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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

#61

Post by SpicyLemonZest »

QuercusMax wrote: post #41
SpicyLemonZest wrote: post #27

Earlier quoted context omitted.

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…

Isn't that what Lean, Six Sigma, and all those processes were about originally? Everybody working to improve their productivity, going all the way down to looking at what workers on the line are doing? I'd expect that in the last 50 years we actually have gotten better at sequencing assembly-line work, and improving worker productivity through better techniques.

It is, and I'd guess that the companies who've used such processes are disproportionately likely to be the ones paying employees better than in the 70s. It's my understanding that nobody on the GE assembly lines makes close to minimum wage.

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#63

Post by PaulDavisThe1st »

css wrote: post #48
PaulDavisThe1st wrote: post #43

Earlier quoted context omitted.

There's no inherent reason why an abundance of labor would cause wages to not track productivity (either within a sector, or across an entire economy). In a culture that viewed the economy as a tool to enhance the living standards and quality for all of its members, there might be a very weak or even non-existent connection between labor availability and wages. Productivity gains could be viewed as way to either (a)…

> This is nothing like the economic system in which we live That some theoretical other economy might exist does not belie the one this article discusses correlates wages and scarcity of labor, nor does it preclude anyone from making different decisions about pricing their own labor.

The article discusses a hypothetical timeline in which wage growth tracks productivity. So it's already in the land of hypotheticals. The question is: how far into that land is it worth going to try to illuminate the full range of the possible?

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#64

Post by [deleted] »

qeternity wrote: post #49

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).

[deleted]

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#65

Post by ptmcc »

rayiner wrote: post #57

These sorts of comparisons are extremely difficult to make. They depend very strongly on what exactly you’re looking at, how you’re measuring inflation, etc. You can easily make charts that show total worker compensation is closely tracking productivity growth: https://www.americanactionforum.org/research/does-compensati... (Unlike Common Dreams, this article shows their work and discloses their exact methodology and…

Many (most) minimum wage jobs do not provide any meaningful benefits, so it's tangential to the minimum wage in most cases.

There's no doubt some fuzzy math involved to extrapolate inflation over the course of 50+ years, but I don't think that invalidates the fact that minimum wage has objectively not kept up with inflation even remotely.

The federal minimum wage has been stuck at $7.25 since 2009, and a handful of states are only just now breaching $15/hr. At this rate by the time a federal increase happens we'll already be another 20 years behind.

Worse yet is that labor data shows that more and more adults are working in minimum wage jobs, so the talking point of "it's just summer jobs for teenagers" and "it's entry level work to move on from" is very out of touch with reality these days. There are millions of people trying to survive on these wage levels and without benefits and it is not working.

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#66

Post by rayiner »

lilactown wrote: post #60
qeternity wrote: post #49

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 value does technology provide other than increasing labor efficiency? If tech helps me build 10x the number of widgets, should all of that surplus value only be captured by the technology owners? What about the people who build and service the technology which allows these improvements to be implemented?

If you replace 1,000 workers with 50 and a very expensive machine, should you pay each worker who remains 20 times as much? Because that’s the assumption in the article.

The people who build and service the technology are paid well. They’re techies who live in Silicon Valley, etc. But there are just very few of them compared to the 950 newly obsolete workers.

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#67

Post by Retric »

qeternity wrote: post #49

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).

In theory competitive markets should force companies to increase automation without long term increases in profits. Grocery stores installing checkout barcode scanners are in competition with other grocery stores which kept the profit margins stable over time. Being ahead or behind the curve impacted individual businesses, but the overall industry saw minimal change.

Thus, technology isn’t the cause of companies capturing a higher percentage of the increased efficiency due to automation.

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#68

Post by content_sesh »

SpicyLemonZest wrote: post #27
vannevar wrote: post #25

Earlier 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…

I'm not sure what you mean by "gains getting sucked up from where they naturally would have gone". If you have a capitalist economy where:

- productive output increases

- wages remain the same

- the length of the working day remains the same

then you have gains accruing to the capitalists and not the workers. (In the case where wages also increase but at a lower rate than productive output, gains are accruing to both capital and labor but disproportionately so to capital)

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#69

Post by downrightmike »

dcolkitt wrote: post #2

Average 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

A good chuck of that average is all the workers that are structurally unemployed and will only accelerate https://prospect.org/coronavirus/unsanitized-big-structural-...

Re: If pay had kept pace with productivity gains, minimum wage would be $24 an hour

#70

Post by exabrial »

Those two things are disconnected. Wages are dictated by supply and demand, not efficiency.

An oversimplified example [with lots of nuances I'm sure people will comment on instead of the original point]: The supply of heart surgeons is small, therefore they can command a larger wage and have their choice of jobs. The supply of burger-flippers is much larger and employers can usually find someone willing to do the labor for cheaper than another person.

The point being, the best way to increase your wage is to switch jobs to something where the supply of applicants is smaller and the demand is strong.

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