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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

#81

Post by ci5er »

michaelbuckbee wrote: post #40

There'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 wa…

That seems more-or-less intuitively plausible, but I often find missing from these discussions, is the aggregate employers' contribution to health insurance plans. If, for example, my employer's contribution to my health insurance premiums go up $500/month - I am going home with $6000 less that year. Now, they probably don't cut my wages, but it's pretty easy to see how they might be frozen for a few years.

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

#82

Post by jariel »

exabrial wrote: post #70

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 lab…

Doctors are a government-subsidized cartel! (In most places)

They fix the number of Doctors, and, the government usually provides substantial support for education and training.

So not a very good example!

But it's moot - on the 'low end' of wages, basically 40% of the population, people have 0 bargaining power - it's always been like that.

The 'free market' minimum wage would be ~2$ an hour. People would be living in favelas without electricity (or it would be stolen), no healthcare, no car, borderline subsistence living. An entire economy would pop up around that - instead of the 'Dollar store' you'd have the '25 cent' store.

Which is why every advanced nation has minimum wage laws.

The question is though - how much of the 'productivity gains' are from better labour in any ways?

Say for example a company hums along, and in an era of globalization is able to sell 5x more product, yielding really great surpluses. So the investors and execs start to get rich, the staffers get paid the same relatively speaking to inflation, their boat is possibly not lifted but stays the same. They are doing the same work, with the same skills etc..

That's more likely what is happening - labour used to be a commodity, but it's even more of a commodity now.

There are no easy solutions but minimum wage should possibly be hire, the jobs that can't be done at that price should go to Mexico to help that economy develop so they can be purchasers of American exports. Something like that.

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

#84

Post by pydry »

rayiner wrote: post #66
lilactown wrote: post #60

Earlier quoted context omitted.

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.

If efficiency has gone up why hasnt rent gone down?

Since rent has been pushed up by political means why not wages?

Also, why are we assuming that technology brought down wages when offshoring has skyrocketed. What makes you think it wasn't competition from the third world labor rather than robots? There is a political position embedded in the assumption that robots are responsible for the missing jobs.

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

#85

Post by commandlinefan »

shadowgovt wrote: post #80
exabrial wrote: post #70

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 lab…

Essentially. Which is why unionization is such an important process---it binds the supply-demand curve so that employers are forced to allocate the resources more equitably. Supply suddenly dries up if nobody's willing to work for you because you won't pay a living wage (let alone a decent wage).

Well, any way you slice it - through unionization or through legislation - a $24/hour minimum wage is just going to mean massive unemployment, not 3x more money in everybody's paycheck.

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

#86

Post by vannevar »

SpicyLemonZest wrote: post #78
vannevar wrote: post #38

Earlier quoted context omitted.

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 up…

I agree with what you're saying, but I think it's inevitable. The system is set up that way as an inevitable consequence of modern technology; automation and economies of scale are simply better at producing valuable things, so much better that an individual worker with no capital can't compete. We can change who has access to capital or reallocate the benefits of capital, but we can't change the fundamental problem…

It's inevitable only if we decline to regulate capital. Just as it's also inevitable that a speeding truck will crash, unless the driver puts on the brakes at some point. There is nothing in the laws of physics that dictates that our financial system must be as it is. It is the result of our collective choices, and we can change it when it becomes in our best collective interest to do so.

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

#87

Post by dantheman »

michaelbuckbee wrote: post #40

There'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 wa…

The question is why these services exist? I don't think it has to do with wages, I think it has to do with the difficulty of firing employees.

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

#88

Post by exabrial »

shadowgovt wrote: post #80
exabrial wrote: post #70

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 lab…

Essentially. Which is why unionization is such an important process---it binds the supply-demand curve so that employers are forced to allocate the resources more equitably. Supply suddenly dries up if nobody's willing to work for you because you won't pay a living wage (let alone a decent wage).

Except that's a temporary solution. Eventually the industry moves it to an area where people are willing to do it cheaper; hence why nearly all manufacturing is now done in poorer countries. Not saying this is correct, just commenting on reality.

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

#89

Post by adrianmonk »

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?

The surplus value should definitely not go 100% to the owners and 0% to the laborers. Otherwise, as economic output increases, workers' share of the reward can only continually decrease forever.

But the surplus value should definitely not go 100% to the workers and 0% to the owners. Otherwise, there is no reward for creating the surplus value, and productivity gains will not happen, which in general is no way to run a society. Plus productivity helps reduce scarcity, and scarcity disproportionately affects poorer people.

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

#90

Post by thatguy0900 »

dantheman wrote: post #87
michaelbuckbee wrote: post #40

There'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 wa…

The question is why these services exist? I don't think it has to do with wages, I think it has to do with the difficulty of firing employees.

Is this an issue in other countries where it is even more difficult to fire employees?
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