If pay had kept pace with productivity gains, minimum wage would be $24 an hour • Hacker News Board

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

#311

Post by 1123581321 » Sat, Oct 10, 2020, 1:48 AM UTC

tasty_freeze wrote: post #255

chordalkeyboard wrote: post #198

Earlier quoted context omitted.

> CEOs work isn't any more demanding than it used to be, either. I think it has, actually. The CEO's job became more complicated as a result of the increased complexity in the world. There used to be only brick-and-mortar and mail order, now there is internet. They used to advertise on tv, radio, and newspaper. Now they can advertise tv, radio, newspaper, online ads, and social media influencers. They didn't have to…

Has it gotten 10x harder? Was running the vast agglomeration of companies that was ITT really less difficult than running today's sprawling companies? Do you think the CEOs of today's companies get into the nitty gritty of all of those issues you talk about, or do they, as always, delegate the real work of understanding those issues to their subordinates?

Setting direction for others has always been the job, and the difficulty of that can vary.

If we measure a CEO’s job difficulty based on how many years a typical company in their industry can safely operate while stagnating, then the job has become many times more difficult in the last 40 years in some industries. In others, perhaps only twice as difficult.

That is not to say that salaries should stay high, but we would look for reduction to come from systemic productivity gains in management that have come to other white collar professions: software, more efficient management hierarchies, cultural changes in communication, etc.

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

#312

Post by cafed00d » Sat, Oct 10, 2020, 1:51 AM UTC

confidantlake wrote: post #277

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…

It feels very arbitrary to claim the employees responsible got the gains. Like take Walmart, the biggest beneficiaries by far are the relatives of Sam Walton. Yet they did nothing to build the automated inventory tracking, the statistical modeling, or the digital systems. Or take the programmers who worked on Walmart.com. They didn't invent the transistor, Linux, or Java. They just used them to build a crud app.

Yes fair enough. This is why every employee should get paid _stock/rsu/whatever_. The rewards of efficiency gains that Walmart, the enterprise makes, should be shared by the people who made it happen. But then again, not many people would prefer to take that risk and instead prefer to get paid a set hourly wage. Of course, it’s a matter of balance — how much guaranteed income vs. risky income does a person want?

I don’t know. That’s a really difficult problem to solve through legislation.

Ultimately though stocking shelves in 1968 Walmart is about as efficient as stocking shelves in 2020.

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

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Post by rayiner » Sat, Oct 10, 2020, 1:53 AM UTC

pydry wrote: post #214

rayiner wrote: post #152

Earlier quoted context omitted.

If you can find an NYT article in the last two years using AEI as the source of a story I’ll buy you a nice bottle of whiskey. The media will systematically ignore sources like AEI, that use actual numbers, in favor of soundbites like the one in this Common Dreams article.

the media ignores them does it? https://www.cnbc.com/video/2020/05/26/capitalism-coronavirus... i would be mildly surprised if "liberal" CNBC had even one person from common dreams on. i'm not gonna dig through the new york times for examples where they cited somebody from AEI coz it's paywalled but it wouldn't surprise me if they, like CNBC do, routinely.

CNBC isn’t NBC, and it’s not a general-interest media outlet. It’s a specialized outlet for financial and business people: https://en.wikipedia.org/wiki/CNBC

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

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Post by SamReidHughes » Sat, Oct 10, 2020, 1:54 AM UTC

pydry wrote: post #212

SamReidHughes wrote: post #130

Earlier quoted context omitted.

What. Lowering taxes doesn't lower wages. Higher rents are caused by regulations, not freedom from regulations. You have to ask permission for something as simple as building places to live.

No, it raises rents. California rents can be traced back to prop 13, for instance. Prop 13 wasn't run on a platform of raising rents, was it?

Lowering taxes on renters can raise rents, if new housing is banned, because renters then have more money to compete for limited housing with. Likewise, the recent corporate income tax cuts raised wages at the bottom.

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

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Post by matthewdgreen » Sat, Oct 10, 2020, 2:01 AM UTC

rmason wrote: post #116

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 t…

This story would be more convincing if revenues and profit margin for US firms were correlated with wages. But insofar as they’re not, then all you’re saying is “firms chose to spend less on labor because there was more of it thanks to globalization”.

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

#316

Post by pmiller2 » Sat, Oct 10, 2020, 2:05 AM UTC

smaryjerry wrote: post #288

pmiller2 wrote: post #211

Earlier quoted context omitted.

Now, overlay that with a graph of productivity over time. Observe that productivity growth has greatly exceeded wage growth. Speculate on where the gains due to productivity have gone, if they’re not being shared with workers. There’s a story to tell here, but you’re not showing it.

Productivity has nothing to do with wages. If you worked 4 hours writing a book by hand or 4 hours writing a book on a computer with spell check, you were more productive but it has nothing to do with skill of the user but the technology of the time. Another example is in the 90s only rich has cell phones, now everyone Does, does that mean everyone is now rich? Quality of life is vastly better for the world now.

You should read an economics textbook, then come back and tell me again with a straight face that productivity doesn't affect wages. You don't seem to have an understanding of the issues, and your examples are so irrelevant as to be not even wrong.

Roughly, the way it "should" work is that if Company A and Company B are in the same industry, and Company A is more productive than Company B, free market forces cause Company A to pay more than Company B, thus improving their ability to compete for workers. Generalize this to an entire industry of competing companies, and then to an entire economy.

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

#317

Post by camgunz » Sat, Oct 10, 2020, 2:11 AM UTC

rmason wrote: post #116

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 t…

Nah, it’s entirely income inequality. Here’s US GDP per capita since 1960, adjusted for inflation: https://tradingeconomics.com/united-states/gdp-per-capita

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

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Post by matthewdgreen » Sat, Oct 10, 2020, 2:19 AM UTC

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…

Within some constraints, the decision on how to distribute these excess productivity benefits is basically arbitrary. There is some minimum you need to pay people in order to get them to work. Once that’s done, you have some excess. You could distribute that to front-line workers. You could distribute it to the software teams, but you sure don’t have to. In practice, human nature being what it is, what will most likely happen - in the absence of specific government policies incentivizing other choices - is that management will distribute it to themselves and their shareholders.

We in the US once had a number of tax policies that were designed to disincentivize this kind of payout, and encourage companies to maintain full-time workforces with decent benefits, invest in R&D and facilities improvements etc. Other countries still have those policies. But we here in the US got rid of a lot of them. The result is that excess productivity benefits have been distributed in exactly the way you’d expect - with frankly alarming effects on our political stability.

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

#319

Post by matthewdgreen » Sat, Oct 10, 2020, 2:28 AM UTC

m0zg wrote: post #286

bsanr2 wrote: post #264

Earlier quoted context omitted.

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.

> they're getting relatively hosed If by "hosed" you mean getting $120K salary right out of school, then I guess that's true. I'm just not sure I'd call that "getting hosed" though. If you want to see what "getting hosed" means, go work as an SWE in Europe.

High US tech salaries are an ephemeral business problem that owners have not yet eliminated. Eventually they will.

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

#320

Post by RhysU » Sat, Oct 10, 2020, 2:33 AM UTC

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…

> Why isn't the benefit of that efficiency passed on to those employees who are now more efficient?

Because any teenager would be more efficient with automated inventory control. Teenager X didn't have to learn how to do something more complicated. The labor is interchangeable. It is a victory of capital.

Labor specialization and labor skills are what allow labor to collect more of the spoils. Otherwise, labor is interchangeable. The job must need you more than you need the job. Supply and demand.

On the computer power point: scaling has changed as Moore's law has died. It takes something more subtle to make modern systems sing. Something inaccessible to most teenagers without both aptitude and training.