Wages are a function of the scarcity of labor. Advances that increase the productivity of workers often also makes it easier to do those jobs, hence a larger labor supply that pushes the price of labor downwards.
If pay had kept pace with productivity gains, minimum wage would be $24 an hour
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Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#32Average annual wages in the United States for was $63,000 for the most recent year available.[1] Average annual hours worked was 1,779 per year.[2] That implies an average wage of $35/hour. [1] https://en.wikipedia.org/wiki/List_of_countries_by_average_w... [2] https://data.oecd.org/emp/hours-worked.htm
As noted in your first link, average wage is misleading because the high end is incomprehensibly large (and is where most growth has taken place) and that skews the result. >The wage distribution is right-skewed; the majority of people earn less than the average wage. For an alternative measure, the median household income uses median instead of average.
Yup, you're right. The real median personal income in the US, today is $35,977 -> https://fred.stlouisfed.org/series/MEPAINUSA672N
Unfortunately I'm having a hard time finding the median number of annual hours worked. But using the average hours worked, that puts the median worker at $20/hr.
Obviously not perfect unless we can get the median hours worked.
Also, like other commenters have said, I don't think anyone has ever claimed that the bulk of productivity gains will go equally to the minimum wage as the median wage, since the latter is usually pretty low leverage work in general.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#33How much would a cheeseburger and a shake cost?
As much as it costs for employees to be paid sufficiently. It seems awfully dangerous to think that we should pay people less because otherwise things would be expensive. This is exactly why/how wealth is moving up and up to a smaller proportion of people at the top
> It seems awfully dangerous to think that we should pay people less because otherwise things would be expensive.
You're assuming that's why I was asking.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#34Wages are a function of the scarcity of labor. Advances that increase the productivity of workers often also makes it easier to do those jobs, hence a larger labor supply that pushes the price of labor downwards.
> Wages are a function of the scarcity of labor
This assumes an unconstrained "market" for the exchange of labor and wages, just as the claim that "prices are a function of the scarcity of goods" assumes an unconstrained "market" for the exchanges of goods and money.
But this is not the only model for economic exchanges of labor, goods and money. The Romans, for example, did not use market pricing, but instead were primarily a "cost-plus" economy (you paid the cost plus a known margin).
I know it is extremely hard when most of us have been embedded in a neoliberal, market-centric culture for our entire lives to think this far outside the box, but there really is no law of nature that says that what I pay you to do work for me must depend on how many other people could do the work.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#35Average annual wages in the United States for was $63,000 for the most recent year available.[1] Average annual hours worked was 1,779 per year.[2] That implies an average wage of $35/hour. [1] https://en.wikipedia.org/wiki/List_of_countries_by_average_w... [2] https://data.oecd.org/emp/hours-worked.htm
"Average" anything in populations with large ranges is a terrible, terrible measure. As the joke goes, Bill Gates walks into a bar, and on average everyone in the bar is a millionaire.
Median is the appropriate statistic for such cases.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#36Earlier quoted context omitted.
> Smart-but-lazy employees are interested in efficiency, and will work uncharacteristically hard in order to achieve it. So if their job could be replaced with simple script....
I have such a long list of things to do that I constantly try to replace them with a simple script. Why would I want to do a job that can be scripted?
Because you enjoy it anyway? Because you believe it brings you closer to god? Because you feel it drives you towards a level of mastery you have not yet otherwise achieved? Because you feel bad for the script having to do nothing but meaningless work?
There are all kinds of things in life that contemporary culture encourages us to stop doing and instead pay someone else to do on our behalf. While division of labor is almost certainly a net gain for human comfort and quality of life, that doesn't mean it's always the appropriate thing to do.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#37Wages are a function of the scarcity of labor. Advances that increase the productivity of workers often also makes it easier to do those jobs, hence a larger labor supply that pushes the price of labor downwards.
> Wages are a function of the scarcity of labor This assumes an unconstrained "market" for the exchange of labor and wages, just as the claim that "prices are a function of the scarcity of goods" assumes an unconstrained "market" for the exchanges of goods and money. But this is not the only model for economic exchanges of labor, goods and money. The Romans, for example, did not use market pricing, but instead were p…
That other models of thought exist does not belie than an abundance of labor is the reason wages do not track productivity.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#38Earlier quoted context omitted.
I think this a a demonstration that trickle-down economics doesn't work, because additional capital injected into a capitalist system tends to be captured by the capital at the top. Rationally, you would expect productivity gains to be captured disproportionately at the point where the gain occurs, on the assembly line, not back up through the hierarchy. But because of the rich-get-richer mathematics of capital, thos…
But do productivity gains occur on the assembly line in the first place? I would guess that people today are about as good at working on an assembly line as they were 50 years ago, and we're more productive only because of capital improvements in machinery and infrastructure. That's not to say we shouldn't work to improve the average worker's wealth and quality of life, of course! I'm all in favor. But it's not a mat…
That "machinery and infrastructure" is on the assembly line, not in the C-suite. It is literally there to make the assembly line workers more productive, so it takes fewer of them to do the same work. Now, you can say that the workers contributed nothing to the improvement, so why should they benefit? But the system is set up so they can't contribute improvement---they can't accumulate the capital it would take to upgrade the machinery and infrastructure because their wages are minimal, and there's no mechanism in place for them to capture the benefits if they could. Sure, there are token rewards for assembly line improvements, but those kinds of sporadic rewards are generally minuscule compared to the long-term benefit realized by the company.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#39Maybe I’m wrong but what is the causal link between productivity and wages, especially minimum wage? I always thought that cost of living dictated wages and the so-called wage stagnation was due to relative lack of inflation for basic living expenses over the past 20 years. Also the past 20 years have seen a relative large influx of immigration compared to the previous 20 years. Increasing the competition between wor…
I don't think there is. This is mostly political in that businesses ought to be keeping up wages because that's the right thing to do. If the supply of labor is such that they always have access to lower-paid workers though, there's no real obligation to increase pay.
This is when minimum wage should come in, and this would be an argument for increasing minimum wage to that end, but businesses themselves can just ignore these kinds of arguments. Certain benevolent PR acts run contrary to this where they do increase wages because it's the right thing to do.
Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour
#40There's a lot of reasons for this but one of the largest is the near invisible (to me) structural shift from direct hire to contractors for jobs at the lower end of the wage/salary spectrum.
There is a fantastic long form article that articulates this better than I can at:
https://highline.huffingtonpost.com/articles/en/poor-millenn...
The portion relevant to this discussion:
"Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and enjoying the same benefits as everyone else. Today, they’re almost all indirect hires, employees of random, anonymous contracting companies: Laundry Inc., Rent-A-Guard Inc., Watery Margarita Inc. In 2015, the Government Accountability Office estimated that 40 percent of American workers were employed under some sort of “contingent” arrangement like this—from barbers to midwives to nuclear waste inspectors to symphony cellists. Since the downturn, the industry that has added the most jobs is not tech or retail or nursing. It is “temporary help services”—all the small, no-brand contractors who recruit workers and rent them out to bigger companies.
The effect of all this “domestic outsourcing”—and, let’s be honest, its actual purpose—is that workers get a lot less out of their jobs than they used to. One of Batt’s papers found that employees lose up to 40 percent of their salary when they’re “re-classified” as contractors. In 2013, the city of Memphis reportedly cut wages from $15 an hour to $10 after it fired its school bus drivers and forced them to reapply through a staffing agency. Some Walmart “lumpers,” the warehouse workers who carry boxes from trucks to shelves, have to show up every morning but only get paid if there’s enough work for them that day."