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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

#111

Post by dredmorbius »

olvar_ wrote: post #54

I feel this discussion always misses an important point. The value of something has nothing to do with its costs or profits. The value of things (labor included) is subjective and is normally related to its scarcity. In the period analyzed the workforce basically doubled because the inclusion of woman to the workforce, therefore it had a huge pressure to keep it low.

If the productivity of less-skilled workers has not kept pace with average productivity, this was by design. It was not the fault of these workers; it was the fault of those who designed policies that had the effect of devaluing their skills.

From Baker's article.

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

#112

Post by staplers »

norseboar wrote: post #95

I think there's a bad assumption in here, which is that pay should keep pace with productivity gains in the first place. I'd argue the whole point of productivity gains is that they do outpace pay. The idea is the same work generates more value. Some of that extra value can be passed back to the employee, but if all of it is passed back to the employee, then the goods produced don't actually get cheaper. If nothing g…

  If nothing gets cheaper
Would anything need to get cheaper if everyone was making more money?

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

#113

Post by jbob2000 »

ivojp wrote: post #99

I'm going to pose this question more in the context of their analysis and without consideration to anything else. There have been a myriad of studies which try to link minimum wage to worker productivity and the default assumption is always that the worker should bear the fruit of all productivity gains. Why is this the case? Often, it is not the worker who was responsible for the capital investments that increased h…

Your assumption that wage should align to productivity is false. It’s pretty hard to justify some athlete and artist wages this way, you have to really stretch what it means to be “productive”

Wage aligns with replaceability - how easy is it to replace you? Professional athletes are hard to replace, doctors less so, cashiers even less.

Wages are driving down because, unless you get lucky, there’s not much to do. Big companies chop up specialized roles into a hundred “dumb” ones so people can be easily replaced.

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

#114

Post by jdmichal »

H8crilA wrote: post #50

https://wtfhappenedin1971.com/ 1971, 1968, doesn't really matter. But - many such "negative" effects only really show up after 1981, that is after the peak of the interest rates. RIP Volcker, the last Fed president with vision. If you're into slightly crazy sounding theories about the cyclical nature of human progress I recommend: https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generatio... . Ray Dalio is also wri…

I could have bought into this theory... Except that it has these four generations grouped and seems to just cherry-pick good and bad events for each to meet the narrative. I would have expected that every generation have certain crises and certain renaissances active at the same time, and that the pattern of these might loop over time.

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

#115

Post by pydry »

dantheman wrote: post #94
pydry wrote: post #84

Earlier quoted context omitted.

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.

How about let's fix rent and not carry mistakes over to other domains.

I'm all in favor of a 100% land value tax but I'll happily take a higher minimum wage to compensate for a lack of it while the political system gets its act together.

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

#116

Post by rmason »

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…

All these comparisons miss one thing: after WWII America had a monopoly. We had destroyed our competitors factories in Asia as well as in Europe. It took a while for them to build back and be truly competitive outside their home countries.

Here in Michigan we had a front row seat to this happening with manufacturing. Everything peaked in 1973 and has been on a slow decline ever since. Sure there have been booms but the long term trend has been down.

The Japanese started importing cheap motorcycles to the West coast, then cheap cars. We didn't see them in Michigan and if auto execs did they would have laughed. The Big 3 saw VW and their Beetle as the big import threat. Suddenly those Japanese cars became better in quality. Then the Koreans went through the same cycle and Japan introduced luxury cars as well.

Because wages were much less in Asia even after accounting for shipping this exerted downward pressure on wages. Give America back the monopoly it had in the fifties and sixties and minimum wage would be $24 an hour.

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

#117

Post by codekansas »

pydry wrote: post #84
rayiner wrote: post #66

Earlier quoted context omitted.

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.

I would guess this speaks more to political mismanagement than an intentional goal. No politician is going to get elected on a platform of higher rents and lower wages. Increased rents, at least, are usually caused more by good intentions gone bad than by intentional malice

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

#118

Post by lilactown »

leetcrew wrote: post #79
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 tech helps me build 10x the number of widgets, should all of that surplus value only be captured by the technology owners? idk about the owners specifically, but I think it's fair that the lion's share of the gains go to the people who made it happen. in this example at least, the widget maker didn't do anything to increase their productivity.

Someone else elsewhere made this point: the widget makers are not generally capable of increasing their own productivity because they don't have access to the capital required.

This method of organizing labor and value which disallows workers' to gain anything from increases in their own output keeps them from ever being able to participate in it, leading to alienation from their jobs and living in a perpetual cycle of poverty.

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

#119

Post by NovemberWhiskey »

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.

Aren't the usual reasons we buy a service rather than doing something ourselves chosen from a list that goes something like:

* X is available more cheaply from a third party supplier (who presumably has achieved some kinds of economies of scale) than our fully-loaded cost to deliver the same

* X is a commodity product where we do not feel we can differentiate ourselves by doing it in-house

* X is ancillary, but important, to our core business and we lack the expertise to do it well, so we will buy in rather than build that expertise

Not many hotels are bothering to drill their own wells these days, bearing in mind that water is available from utility suppliers - why would room cleaning service be immune from the same forces?

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

#120

Post by charlesu »

tasty_freeze wrote: post #110

Many comments are focused on "But why should minimum wage jobs pay scale rise with productivity? The jobs haven't gotten any more demanding." But isn't this logic applied to average CEO pay, which has gone up many times faster than productivity? CEOs work isn't any more demanding than it used to be, either.

Wages have little to do with productivity and everything to do with bargaining power. CEOs are paid well because we expect them to be and they can demand it, irrespective of their actual contributions to the success of the company. But for some reason only the worker must justify his pay.
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