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Minimum wage would be $26 an hour if it had grown in line with productivity

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Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#11

Post by JoeAltmaier »

standardUser wrote: post #5
credit_guy wrote: post #2

No it would not. The average productivity of a US worker might have increased by a certain amount, but not the productivity of the minimum wage earners. If their productivity had gone up that much, there would be no need for a minimum wage law, the employers would simply be glad to pay them based on their productivity.

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

It indicates the major flaw of capitalism: It has no moral compass whatsoever. Its a vicious meat grinder. I think the comment is quite insightful, in the employers might think one thing while the realities of capitalism dictate another.

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#12

Post by ido »

vrotaru wrote: post #7
standardUser wrote: post #5

Earlier quoted context omitted.

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

Why do you think the capitalist pay programmers so much?

Nobody is "glad" to pay programmers that much - they pay as little as they can get away with, which for programmers happens to be a higher floor.

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#13

Post by decebalus1 »

vrotaru wrote: post #7
standardUser wrote: post #5

Earlier quoted context omitted.

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

Why do you think the capitalist pay programmers so much?

Because they 'currently' have no choice. Give it a few more decades..

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#14

Post by randyrand »

When productivity increases, you have 2 choices:

1. increase your wages. pay your suppliers more.

2. decrease your prices.

It doesn't really matter which you do. Do we want higher wages or lower prices? You can't do both. Does it even matter? The net effect is the same. Who cares that we've universally chosen #2?

Note: I'm assuming there's modest competition. Monopolies have a 3rd option: more profit.

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#15

Post by pydry »

credit_guy wrote: post #9
standardUser wrote: post #5

Earlier quoted context omitted.

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

Not when we are talking about $15 vs $26 per hour. If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. PS: it looks like the federal minimum wage is still $7.25 [1], not $15. You can become richer. [1] https://www.dol.gov/general/topic/wages/minimumwage

>If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich.

How? If their productivity is $26 / hour but their market rate is $15 / hour, by paying them $20 / hour you'll just post lower profits than companies that pay them market rate.

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#16

Post by omgwtfbyobbq »

credit_guy wrote: post #9
standardUser wrote: post #5

Earlier quoted context omitted.

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

Not when we are talking about $15 vs $26 per hour. If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. PS: it looks like the federal minimum wage is still $7.25 [1], not $15. You can become richer. [1] https://www.dol.gov/general/topic/wages/minimumwage

You could, if you also had access to the same assets that the employers paying $15/hour do.

Practically speaking, it's relatively hard to enter into a market and outcompete existing firms for labor without a significant amount of capital to offset the existing assets of the employers you're competing with.

The other downside is that it can initially leave a business more vulnerable to a bad economy in the same way corporations buying back shares can make them more vulnerable. With that said, the solution is to slowly increase wages while also building a sufficient amount of capital to weather an economic downturn.

And at the end of the day, anything that went into business expansion and/or profits could have gone at least partially to higher wages instead.

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#18

Post by all2well »

credit_guy wrote: post #2

No it would not. The average productivity of a US worker might have increased by a certain amount, but not the productivity of the minimum wage earners. If their productivity had gone up that much, there would be no need for a minimum wage law, the employers would simply be glad to pay them based on their productivity.

This is just begging the question. How do you know wage changes equal changes in productivity?

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#19

Post by miduil »

randyrand wrote: post #14

When productivity increases, you have 2 choices: 1. increase your wages. pay your suppliers more. 2. decrease your prices. It doesn't really matter which you do. Do we want higher wages or lower prices? You can't do both. Does it even matter? The net effect is the same. Who cares that we've universally chosen #2? Note: I'm assuming there's modest competition. Monopolies have a 3rd option: more profit.

> [...] their pay has flatlined, or even declined when factoring in inflation [...]

Neither #1 NOR #2 are happening, what is instead happening is #3

> [...] increased inequality with most gains going to people at the top [...]

Re: Minimum wage would be $26 an hour if it had grown in line with productivity

#20

Post by alice-i-cecile »

randyrand wrote: post #14

When productivity increases, you have 2 choices: 1. increase your wages. pay your suppliers more. 2. decrease your prices. It doesn't really matter which you do. Do we want higher wages or lower prices? You can't do both. Does it even matter? The net effect is the same. Who cares that we've universally chosen #2? Note: I'm assuming there's modest competition. Monopolies have a 3rd option: more profit.

The critique is that much of the investor class has chosen:

3. Pay yourself more.

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