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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

#231

Post by sjy »

NovemberWhiskey wrote: post #119
dantheman wrote: post #87

Earlier quoted context omitted.

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 impor…

It is as simple as “X is available more cheaply from a third party supplier.” But in the case of services that depend on low-skill labour like room cleaning, there are no presumed economies of scale. These companies don’t get the same work done with less labour, like utility suppliers. Instead, they pay workers less, and use complex business structures and confidentiality agreements to protect the client from the consequences (unions, lawsuits and PR damage). This isn’t capitalism realising positive-sum efficiencies; it’s just taking resources from workers and giving them to business owners.

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

#232

Post by slg »

cafed00d wrote: post #223
slg wrote: post #215

Earlier quoted context omitted.

>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. This is not completely fair. There are countless innovations that have allowed these low skill jobs to have an increase in efficiency and productivity. One example, when I was a teen and worked retail I remember we would all have to spend hours going around the store counting every product on the shelves in order to do our rout…

> Now many stores have intelligent inventory tracking that requires little to no work from employees. > Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? It is, though, right? It is passed on to the employees who were responsible for the efficiency gains. Those employees who built those innovations — could be employees of retailer, or employees of the companies, say tec…

That is a reasonable retort, but it ignores that last question I asked.

>How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful?

I'll admit software developers might be a bad example for that given question since they are responsible for some downstream efficiency, but the overall point still stands. Why do high skill jobs get to capture the value of their increased efficiency but low skills jobs don't?

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

#233

Post by pmiller2 »

SketchySeaBeast wrote: post #206
missedthecue wrote: post #202

Earlier quoted context omitted.

the spike in the last year is an glitch in their display software, but it doesn't change the central point of what's being shown here. What version of average do you think is appropriate?

https://fred.stlouisfed.org/series/A229RX0 Even here there is a definitive and deliberate bump right during the beginning of the COVID times. I don't believe that's an artifact. Somehow this analysis is saying people are vastly better in August than they were in February. I think that "average" in most of the different versions is useless. The millionaire and billionaire classes can be so over-represented they can dr…

The "COVID bump" is driven primarily by stimulus checks and enhanced unemployment benefits: https://www.marketwatch.com/story/personal-income-surges-105...

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

#234

Post by lotsofpulp »

Ductapemaster wrote: post #131
mortenjorck wrote: post #106

Earlier quoted context omitted.

There’s an excellent and frankly damning ProPublica report that serves as a case study in the movement to rely on staffing companies for low-wage labor: https://www.propublica.org/article/meet-the-customer-service... The degree to which both costs and risk are shifted onto workers is at times astonishing: “After paying about $1,500 for home office equipment: a computer, two headsets and a phone line dedicated to Aris…

The really awful thing from that story (Planet Money did a great recent episode on the ProPublica coverage) is that they are able to get away with this through Arbitration clauses. By way of their contracts, they strongarm their contractors into dealing with any "misclassification" issues (eg. exerting too much control over a contractor) individually, silently, and outside of court. Contractors have no ability to sue…

> is that they are able to get away with this through Arbitration clauses.

The root cause is the demand for that type of labor is dwarfed by supply for type of labor, and the long lasting solution would be to provide those people with better options.

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

#235

Post by monocasa »

bhupy wrote: post #227
monocasa wrote: post #193

Earlier quoted context omitted.

But why aren't they paying a living wage in the first place, a wage that they were paying in the past if not for inflation? And wouldn't the cost of the subsidy mainly be spread across the upper end of the middle class and not the employers, making it be a net benefit for the employers? Walmart for instance already has a huge emphasis on setting their employees up with welfare and using that to pay them a below livin…

> But why aren't they paying a living wage in the first place, a wage that they were paying in the past if not for inflation? Because the market rate for labor doesn't always work out to equal a "living wage". Markets are remarkably good at bringing down the price of goods & services, but that necessarily means that they also bring down the price of labor, which is an input. While this is good for most people, it's o…

If they actually brought down the cost of goods & services overall, we'd see the consumer price index dropping. That's not what's happened.

Most of the structures of UBI I've seen seem like a massive redistribution scheme to the wealthy.

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

#236

Post by whoisburbansky »

slg wrote: post #232
cafed00d wrote: post #223

Earlier quoted context omitted.

> Now many stores have intelligent inventory tracking that requires little to no work from employees. > Why isn't the benefit of that efficiency passed on to those employees who are now more efficient? It is, though, right? It is passed on to the employees who were responsible for the efficiency gains. Those employees who built those innovations — could be employees of retailer, or employees of the companies, say tec…

That is a reasonable retort, but it ignores that last question I asked. >How is that any different than a software developer receiving a higher salary because they are more efficient due to computers being more powerful? I'll admit software developers might be a bad example for that given question since they are responsible for some downstream efficiency, but the overall point still stands. Why do high skill jobs get…

It sounds like the argument is that high skill jobs are the reason for the increased efficiency, so they get to keep the surplus value generated?

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

#237

Post by lotsofpulp »

woo49 wrote: post #76
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 biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up? The productivity gains went to either things that got automated (e.g. speciality equipment operator - wages are higher but there are less jobs) or knowledge workers (software engineering salaries have skyroc…

> The biggest reason is that there has been almost no productivity gain for cleaning a hotel in the last 20-30 years. It takes same amount of time and effort. So why would the wages go up if productivity is not up?

Wages are a function of supply and demand. If the people cleaning hotels had better options, their wages would go up (or hotels would shut down, or ask people to clean their own room before they leave, etc.)

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

#238

Post by slg »

mgolawala wrote: post #229
slg wrote: post #215

Earlier quoted context omitted.

>Someone stocking shelves in 2020 is about productive as someone stocking shelves in 1968. This is not completely fair. There are countless innovations that have allowed these low skill jobs to have an increase in efficiency and productivity. One example, when I was a teen and worked retail I remember we would all have to spend hours going around the store counting every product on the shelves in order to do our rout…

I think the point the OP is making is that the benefit of this efficiency gain is passed on to the technology teams that implement and maintain those intelligent inventory tracking systems. They are the ones getting paid the higher salaries. They are the ones making the the store workers more efficient. What makes you feel that Software developer salary is linked to computing power? In fact, even if we were to consid…

>What makes you feel that Software developer salary is linked to computing power? In fact, even if we were to consider it a fair comparison, computing power, if measured by Moore's law has doubled every 2 years. Software Engineer salaries have lagged far far behind.

Honestly, I don't think there is any relation between developer salary and computational power. I was just reaching for a possible explanation for this[1] that fits with the theory that people are paid based on their productivity. It is my belief that people are paid based off the supply and demand for their labor. Productivity only serves as a ceiling for compensation and even then, that is only in the long term. Plenty of people are paid more than their production either over the short term or when productivity is difficult to measure. An employer's natural inclination is to pay people as far below their level of production as possible while still filling the job.

It is my belief that the reason that low skill wages have stagnated is not because their efficiency has stagnated. It is because their supply is outpacing their demand. The supply of software developers is not keeping up with demand so their wages are increasing. Neither has anything to do with productivity in my opinion.

[1] - https://lh6.googleusercontent.com/5n4R_Osks_fVsVmedxJKsp9zPu...

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

#239

Post by thebradbain »

missedthecue wrote: post #179

And if they had kept up since 1949, minimum wage would be $4.22 an hour. Two can play the game of cherrypicking troughs and peaks. Additionally, average productivity is not minimum wage productivity. They are separate statistics, and the bulk of the efficiency gains have not been made at the burger flipper level, but at higher levels, where there have been huge gains in pay. The productivity gains in engineering and…

Assuming you cherry-picked the lowest wage and this article cheery-picked the highest when compared to productivity gains, a naive split right down the center would yield a wage of $14.11/hr — or almost double federal minimum wage today.

I throw this number out there not for it to be taken seriously on its own purely because it’s “in the middle”, but to hopefully put into perspective how large this gap is, again naively assuming the “correct” number is somewhere between the two extremes.

I personally find it harder to imagine that the “correct” minimum wage is closer to $4.22 than it is to $14.11 or even $24, but that’s just me.

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

#240

Post by qeternity »

idrios wrote: post #55
ahoy wrote: post #53

Earlier quoted context omitted.

I don't think "this is fine because capitalism privileges capitalists by design" is the rebuttal you think it is.

I think he was just saying "this is what's expected" not "this is fine"

Yes, bummed I had to scroll to end of comments for someone who gets it. Society can change the contract we all abide by. But as it stands right now, this is working as intended. And living standards of the bottom 10% versus 100 years ago are unimaginably better off, which is what we sought a century ago: absolute improvements.

Now everybody is rich enough that we can afford to debate the relativism of the capitalist social contract...but that’s only thanks to the advancements brought about in the first place.

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