Supply and Demand Does a Poor Job of Explaining Depressed Wages • Hacker News Board

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#61

Post by pedro_hab » Fri, Apr 06, 2018, 5:50 PM UTC

This is an interesting topic, but it is sad to see how people react to it.

A lot of comments here saying the whole system is broken.

An average poor man in the US probably lives better than kings lived in the past.

Food, water, food, hospitals, AC, heaters and such. These evil employers/entrepreneurs are the one creating it.

Life by every metric is getting better, can it be better? Maybe.

Now we could discuss how to improve the system, and its flaws, but this level of cynicism is hard to handle.

I guess by coming from a really poor reality it skews my view of the world.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#62

Post by crabasa » Fri, Apr 06, 2018, 5:51 PM UTC

prolikewhoa wrote: post #50

crabasa wrote: post #38

One thing worth noting is that one of the clearest paths to earning higher wages and being more successful in a career lies in networking and learning how to leverage that network. In theory, the dominant tool for this should be LinkedIn. But LinkedIn decided early on that serving professionals was less lucrative than serving companies. So the vast majority of products and capabilities that LinkedIn has shipped over…

I don't think you read the article at all. This has nothing to do about LinkedIn or networking. You have to be seriously deluded to think that LinkedIn or any other social media company, as well as general networking is the way to defeat our massive levels of income inequality. You're essentially telling bootless people to pull up their bootstraps by making friends with executives and managers. It's not that simple,…

I did read the article, but I see how the LinkedIn comment is causing you to think of white collar executives.

The fact is that informal forms of networking are how people of all cultures and income levels have always advanced their mutual interests. One of the most effective ways to combat modern poverty is to provide people with mobile devices that enable them to better communicate and build relationships over time.

I'd ask you to consider what a more people-oriented piece of software might look like that would be accessible to as many people as possible and enable very specific use case, such as "I'm looking for a new job" or "I'm willing to be a mentor" that currently get lost in the noise of all-purpose social media.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#63

Post by jonny_eh » Fri, Apr 06, 2018, 5:52 PM UTC

pedro_hab wrote: post #61

This is an interesting topic, but it is sad to see how people react to it. A lot of comments here saying the whole system is broken. An average poor man in the US probably lives better than kings lived in the past. Food, water, food, hospitals, AC, heaters and such. These evil employers/entrepreneurs are the one creating it. Life by every metric is getting better, can it be better? Maybe. Now we could discuss how to…

> Life by every metric is getting better, can it be better? Maybe.

Not with that attitude!

> Now we could discuss how to improve the system, and its flaws, but this level of cynicism is hard to handle.

Agreed, we need to identify the problems and then be optimistic about solutions.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#64

Post by randomdata » Fri, Apr 06, 2018, 5:52 PM UTC

> Supply-and-demand theory once made sense. That was before employers gained so much power.

Except power itself is determined by supply and demand. Employers have gained more power precisely because of the increased labor supply (more women, more robots, more foreign workers) that is also responsible for stagnant wages.

The power, of course, comes from the need for others to have association with that person/business. In the current market, if one employee doesn't like the terms and conditions of the job, there are many others who will be quite happy to take their spot. This gives the employer leverage as employees want to be employed.

However, if there were actually more employers than employees, then the reverse would be true. Employees would be free to treat employers however they wanted, and force them to pay more money, without repercussion since if the employer walks away, there would be many more willing to take the worker. This gives the leverage to the employees as employers want employees.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#65

Post by ChrisLomont » Fri, Apr 06, 2018, 5:53 PM UTC

toomuchtodo wrote: post #20

andy_ppp wrote: post #8

Earlier quoted context omitted.

These jobs that are worth less than $15 per hour are going to be the first to be replaced by machines so whatever happens we need a solution to give people at the bottom high(er) quality lives.

> we need a solution to give people at the bottom high(er) quality lives. Training and safety nets, funded through tax revenues. Keep in mind, the national minimum wage in Australia is currently $18.29. The entire US has been getting a discount on minimum wage labor for decades, and everyone is kicking and screaming now that those workers are having their wages ratcheted up to what they should be making when accounti…

Cost of living in AUS is decently higher than the US, and they have more exemption categories from minimum wage than the US.

Equivalently to your argument of picking the highest value you can find and claiming others getting a discount, maybe Australia is overpaying for labor, and has been getting less as a result.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#66

Post by RcouF1uZ4gsC » Fri, Apr 06, 2018, 5:53 PM UTC

There was this study that actually studied a minimum wage increase in Seattle that did not paint such a easy picture of wage hikes.

https://www.seattletimes.com/business/uw-study-finds-seattle...

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#67

Post by Frondo » Fri, Apr 06, 2018, 5:53 PM UTC

sprash wrote: post #24

Supply and demand does a great job of explaining depressed wages. We had two kinds supply shocks in the recent history in the labor market. One is women entering the workforce and the second is mass immigration. Both coincided at the end of the 60s and 70s. Exactly since then wages are not correlated to productivity anymore and are basically stagnating.

You blame women and immigrants, but a much more likely explanation is the decline of union participation in the private American workforce. They've been on the decline since the 1970s, and the more they've declined, the more that productivity has been captured by upper management and shareholders.

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#68

Post by andmarios » Fri, Apr 06, 2018, 5:54 PM UTC

pedro_hab wrote: post #61

This is an interesting topic, but it is sad to see how people react to it. A lot of comments here saying the whole system is broken. An average poor man in the US probably lives better than kings lived in the past. Food, water, food, hospitals, AC, heaters and such. These evil employers/entrepreneurs are the one creating it. Life by every metric is getting better, can it be better? Maybe. Now we could discuss how to…

Yes, you live better than people 100 years ago. But what about 40 or 20 years ago?

Is it easier for an average person to buy a home or car than it was for their parents? Do they work more or less from their parents? Is it easier to have and raise kids?

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#69

Post by [deleted] » Fri, Apr 06, 2018, 5:54 PM UTC

andrewla wrote: post #45

coldtea wrote: post #10

The world is not driven by economics (and its simplistic assumptions), it's driven by power relations and human nature. Supply and demand is not the only thing to influence the job market -- power and knowledge asymmetries can do the same thing just as well.

I think this is getting into map vs. territory issues. This is certainly the domain of economics -- the particular simplifying model used by many economists does not appear to paint a complete picture. By analogy, adapting a James Morrow quote: "Economics does have all the answers. The problem is that we don’t have all the economics". Power and knowledge asymmetries are well within the domain that economics tries to…

[deleted]

Re: Supply and Demand Does a Poor Job of Explaining Depressed Wages

#70

Post by peoplewindow » Fri, Apr 06, 2018, 5:54 PM UTC

This doesn't seem like a very good analysis.

For one, it makes sweeping generalisations about the economy. It is not true that employers always have market power and employees don't. There are lots of areas where it's inverted. The most obvious example right now is AI researchers but software in general is and has been for a long time an employees market. By the same logic that this author uses to justify minimum wages because it's hard for employees to find new jobs in some sectors, you could justify maximum wages because it's hard for employers to find new employees in some sectors. But nobody would support that - it'd be absurd.