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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

#41

Post by BuckRogers »

Going off of productivity has a lot of gotchas, I'd go for tracking purchasing power for non-imported goods like housing for the zip code that the job is located in. There might be some interesting side effects to that. Pushing businesses into poor areas, which should have a positive effect on society as a whole to get money coming into those areas without handouts or mandates. It'd be a fun experiment to run.

I see zero arguments against pegging the minimum wage to $12 an hour in 2021, maybe a tad more to offset years of what amounts to theft from worker's pockets. People on one hand will badmouth those on welfare, and then turn around and not want to reward those that go to work either. Those two together never sat well with me. Seems like people are just envious, bitter creatures all around.

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

#43

Post by randyrand »

miduil wrote: post #19
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 [...]

Even if that is true, productivity is not the cause there.

Productivity increases our wages because it naturally decreases prices. It's already account for.

Edit: to those that don't believe it, what do you think would happen if suddenly 3x more of every product popped into existence?

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

#44

Post by agitator »

I'm struggling to understand how productivity has anything to do with salary.

Productivity increases are inevitable for everything as automation keeps improving. Salaries go up with demand for skills. If its more difficult to hire for a critical role (a skilled job or competitive), or the role generates a lot of value for a company, salaries go up. Simple economics.

Low skill jobs and physical labor jobs actually require less and less skills as automation improves. In this situation wages would go down. But I do think it's a good idea to have a wage floor to account for the inflation and increases in cost of living. A social limit to what we all collectively feel is a minimum amount of money one of us should make to survive in the society we are building. I think universal healthcare and a UBI would solve a lot of this. Especially as its only going to get worse for people at the bottom.

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

#45

Post by acchow »

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.

When your life (and health coverage!) depends on your job and you don't have the energy or time to shop around for alternative jobs, you have little negotiating power. Your employer will not simply raise your wages just because productivity has increased without you finding some negotiating power to demand it.

This is why labor unions are so helpful for the working class.

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

#46

Post by lostapathy »

jrsj wrote: post #39

This might be the case but many jobs I feel like would no longer be worth paying anyone to do at that rate. That would suggest to me that the productivity of minimum/low wage workers has not increased at the same rate as productivity generally. Which would make sense given most of that increase is attributable to technology which isn’t distributed evenly through different sectors of the economy etc.

Right, this is where this sort of blanket extrapolation breaks down.

Has the average productivity grown that much? Sure, I can believe that. Has the productivity at the lower margin grown that much? I seriously doubt that. The value created by stocking shelves at wal-mart just doesn't really change over time. There's a lot of labor on the lower end that is a solved problem with all the productivity wrung out of it decades ago.

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

#47

Post by VRay »

pydry wrote: post #15
credit_guy wrote: post #9

Earlier quoted context omitted.

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.

The workers will leave all the other companies and work for you, so those other companies will be dead in the water and/or stuck raising their own workers' pay to compete

At least, that's how it was supposed to work in theory.. Now that we see people out there going for improved wages/jobs in line with good capitalist doctrine, the business owners are all screaming in rage about a "labor shortage"

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

#49

Post by agitator »

BuckRogers wrote: post #41

Going off of productivity has a lot of gotchas, I'd go for tracking purchasing power for non-imported goods like housing for the zip code that the job is located in. There might be some interesting side effects to that. Pushing businesses into poor areas, which should have a positive effect on society as a whole to get money coming into those areas without handouts or mandates. It'd be a fun experiment to run. I see…

Yeah that's interesting. I think incentivizing distribution of jobs might solve a lot of issue... but who knows there are always side effects and loop holes.

I agree, might be worth an experiment.

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

#50

Post by NovemberWhiskey »

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.

I think this is probably right?

If you consider positions like janitors, bussers in restaurants, hotel housekeepers (etc) and ask the question "what has happened since 1968 which would've caused productivity for these jobs to increase by 150%?", what would the answer be?

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