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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

#261

Post by pmiller2 »

gwright wrote: post #259
pmiller2 wrote: post #257

Earlier quoted context omitted.

No, "total compensation" includes things like health insurance benefits that simultaneously have gotten more expensive in real terms over time, and don't put money in my pocket. If I could go to my landlord and trade them a months' worth of health insurance benefits for rent, then you'd be on to something. If you could find a way to separate out the part of "total compensation" that actually contributes to income, su…

Those benefits are income to you. Not taxable income, but they have a non-zero value. They certainly appear on the balance sheet of your employer and represent an increase in their total payroll costs.

I don't care if they appear on my employer's balance sheet. They don't pay my rent, literally. You can say "screw insurance; we're offering all employees this super expensive concierge medical plan," and that literally has no effect on my balance sheet, which is the problem if you want me to be a good consumer in the economy and buy stuff. Or, if you don't think we need more homeless people in this country.

If you want to look at the "value" of, say, an employer's group health insurance plan to me, what you really need to look at is the difference between buying the exact same coverage as an individual versus participating in the group plan. This is not an analysis that can typically be performed, because insurance companies don't want you to be able to compare on price like that. But, assuming you could, if I got, say, a $100 discount per month, and I was going to buy that coverage anyway, then, sure, you'd have a good case for calling that +$100 on my balance sheet.

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

#262

Post by bsanr2 »

slg wrote: post #215
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…

>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…

It's not fair at all. The responsibilities of retail employees have grown vastly in the last 50 years. There's more product, with a greater diversity of handling requirements, which need to be stocked across larger stores later in the day (as closing times slowly approach midnight or later). That's for supermarkets (which are increasingly part of larger big box stores). If you work checkout at a place that sells anything with a microprocessor, be prepared for weeks of onboarding as you learn enough about your products to actually sell to and support customers, across a stupidly wide assortment that used to be spread across several departments.

Let's not get started on discussing the interpersonal communication skills needed to survive Thanksgiving/Black Friday.

And for all this, you're getting paid less than Joe W. Cash Register got way back when.

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

#263

Post by sjy »

credit_guy wrote: post #122

In a very simplistic way, shouldn't the average wage keep pace with the average productivity gains and the minimum wage keep pace with the minimum productivity gains? I can see the average farmer making huge productivity strides, since they use much more complex combines, and irrigation systems and such, but did the productivity of a burger flipper go up similarly?

Minimum wages are inconsistent with the idea that people should be paid strictly according to their productivity. If society becomes more productive overall, as a matter of fairness I think that “should” result in the minimum wage being increased. The lowest-paid workers “should” enjoy better living conditions today than they did in the 1980s. Productivity gains across the entire economy are easier to quantify than “living conditions,” so I think the article makes a good case that the minimum wage “should” be significantly higher than it is now.

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

#264

Post by bsanr2 »

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…

SWE's don't have a union, so of course they're getting relatively hosed, too.

Though the disparity is somewhat justified in that the efficiency of software (neither in its running nor production) haw kept up with Moore's Law. In any case, owners and executives are funneling up the excess value created. It's there, you're just not getting it.

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

#265

Post by bhupy »

monocasa wrote: post #235
bhupy wrote: post #227

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? 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.

> we'd see the consumer price index dropping. That's not what's happened.

Not for all goods & services. The consumer price index has been falling for most goods & services with the notable exception of healthcare, housing, education, and (to a lesser degree) food.

https://howmuch.net/articles/price-changes-in-usa-in-past-20...

The only way to prove that “market forces do not reduce prices” is if all goods & services are provisioned through purely market forces, and the CPI still increases. But not all goods & services are provisioned through purely market forces.

The price of food in particular is largely dictated by the price of low wage labor, and minimum wage laws bring that up, despite productivity improvements elsewhere in the supply chain. In other words, the consumer price index for food could drop if the cost of labor wasn't constrained.

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

Only true for landlords, but that's because the supply of housing is artificially constrained by zoning regulations. If we fix that, then this becomes less true.

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

#266

Post by martin_bech »

mortenjorck wrote: post #207
martin_bech wrote: post #140

Earlier quoted context omitted.

Hi from Scandinavia, we dont have a monopoly on anything, and no actual minimum wage, yet people make about $20+ at the lowest paying jobs, enjoy 5 weeks paid vacation, free healthcare and cheap childcare..

The wild thing is that even if you were to apply Scandinavia's highest tax bracket of 57% to this (which someone in the lowest tax bracket would never pay), you'd still come out above the US national minimum wage, out of which one is also expected to pay for healthcare and budget for unpaid time off.

By my very limited calculations, you would be paying effictively about 33% tax, because of baseline deductions, and beeing in the lowest tax bracket. remember you still have free healthcare, education, paid vacation, paid maternity leave etc.

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

#267

Post by creata »

blunte wrote: post #242

I recently had a crazy (is it?) thought: what if hourly wages were the same for all jobs. Every human working one hour would be paid the same. The dishwasher in the restaurant would be paid the same as I would for writing software (they would earn more, I would probably earn less). I like money, but I would like every person giving an hour of their life to be compensated enough to get by measurably above poverty.

But then why would anyone do a hard or dangerous job?

(That's not to suggest that software engineering is hard or dangerous.)

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

#268

Post by martin_bech »

friedman23 wrote: post #194
Daishiman wrote: post #162

Earlier quoted context omitted.

We are all aware of that. Doesn't change that their policies are extremely similar by all accounts.

The point is that I can't determine where his country's wealth comes from if he doesn't state his country. Also I'm skeptical f this person actually even being from the region. For example, if he is from Norway most of his wealth is derived from oil.

Im from Denmark, none of the money is derived from oil.

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

#269

Post by deathanatos »

slg wrote: post #238
mgolawala wrote: post #229

Earlier quoted context omitted.

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 graph is not very well laid out; in order to see the effect it purports to show, you'd want to scale the SWE salary to all salaries to compare them; otherwise, you're just looking at "SWE is paid more than most occupations" → "SWE is still paid more than most occupations". Both clearly experienced growth, but did SWE experience more growth, or did it grow proportionally?

The SWE line in that graph grows by ~74%, and all other occupations by ~57%. So, the title seems probably correct, plus or minus the accuracy of my eyeball in reading those. But that's not how to present that…

(And also, the sin of not putting the Y axis min at 0, to exaggerate the effect.)

As a SWE myself, looking at the potential cost of housing if I ever decide to start a family, I'd mostly say SWE's wage growth hasn't kept pace. All other occupations are just getting hosed even harder. (My opinion here is that it's somewhat housing cost/supply: too little supply is driving the cost up, and wage increases are likely to just push that further. What is needed there is increases in the supply, moreso than wages, for housing specifically. For wages, I do think the minimum wage is too low, and has not kept pace. See also this graph: https://www.washingtonpost.com/business/2019/12/03/precariou... )

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

#270

Post by Traster »

charlesu wrote: post #120
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.

This is self-fulfilling. There is a claim that CEOs are well paid because they're in high demand. The truth is that it's actually difficult to find someone who will work for minimum wage in a In-n-Out burger in San Jose. It's easy to find a dozen qualified candidates for CEO - hell, half of them are CEOs at similar smaller companies and the other half are CxOs/SVPs at the company you're hiring for. The myth is that you need some massive salary to attract the best, whereas what actually happens is you hire who you would've hired anyway, but you pay them a massive premium.
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