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

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

#141

Post by megaman821 » Tue, Sep 14, 2021, 9:50 PM UTC

ihumanable wrote: post #117

oh_sigh wrote: post #96

If minimum wage workers aren't responsible for the growth in productivity, why should they be paid as if they were? Would productivity actually be increased, if business owners not only had to invest in, say, machinery to improve productivity, but also needed to pay employees more now that they were using machines that improved their productivity? For example, I build fences for a living. Usually I pay a guy $100/day…

This is the heart of capitalism right, you bought the capital, the post hole digging machine, and so you get to (this next word is being used with its technical definition, make full use of and derive benefit from (a resource), not the emotionally charged one) exploit the value generated by labor using the capital. In your scenario you didn't say how much you charge the customer, but I'll assume that it's more than y…

And if the fencing business dried up the next day, how much of that $20k debt should the laborer be responsible for? If you take the risks you end up taking the lion's share of the rewards. If you want improve the outcomes for the laborer, make it easier and less punishing for them to take risks.

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

#142

Post by Auracle » Tue, Sep 14, 2021, 9:58 PM UTC

black_13 wrote: post #130

ayngg wrote: post #80

Earlier quoted context omitted.

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.

“Unskilled labor” is labor that almost anyone can do, therefore it is worth less.

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

#143

Post by newfriend » Tue, Sep 14, 2021, 9:58 PM UTC

ihumanable wrote: post #117

oh_sigh wrote: post #96

If minimum wage workers aren't responsible for the growth in productivity, why should they be paid as if they were? Would productivity actually be increased, if business owners not only had to invest in, say, machinery to improve productivity, but also needed to pay employees more now that they were using machines that improved their productivity? For example, I build fences for a living. Usually I pay a guy $100/day…

This is the heart of capitalism right, you bought the capital, the post hole digging machine, and so you get to (this next word is being used with its technical definition, make full use of and derive benefit from (a resource), not the emotionally charged one) exploit the value generated by labor using the capital. In your scenario you didn't say how much you charge the customer, but I'll assume that it's more than y…

The laborer isn't having 95% of the value they're creating taken though. As you said, the labor went from 50% of the value created to 5%. The machine is producing most of the value.

Now factor in the laborer being easily replaced by any other unskilled laborer.

> it was really only a matter of time before the guy actually digging all the post holes your selling might ask how this arrangement is fair.

No one said it's "fair" as in all outcomes being equal. But it is "fair" in the sense that the laborer is being paid in proportion to the value they are creating vs the cost to find a replacement. If the laborer wants to improve their situation, they need to figure something out besides mindlessly digging holes someone else tells them to.

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

#144

Post by Auracle » Tue, Sep 14, 2021, 10:00 PM UTC

pessimizer wrote: post #128

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.

I’ve seen plenty of places suddenly offering $15 an hour or more, so clearly the market is responding somewhat. I’m sure most businesses were waiting to see the unemployment benefits end first though.

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

#145

Post by megaman821 » Tue, Sep 14, 2021, 10:04 PM UTC

chewzerita wrote: post #114

megaman821 wrote: post #58

Earlier quoted context omitted.

Even if this were true, it provides little in the way of an explanation. Why do 10s of thousands of companies across hundreds of industries pay their regular employees a small fraction of their worth? What is stopping someone else from coming along and paying them a larger fraction of their worth?

> Why do companies pay their regular employees a small fraction of their worth? A dead German economist might have an answer for you ;)

I am not sure Marx has much to say on why a person earning $100/hr for a company and being paid $10/hr wouldn't have his earnings potential stolen by another company willing to pay him $20/hr. $90/hr of profit is great but $80/hr in my pocket is better.

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

#146

Post by lostapathy » Tue, Sep 14, 2021, 10:08 PM UTC

jrsj wrote: post #103

orangeoxidation wrote: post #71

Earlier quoted context omitted.

> Has the productivity at the lower margin grown that much? I seriously doubt that. That's the problem. The minimum wage is a legal instrument, not just an economic process. It is designed for the lower margin to be "overpaid" over what they could get from the market otherwise. It basically says "everyone working should get at least this much of our collective production". This is what we have decided our society sho…

We’ve also completely failed to provide adequate opportunities for these workers to gain the skills and education to be able to do something more valuable with their time. That’s a problem the minimum wage can’t solve. There’s a threshold where people will just become unemployable under that model without more investment in them.

I completely agree. However, raising the minimum wage does nothing to address the skills gap at the bottom. If anything, one could argue raising the minimum wage would reduce incentive to acquire better skills and get a better job. Why put in the work to level up if those better jobs don't pay appreciably better anyway?

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

#147

Post by jkhdigital » Tue, Sep 14, 2021, 10:12 PM UTC

MisterBastahrd wrote: post #52

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…

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.

A person who services horse-drawn buggies would probably have made a nice living in 1880, not so much in 1980. There is no reason to believe that “the same job” should yield the same standard of living across time.

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

#148

Post by VRay » Tue, Sep 14, 2021, 10:12 PM UTC

bena wrote: post #92

VRay wrote: post #47

Earlier quoted context omitted.

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"

Yeah, but there's a soft form of collusion going on. If we live on an inescapable island of 1000 people, and I have 200 jobs, and you have 200 jobs, and Bob has 200 jobs, then the fact that you and Bob pay twice as much doesn't matter. You guys only need 400 workers, total. Those 600 other workers will be left to compete for the 200 jobs I have. I still get to name my price. And once you see that I can undercut labor…

Yeah, I'm really optimistic about the labor market now

This is the first time I've ever seen restaurant workers, delivery drivers, etc taking charge of their own careers the same way Silicon Valley tech workers do.

All of our laws and safety nets are designed around the idea that people will act in their own rational self-interest and hop jobs when it suits them, but I never saw that actually happening until this last year.

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

#149

Post by theonlybutlet » Tue, Sep 14, 2021, 10:14 PM UTC

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.

This does not consider that the job market is actually asymmetric. Unfortunately employers hold the cards when it comes to wages.

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

#150

Post by Factorium » Tue, Sep 14, 2021, 10:31 PM UTC

Wages started to diverge from productivity at about the same time as the USA opened up to non-Western immigrants in 1965:

https://en.wikipedia.org/wiki/Immigration_and_Nationality_Ac...

"The act greatly increased the total number of immigrants as well as the share of immigrants from Asia and Africa."

Immigrants from poor countries are easier to exploit, and will accept lower wages/standard of living, because their 'new life in the new world' is still superior to their homeland.