, heaters and such. These evil employers/entrepreneurs are the one creating it. Life by every metric is getting better, can it be better? Maybe. Now we could discuss how to…

> An average poor man in the US probably lives better than kings lived in the past.

IMO very far from truth.

An average poor man today _has more valuable stuff_ than a king in the past, but this doesn't translate into _living better_ because having a smartphone wont save me from the stress of disliking my boss, having cheap access to varied foods doesn't necessarily mean I have more significant relationships, the fact hospitals exist doesn't mean I can afford getting sick any more than a king, and nothing really changes the fact that I'm still poor relative to the people of today, which matters.

That being said, if we compare poverty today to poverty in the past, things are perhaps better now, sure.

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

#79

Post by readams » Fri, Apr 06, 2018, 6:03 PM UTC

adventured wrote: post #46

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.

You've confused mean and median there, but the point I was making is that a $15 minimum in Santa Clara county, with a median wage of $29.20 will have a far different impact than in Fresno with a median wage of $16.10. And that's just in California.

This about the impact of a minimum that affects nearly HALF of all workers in an area. It's absurd to think that this will not cause serious disemployment effects.

(Nationally, median hourly wage is $18.12)

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

#80

Post by toomuchtodo » Fri, Apr 06, 2018, 6:06 PM UTC

comstar wrote: post #57

toomuchtodo wrote: post #20

Earlier quoted context omitted.

> 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 accounti…

Not to discredit anything you've said, as on the whole I agree with you. But movie tickets are nearly twice as expensive in Australia. [0] [1] And a popular videogame can be wildly more expensive. MLB The Show 2018 for instance is $60 in the US and $100 in AU. These prices are outside that which is explained by the current exchange rate. Yes, you are being paid more. The price of living is also drastically higher the…

It should be noted that Australia has a healthcare system substantially more equitable than the US, making the price of discretionary goods and services less of an issue. Real estate, education, and healthcare inflation is a thing (despite the price of TVs and tech coming down year after year) in the US (although I am aware of the steep cost of real estate in AU and NZ due to foreign buyers).

"Australia has a one of the strongest economies in the developed world. It survived the recent recession unscathed and hasn’t had a real recession in 20 years. And as Australian academics have noted, "Australia and New Zealand, with among the highest minimum wages in the world, have both low levels of unemployment and significantly lower levels of low paid employees.

Bankruptcies due to medical costs, which accounted for 60 percent of U.S. bankruptcies before the Affordable Care Act, are completely unknown there."

https://www.usnews.com/opinion/blogs/laura-chapin/2014/12/09...