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What is the comparative quality of life like or those two examples?
Owning any single family home (presumably with a yard) seems clearly more attractive than living in a public housing apartment complex.
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>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"
I still get to name my price. And once you see that I can undercut labor costs due to this, it makes no sense for either you or Bob to continue paying twice as much as I do.
And let's not pretend that if you don't have the very best workers, you can't compete. First of all, you can't identify the best. You hope to get lucky, but in reality, you're going to be paying not the best, but those adequate enough to perform the job reasonably well.
COVID assistance has changed the game. Because before, the choice was to have a job or starve homeless. You'd take almost anything in desperation. Remove desperation and people stop acting desperate.
I agree that minimum wages are too low but the argument that wages should track productivity is false from economical point of view, in my opinion. The argument would be true if how people contribute to economy did not change. But over time disparity in contribution to economy changed. Hundred years ago people had very similar jobs, mostly physical, manual, where each would contribute rather similarly. Nowadays compa…
What stopping you from paying much more to these poor workers?
If you own a supermarket and want to pay a decent wage, bad news for you. Over long time you are likely to loose against your competitor who doesn't share your sentiment.
You may start with 100 companies of which 2 don't have any scruples and over time you will find out that these companies will take over the market along with other ones that will use this experience as learning on how to make successful business.
In the end the companies that are more aggressive win because that is just the nature of competition.
Governments are there exactly to protect individual people from aggressive predation.
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In the 1930s, a store clerk in a large city could afford to support a family in a home they would eventually own on their single income. Today, a couple with that same job would likely be in public housing and would be scraping by.
In the 1930s many homes only had icebox "refrigerators" that worked by putting Ice in the top to cool whatever was below. IMO productivity has been absorbed by getting more for your money in hidden inflation . Eg: today when you buy a phone (and internet access) you get a free encyclopedia (wikipedia), movie theater (youtube), camera, Video recorder, note pad and pen (app), alarm clock, calendar, ... get my drift? Sa…
This is a terrible argument that try's to gloss over the actual problem. Wages have been stagnant for decades while inflation is still a thing. The middle class is dying and its not because they have bigger homes and better tech. Corporate America is strangling the middle class then cries for bailouts when they hit even the tiniest speed bump(and gets it without much issue). While helping the average American becomes a massive issue.
Earlier quoted context omitted.
What is the comparative quality of life like or those two examples?
Owning any single family home (presumably with a yard) seems clearly more attractive than living in a public housing apartment complex.
A single family home from the 1930's would be illegal to build today because building codes have been expanded some for good reason, others less so.
As such it make is hard to do a apples to apple comparison
This is a good video where an economic professor explains some of that
For example, I build fences for a living. Usually I pay a guy $100/day to dig post holes, and he can dig 20 post holes in a 6 hour day.
I decide to scale up, so I buy a post hole digging machine for $20,000. This machine is pretty much point and shoot, and now lets the same guy dig 200 post holes in 6 hours. Not only has he dug 10x more post holes, but he also feels better at the end of the day because he was using a machine and not his own muscles to do the job.
How much should that guy get paid now? Is it $1000, since he is 10x as productive? Is it $100, because he is working the same amount of hours as before? Is it $80, because his job is actually easier now because I put in $20k of my own money to make it so?
I agree that minimum wages are too low but the argument that wages should track productivity is false from economical point of view, in my opinion. The argument would be true if how people contribute to economy did not change. But over time disparity in contribution to economy changed. Hundred years ago people had very similar jobs, mostly physical, manual, where each would contribute rather similarly. Nowadays compa…
What stopping you from paying much more to these poor workers?
Their salary is a cost, like any other expense, and should be kept to a minimum, and only high enough to retain talented employees according to the market rates for those positions.
That's a fundamental principle of corporate accounting.
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The consumers don't drive much. They just exist in the environment they were born into. The idea we vote with our money doesn't hold much water when the system is rigged with regulations set by the largest corporations to their own benefit. Keeping out competition. And that's just never going to stop either, so the economic system needs examined, not hoping for some sort of libertarian awakening. To make this worthwh…
"Instead of the employer/owner running your gas station, the employees that actually work it have 1 share each." This is laughably naive. The power, then, devolves to whosoever authority gets to conjure the legal definition of "actual work". How can I be that person, and how can then use my power to enrich my friends and cronies and screw BuckRogers over? After all, all employees are equal, but some employees are equ…
The authority to define what working there is decided upon by the shareholders, it's a democratic workplace. So you couldn't be that person on matter how hard you tried. That's kind of the point. To finally remove the master-slave class tension from the our places of work and replace it with democracy.
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.
This is the lump of labour fallacy. Edit: in the form, the set of jobs we have right now is fixed and will be the same for all time. The flow of money is circular. If lower-paid people had more disposable income, they would spend more on things that employ other people. Services like restaurants or haircuts or yoga classes or personal trainers or personal shoppers or life coaches, the last three of which are pretty n…
There’s some truth to what you’re saying but IMO it would take a lot more to get there than simply having a higher minimum wage.
This is a major reason why wage growth is unequal across job types.