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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

#121

Post by megaman821 »

lmilcin wrote: post #93
drran wrote: post #86

Earlier quoted context omitted.

What stopping you from paying much more to these poor workers?

What is stopping companies is competition. 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 lear…

Half the comments are suggesting that the investor class is just pocketing the extra wealth. How is that going to result in all their competitors going out of business? So I am guessing by no scruples you mean lowering the cost of goods to consumers. I am not sure how that qualifies as evil.

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

#122

Post by EForEndeavour »

ayngg wrote: post #80
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.

The value of unskilled labor is probably much lower than everyone wants to think it is in a global economy. There is no incentive to pay workers in developed countries "fair" wages when that labor can be done at a fraction of the cost in the developing world. Service sector jobs are probably hit by this because while they cant be outsourced, all the other employment going elsewhere just means they have leverage. Some…

> Some places like Canada even import developing world labor to work these jobs because they cant find local employers for the wages they offer.

This might be naive of me, but is it equally valid to say that these Canadian employers are only paying such low wages because they have access to cheap migrant labor from poorer countries who are willing to work for less pay than local labor? Without access to their existing low-wage workforce, these employers would have to raise wages until they attracted enough local labor.

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

#123

Post by gruez »

mytailorisrich wrote: post #118
lmilcin wrote: post #59

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…

The level of a minimum wage should certainly take productivity into account. Economically, all jobs that have a productivity lower than the minimum wage's total cost to employers disappear. So there is a balance to achieve and that's why low productivity is always seen as problematic (and why food delivery guys are never going to be paid a lot).

> The level of a minimum wage should certainly take productivity into account.

calculating the productivity of a job is non-trivial. A factory can't operate without assembly line. Does that mean the workers are responsible for all of the productivity? What about the engineers that designed the product? How much productivity goes to them?

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

#124

Post by lmilcin »

mytailorisrich wrote: post #118
lmilcin wrote: post #59

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…

The level of a minimum wage should certainly take productivity into account. Economically, all jobs that have a productivity lower than the minimum wage's total cost to employers disappear. So there is a balance to achieve and that's why low productivity is always seen as problematic (and why food delivery guys are never going to be paid a lot).

So you say keeping streets clean is unimportant?

I think you are blind to basic human values.

If we left it to companies to determine who gets paid and who does not we would have half of population starve to death.

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

#125

Post by drran »

mytailorisrich wrote: post #106
drran wrote: post #101

Earlier quoted context omitted.

Yep, their OVERALL productivity, as part of the system, has dropped by 25%. Isn't that obvious? They are not spherical workers in vacuum, they are part of economic system. If you open a store in the middle of a desert, your overall productivity will be zero, regardless of your productivity in the store, because no buyers, no roads, no police, no electricity, no water, etc.

The productivity of a remote worker does not depend on their location, obviously. If you WFH in NYC then move to Idaho while still working the same job then your productivity has not moved at all. If the employer tries to lower the salary it is simply because they think they can.

Remote worker is part of remote economic system, so yes.

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

#126

Post by [deleted] »

QuarterReptile wrote: post #109
lmilcin wrote: post #93

Earlier quoted context omitted.

What is stopping companies is competition. 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 lear…

>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. If you can market this "decent wage" to your customers successfully enough that they buy in, then you can continue along this trajectory. (As a side note, most people here probably wouldn't take you up on that "decent wage" retail job, in part beca…

[deleted]

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

#127

Post by frankbreetz »

BurningFrog wrote: post #120

Whenever a minimum wage argument uses 1968, you know you don't need to take it too seriously. That was an outlier year with the highest historical value. First Google graph: https://www.today.com/money/good-graph-friday-minimum-wage-w...

1968 appears to be when the correlation between minimum wage growth and productivity growth stopped. You could use any year between the late 40s and early 70s (it's hard to be precise with the chart in the article) and you would get a similar result.

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

#128

Post by pessimizer »

agitator wrote: post #44

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 req…

> Salaries go up with demand for skills.

Said while business owners are screaming about a labor shortage.

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

#129

Post by pessimizer »

eloff wrote: post #100

The productivity of minimum wage labor did not increase by that amount. It's largely unchanged. Computers did not do much to revolutionize productivity on your average minimum wage job. This is a major reason why wage growth is unequal across job types.

> The productivity of minimum wage labor did not increase by that amount.

Maybe include a link?

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

#130

Post by black_13 »

ayngg wrote: post #80
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.

The value of unskilled labor is probably much lower than everyone wants to think it is in a global economy. There is no incentive to pay workers in developed countries "fair" wages when that labor can be done at a fraction of the cost in the developing world. Service sector jobs are probably hit by this because while they cant be outsourced, all the other employment going elsewhere just means they have leverage. Some…

I get tired of hearing the term “unskilled labor” all labor is labor.
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