51–60 of 451 posts
Also, commondreams.org is a known socialist website. Their claims on economic productivity should be taken with an enormous grain of salt.
Maybe 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…
There isn't a causal link. That's why we have minimum wage laws. The idea is that rather than paying people what we can get away with, we pay them what they are worth to us. If productivity improves, but wages are indexed only to inflation, then the rich get richer and the poor at best stay the same. They produce more but don't see their lives get better. In a country that has produced so much additional wealth, it w…
This is so horribly flawed. Productivity improvements have been concentrated at the high end, and those that have occurred in low skilled jobs have been almost entirely due to technology, not to labor efficiency. Technology gains have always disproportionately been captured by the providers of capital over the providers of labor (given they are the ones who invest in said technology).
This is so horribly flawed. Productivity improvements have been concentrated at the high end, and those that have occurred in low skilled jobs have been almost entirely due to technology, not to labor efficiency. Technology gains have always disproportionately been captured by the providers of capital over the providers of labor (given they are the ones who invest in said technology).
I don't think "this is fine because capitalism privileges capitalists by design" is the rebuttal you think it is.
This is so horribly flawed. Productivity improvements have been concentrated at the high end, and those that have occurred in low skilled jobs have been almost entirely due to technology, not to labor efficiency. Technology gains have always disproportionately been captured by the providers of capital over the providers of labor (given they are the ones who invest in said technology).
(Unlike Common Dreams, this article shows their work and discloses their exact methodology and data sources.)
There’s a couple of big picture issues to consider:
1) Why focus on just wages, rather than just benefits? If productivity doubles, but the cost of providing healthcare triples, should employers cover the increased healthcare costs and also double wages? It’s not Microsoft’s fault that it costs $5,000 to get an MRI. From the perspective of how much is transferred from the employer to the employee, a dollar spent on wages isn’t any different than a dollar spent on healthcare.
Failing to distinguish the two things obscured the real problems. It makes you think something is a structural economic problem when in reality it’s cost disease in a particular industry. Wages aren’t keeping up with the cost of housing in New York and San Francisco. But nationwide, the median mortgage payment as a percentage of the median income has scarcely changed since the 1970s. Are wages the problem or are local laws around housing the problem?
2) There is kind of a metaphysical question about who should get the benefits of investment in technology. If you replace 100 workers with technology + very expensive capital equipment, productivity will increase by a factor of 10. (That’s how labor productivity is measured.) Does that mean wages should go up by a factor of 10?
Is there any evidence that whole-workforce productivity applies equally to minimum wage jobs? If not, the claim seems unsustainable. Completely anecdotally, improvements in labor productivity due to automation (etc) are less likely to be impactful in jobs like waiting tables, delivering newspapers or flipping hamburgers. That anecdotal evidence is backed by research that shows that service sector productivity tends t…
Maybe 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 ign…
The interests of individual firms are not aligned with the interests of the broader economy. It's in the interest of every firm to pay its workers as little as possible, but it's in the interest of the broader economy that most people can afford to buy goods and services. Every employee's wage is ultimately some other firm's income; keeping the game going requires that enough people are paid enough money to be able to spend it on things other than absolute essentials.
Even minimum wage workers have to pay for the basic necessities of life at prices that are largely set on the basis of what the median worker can afford. If minimum wages erode, minimum wage workers can't afford to live. This is a both a humanitarian concern and an economic problem because starving people don't make good employees, and people who don't have money can't buy goods and services from other firms. Every person who is pushed out of the economy in this way is an economic loss as they are no longer contributing to economic demand or producing goods/services with their own hands.
In a society with a social safety net, under-paid workers are also a cost to government as they will not pay taxes and will be due social assistance payments/transfers to help cover their costs for food and shelter. Further, underpaid workers may also pose a crime problem (in part because starving people will steal food), which imposes direct costs on crime victims and costs to government for police, prosecution, and corrections.
Underpaying workers benefits firms that do it, but the practice harms the overall economy and imposes externalities on others. Preventing this is why minimum wage laws exist and should keep up with the cost of living.
This is so horribly flawed. Productivity improvements have been concentrated at the high end, and those that have occurred in low skilled jobs have been almost entirely due to technology, not to labor efficiency. Technology gains have always disproportionately been captured by the providers of capital over the providers of labor (given they are the ones who invest in said technology).
What about the people who build and service the technology which allows these improvements to be implemented?