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"If you have a job that anybody can do, you aren't going to get paid very much..because its value is low." This is not how labor markets work. I think the inap

by aphyr 16y ago

"If you have a job that anybody can do, you aren't going to get paid very much..because its value is low." This is not how labor markets work. I think the inappropriate generalization of a HN reader's experience to the working poor in general is aptly addressed by other responders.

rick888 16y ago
"This is not how labor markets work." It's exactly how labor markets work (without the unions inflating wages). The reason Mcdonalds workers are paid a little above minimum wage is because the skill required to do those types of jobs is low. Since it is low, the supply of applicants is huge and the company knows that if you aren't willing to work for them for that wage, they will almost certainly find someone who will. When I say value, I should have said wage, because you and many others seem to be taking the defensive. "I think the inappropriate generalization of a HN reader's experience to the working poor in general is aptly addressed by other responders." If you have a low paying job (and you can physically and mentally work), why aren't you trying to find a better one? I really want to know. All I hear are excuses or things that can be changed.
- aphyr 16y ago
  I understood your point the first time. I still respectfully disagree, but perhaps someone with more understanding of macro can step in here. In idealized, infinitely large, rational labor markets, wages are still driven by the interaction of supply and demand. Even in this model, you are ignoring the other half of the equilibrium--that only where employment is available and desired are wages available. It is perfectly possible for large pools of skilled workers to fail to find employment because of insufficient employment opportunity (as an example, consider the tech crash, or Detroit), or for jobs which do not require special skills to command astronomical prices as a result of insufficient labor supply (e.g. Alaskan fisheries or nursing). Of course, the market is finite. This makes it possible for group pressures to distort the wage price point. You correctly identified one half of these pressures: unionization. The other half is employer pressure, in which a company dominates enough of the job pool that it can set uncompetitive wages. That's a form of monopoly, and is why some folks get really angry about Walmart showing up in their town. Oh, and government regulatory pressure is acting on both sides of this dynamic in various ways, from tax structures to discrimination and safety laws. It gets worse, actually, because perfect information is not available reflecting the market state, there's a significant lag time between training and employment, and people were never rational actors to begin with. If this is unconvincing, I encourage you to consider the constraint of social capital.

by aphyr 16y ago

rick888 16y ago

"This is not how labor markets work." It's exactly how labor markets work (without the unions inflating wages). The reason Mcdonalds workers are paid a little above minimum wage is because the skill required to do those types of jobs is low. Since it is low, the supply of applicants is huge and the company knows that if you aren't willing to work for them for that wage, they will almost certainly find someone who will. When I say value, I should have said wage, because you and many others seem to be taking the defensive. "I think the inappropriate generalization of a HN reader's experience to the working poor in general is aptly addressed by other responders." If you have a low paying job (and you can physically and mentally work), why aren't you trying to find a better one? I really want to know. All I hear are excuses or things that can be changed.

aphyr 16y ago
I understood your point the first time. I still respectfully disagree, but perhaps someone with more understanding of macro can step in here. In idealized, infinitely large, rational labor markets, wages are still driven by the interaction of supply and demand. Even in this model, you are ignoring the other half of the equilibrium--that only where employment is available and desired are wages available. It is perfectly possible for large pools of skilled workers to fail to find employment because of insufficient employment opportunity (as an example, consider the tech crash, or Detroit), or for jobs which do not require special skills to command astronomical prices as a result of insufficient labor supply (e.g. Alaskan fisheries or nursing). Of course, the market is finite. This makes it possible for group pressures to distort the wage price point. You correctly identified one half of these pressures: unionization. The other half is employer pressure, in which a company dominates enough of the job pool that it can set uncompetitive wages. That's a form of monopoly, and is why some folks get really angry about Walmart showing up in their town. Oh, and government regulatory pressure is acting on both sides of this dynamic in various ways, from tax structures to discrimination and safety laws. It gets worse, actually, because perfect information is not available reflecting the market state, there's a significant lag time between training and employment, and people were never rational actors to begin with. If this is unconvincing, I encourage you to consider the constraint of social capital.