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It sounds like we've been fudging the numbers to paint a rosier picture of the economy in hopes that would encourage spending by consumers and, in turn, investo

It sounds like we've been fudging the numbers to paint a rosier picture of the economy in hopes that would encourage spending by consumers and, in turn, investors. But it seems the public has not been fooled, probably because that rosy picture doesn't match their bank statements. My question is: how do we encourage wage growth when it doesn't appear to respond to the cost of living? Has free trade undermined the American worker's ability to negotiate a more favorable salary? Are we living in 'take what you can get' economy?

sokoloff 11y ago
You encourage wage growth by increasing employee productivity. The more customer value a worker creates, the more an employer can pay them. Trying to increase wages without increasing the value created leads to unstable employment conditions and eventually unemployment if the situation is not profitable for the business on a risk-adjusted basis. "It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages." - Henry Ford
- zardo 11y ago
  Productivity is not directly linked to wages. The cash register didn't raise wages for cashiers, it increased productivity, but it also lowered skill requirements which increased the supply of potential cashiers and put a downward pressure on their wages.
  - sokoloff 11y ago
    For the person who is now able to be a cashier and previously unable to be a cashier, the cash register likely put upward pressure on that individual's wage earning ability.
    - ZoeZoeBee 11y ago
      Or and more likely, the cash register allowed more people who could not previously be cashiers due to poor math skills or whatever else, become cashiers. This in-turn increases the supply of cashiers, while making the job easier, ultimately leading to downward pressure on cashiers' wages. Which brings us to where we are today, the lack of need for any cashier, please tell me you've used a You-Scan before. What do the wages look like for the cashiers who have been replaced by robot and self-service?
      - sokoloff 11y ago
        Of course I have, and in many cases, I prefer the You-Scan. This is just an application of the general principal that if the most valuable skills you can bring to a job are trivially replaced by an inexpensive self-service kiosk, you have terrible wage prospects. I don't see any reasonable way around that. Raise the minimum wage and you'll see a lot more robots and kiosks.
        intopieces 11y ago
        >Raise the minimum wage and you'll see a lot more robots and kiosks. Good. Humans have no business doing what robots can do anyway. The question remains: How do we adapt the humans who lost their jobs? And before you write them off as 'unskilled,' remember that your job could just as easily be next.
        sokoloff 11y ago
        With a minimum wage high enough that there is nothing they can do that's worth that amount in the employment market, their options are to be unemployed or to work as an entrepreneur, independent contractor, or some other arrangement (possible quasi or not legal) that works around the minimum wage law. In that way, they can use the skills and effort they have to a productive end, even if no one will bid the minimum wage rate for those services. If the job I'm doing now is "next" (I don't think the job is "mine" in any possessive sense), I would have to step back and figure out what my next best option is. I'm quite sure that absent the utter collapse of civilization, that I'll figure something out and be fine.
    - zardo 11y ago
      Take a look at that graph: http://www.theatlantic.com/business/archive/2015/02/why-the-gap-between-worker-pay-and-productivity-is-so-problematic/385931/ http://www.theatlantic.com/business/archive/2015/02/why-the-... Productivity is not the problem, productivity is one metric the US economy has been doing great on.

sokoloff 11y ago

You encourage wage growth by increasing employee productivity. The more customer value a worker creates, the more an employer can pay them. Trying to increase wages without increasing the value created leads to unstable employment conditions and eventually unemployment if the situation is not profitable for the business on a risk-adjusted basis. "It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages." - Henry Ford

zardo 11y ago
Productivity is not directly linked to wages. The cash register didn't raise wages for cashiers, it increased productivity, but it also lowered skill requirements which increased the supply of potential cashiers and put a downward pressure on their wages.
- sokoloff 11y ago
  For the person who is now able to be a cashier and previously unable to be a cashier, the cash register likely put upward pressure on that individual's wage earning ability.
  - ZoeZoeBee 11y ago
    Or and more likely, the cash register allowed more people who could not previously be cashiers due to poor math skills or whatever else, become cashiers. This in-turn increases the supply of cashiers, while making the job easier, ultimately leading to downward pressure on cashiers' wages. Which brings us to where we are today, the lack of need for any cashier, please tell me you've used a You-Scan before. What do the wages look like for the cashiers who have been replaced by robot and self-service?
    - sokoloff 11y ago
      Of course I have, and in many cases, I prefer the You-Scan. This is just an application of the general principal that if the most valuable skills you can bring to a job are trivially replaced by an inexpensive self-service kiosk, you have terrible wage prospects. I don't see any reasonable way around that. Raise the minimum wage and you'll see a lot more robots and kiosks.
      - intopieces 11y ago
        >Raise the minimum wage and you'll see a lot more robots and kiosks. Good. Humans have no business doing what robots can do anyway. The question remains: How do we adapt the humans who lost their jobs? And before you write them off as 'unskilled,' remember that your job could just as easily be next.
        sokoloff 11y ago
        With a minimum wage high enough that there is nothing they can do that's worth that amount in the employment market, their options are to be unemployed or to work as an entrepreneur, independent contractor, or some other arrangement (possible quasi or not legal) that works around the minimum wage law. In that way, they can use the skills and effort they have to a productive end, even if no one will bid the minimum wage rate for those services. If the job I'm doing now is "next" (I don't think the job is "mine" in any possessive sense), I would have to step back and figure out what my next best option is. I'm quite sure that absent the utter collapse of civilization, that I'll figure something out and be fine.
  - zardo 11y ago
    Take a look at that graph: http://www.theatlantic.com/business/archive/2015/02/why-the-gap-between-worker-pay-and-productivity-is-so-problematic/385931/ http://www.theatlantic.com/business/archive/2015/02/why-the-... Productivity is not the problem, productivity is one metric the US economy has been doing great on.