12 ms·

Lately I have been feeling like the economy just broke on a fundamental level over the past year. The vast amount of money sloshing around NFTs are a symptom. A

Lately I have been feeling like the economy just broke on a fundamental level over the past year. The vast amount of money sloshing around NFTs are a symptom. And this? This is another symptom. The niche industry of "grading trading cards for collectible value" is completely overflowing. Prices for this service are skyrocketing because the demand far outstrips the availability. Meanwhile we still don't have a minimum wage that is anything like livable. $15/h was proposed as a sensible raise ten years ago from the current federal minimum of $7 and inflation has not stopped in the intervening time - online inflation calculators say the modern number would be $18.22.

ed312 6y ago
The reality is basic unskilled labor is worth about as much as it has been. At the same time, multiple new industries have sprung up and computer/ai-aided workers are vastly more productive than ever. I think a higher minimum wage could be a good "forcing function" to eliminate more low-skill jobs. The problem is, the general population is always going to have some proportion of people who can not or will not do higher skilled work. Also, normalizing WFH/remote work might help to let folks diffuse to lower cost of living areas.
- usrusr 6y ago
  How many people would Google actually need to supply humanity with targeted ads? I suspect that ultimately, most are just there to out-innovate would be upstarts that might, perhaps, take some of their pie. But this doesn't have to go on forever, there already is the precedent of Google not dying at all from utterly failing with their Facebook counter. And that's just one example. I believe that the "productivity crisis" is actually much deeper than it seems because so many parts are glossed over by zero sum games taking up some of the overcapacity.
  - lumost 6y ago
    If double click/search is a true monopoly google may not need any further work to sustain itself and could push new costs to their customers. I won’t venture a head count figure for google without R&D but it’s probably a tiny fraction of current head count.
- Robotbeat 6y ago
  On the contrary, what this means is the same “unskilled” labor is now actually worth more because it is resistant to automation. People doing automation resistant work get to share in the productivity improvements of other sectors, and that is perfectly fair. But what’s odd about your argument is that the federal minimum wage ought to be $12-13/hour if it had simply been adjusted for inflation since the late 1960s. So by that measure, we value “unskilled” labor even LESS than we did half a century ago. If we had adjusted minimum wage for productivity growth, it’d be about $21/hour right now. So I think we ought to have a nationwide federal minimum wage minimum of $12.50-15/hour, adjust it for inflation continually, but also adjust for local cost of living so that the nationwide average (average of regions) minimum wage is around $21/hour, continually adjusted each year for cost of living. And I am not worried about automation increasing unemployment over the long term. We should have targeted efforts to increase employment rate if there are periods of disemployment from disruptive automation, but we have more jobs now than we did a century or two ago in spite of two centuries of increased automation and mechanization.
  - nitrogen 6y ago
    continually adjusted each year for cost of living. One big risk here, or with any cyclically referenced benchmark, is runaway positive feedback. This can be exponential growth, oscillation, or exponentially growing oscillation. If wages are referenced to CoL, but CoL is affected by wages, you have this risk. A real example I have encountered: years ago, before an area I was living in experienced hyper demand, rent prices were fairly stable. I was able to get decent places just under $1k. My landlord was pretty chill, but said that they had to raise the rent eventually because they couldn't write off expenses (or maybe it was losses) if they were charging below the area median rent. So every year, landlords would have to increase the rent to the median, which would almost certainly raise the median (unless literally the bottom 50% of prices were exactly the same), and then they have to raise again, etc.
    - Robotbeat 6y ago
      I don’t buy it. Civil servant salaries are adjusted for cost of living, and this isn’t just the lower levels but ALL levels. Again, this is just excuse. You can’t fix a lack of housing issue by keeping wages low.
- monkeydreams 6y ago
  > At the same time, multiple new industries have sprung up and computer/ai-aided workers are vastly more productive than ever. I used to believe this but the reality appears completely the opposite. If the US economy was vastly more productive then we should see capital investment in areas with huge unmet needs. Take healthcare as an example, one of the shining beacons of AI-assisted efficiency, a colossal failure to actually address healthcare needs cheaply and effectively. Real estate is another; here we are in a world of telecommuting and automated brick-laying machines - and prices are sky-rocketing in many areas despite apparent "urban exoduses". We have high quality printing for cheap, yet the art market has reached such peaks that it has spawned a market in owning an exclusive "token" that links you (the purchaser) to an artwork in an essentially ineffective way except as a speculative asset. Exclusivity is the name of the game, and those who afford to pay for it will pay through the nose. Unskilled labour is cheap because there are a lot of skilled people also competing for it. They are competing for those low wages because the success of monetary policy has led to a situation where there is a greater return selling exclusivity and limitation than there is actually producing products to sell to everyone. Capital investment has become so overrun with cash we treat it as an expense (subscription, everything-as-a-service, etc) or as a bet in the hopes we hit a unicorn (PACS, bitcoin, etc). The slow march back to fiscal policy will, hopefully, deflate a lot of this inefficiency. One might hope that we end up in the fertile lands between the territories of the fiscal and monetary hawks, but life isn't like that.
mschuster91 6y ago
> Lately I have been feeling like the economy just broke on a fundamental level over the past year. There is something seriously broken for years now: unsustainably low interest rates drive a lot of money in desperate search for the most minuscule interest rates. Venture capital in institutional form beyond former founders who got rich and want to return the favor would not exist - certainly not millions of dollars for a company called Yo. Real estate prices both for buy and rent worldwide are only affordable for those who are mega-rich as investors are the only ones who can put up the cash, and it's beginning to go the same way in agricultural land. Stock prices, despite a disastrous raging pandemic, are at all-time highs. It's madness.
faitswulff 6y ago
Eh. Were you around for the Beanie Baby craze? Or Tickle Me Elmo? These things come and go.
- echelon 6y ago
  Pokemon cards have been around since the 90's, and rare Pokemon cards have always had appeal and commanded high value. This is less like Beanie Babies and more like the rare Magic the Gathering card economy. (Which is also a thing.) The demographics are different too. Beanie Babies was mostly a suburban mom thing that came and went, whereas Pokemon cards appeal to computer nerds - many of whom have high paying engineer salaries.
  - deleted 6y ago
    [deleted]
almost_usual 6y ago
Here’s my interpretation. Workers that lived off the “trickle down” effect of the economy lost their jobs. The govt injected money and created policy to help keep those workers with food and shelter rather than let everything crash a year ago. If you were a high skilled worker you never lost your job and you no longer had the same outlets to spend your money. You probably saved money and now have a surplus of cash. So a year later everything is frothy and real asset prices are on the rise. The Fed still doesn’t think we’re back to ‘normal’ yet so low interest rates and cash injection will continue.
- walshemj 6y ago
  Not so sure the average high skilled worker had that much of a portfolio to get to the point that they would need to put investments into fringe investments. And if you did things like proper art collectables or vintage rolex's. I did vaguely think about watches even looked at actual antique katanas or wood block print auctions.
deleted 6y ago
[deleted]
skluug 6y ago
Fyi, $15/hr in 2011 dollars would have been significantly higher than the minimum wage has ever been. The highest ever US minimum wage adjusted for inflation was $1.60 in 1968 which is $10.34 in 2011, $12.18 in 2021. https://benjaminstudebaker.com/2015/07/23/misconceptions-raising-the-minimum-wage-does-not-automatically-lead-to-inflation/ https://benjaminstudebaker.com/2015/07/23/misconceptions-rai...
- patentatt 6y ago
  This contradicts everything I’ve ever read on the topic, is there a good reason I should trust this source over others?
  - CapitalistCartr 6y ago
    This CNN article seems to support that. https://www.cnn.com/2021/02/21/politics/minimum-wage-inflation-productivity/index.html https://www.cnn.com/2021/02/21/politics/minimum-wage-inflati...
  - coryrc 6y ago
    Certain political bents like to mix "inflation" and "productivity growth" to juice the numbers. OTOH not sure I really trust inflation is balanced properly and accurately captures the cost of a certain standard of living. https://www.cnn.com/2021/02/21/politics/minimum-wage-inflation-productivity/index.html https://www.cnn.com/2021/02/21/politics/minimum-wage-inflati...
- pessimizer 6y ago
  You don't just adjust for inflation, you adjust for productivity growth. That being said, $15 is meant to be high. It's meant to give you the ability to pay for housing. For amusement value: the median house price in Jan 1968 was $163K in 2020 dollars. The median house price in 2020 was $300K. So really, minimum wage should be $24 an hour to bring you into Property Purchasing Power Parity™ with 1968.
  - coryrc 6y ago
banbanbang 6y ago
I think we are in a transition period where a new underlying economic system will be underwritten (and with it our politics system). We simply cannot continue this way.
- sdenton4 6y ago
  You're right. Overwhelmed card grading services cannot be the defining feature of the American experience; we must rise together to meet this challenge. Nine month waiting times to get a Charizard graded? What is this, Soviet Russia?
  - infoseek12 6y ago
    In Soviet Russia Charizard grades you.
    - goldenkey 6y ago
      Why was my exam paper returned as ash?
  - banbanbang 6y ago
    Wow. I was just replying to the thread. You don’t need to be an a$$hole.
  - rdtwo 6y ago
    Startup idea - computerized grading Go!
- deleted 6y ago
  [deleted]
clairity 6y ago
minimum wage is a crutch to keep the system largely the way it is and trickle some crumbs down to the lower classes to stay a revolt. instead, we need to realign incentives so that labor is on equal footing with capital (e.g., enforce transparency on the labor market). in addition, the tax and regulatory system should be overhauled to actively promote a broader distribution of capital to encourage creativity, wider risk-taking, resiliency, robustness, and fairness. we need to stop looking at simplistic crutches like the minimum wage (ubi too) as wins, as they further entrench systemic biases rather than alleviate them. don’t let moneyed interests buy us off in favor of these biases for pennies on the dollar.
jandrewrogers 6y ago
$18.22 per hour would exceed the median wage in the majority of States. I think it is safe to assert that what constitutes a "livable wage" is much lower than this number ipso facto. Not everyone lives on the west coast. There is a lot of evidence that the locale-adjusted livable wage is much lower than the numbers often thrown around. Per the US government, which tracks what people in different deciles actually spend on various things in surprising detail, the median US household has ~$1,000 in cash left over every month after all ordinary expenditures. People consistently overestimate the cost of living in large parts of the US because they only visit the very expensive parts and imagine everyone spends money like they do. I have a long-time friend, a single mother with no outside financial support, who was able to buy a condo in a decent school district in a major midwestern metro on ~$15/hr with prudent planning. It took her a long time and it isn't in a suburb where bougie tech people would want to live but she seems pretty pleased with herself. I will admit to being surprised when she told me but she'd actually figured it all out within her constraints and was able to successfully work toward that goal on that wage. The way most people talk about it, this should be literally impossible.
- rjzzleep 6y ago
  > People consistently overestimate the cost of living in large parts of the US I'm sure there are parts of the US you can get by with less than $3 wage. I think out of the 600000 homeless people a fair share manages to do that without dying either. Doesn't mean you should. > who was able to buy a condo in a decent school district in a major midwestern metro on ~$15/hr with prudent planning. ok, sure but a lot of context is missing. > It took her a long time Is it paid off? How long will it take her to pay it off? If it is how did that happen? How much was the Condo. If not, what happens if she misses one payment?
  - JamesBarney 6y ago
    My wife sold a nice condo for 50k a couple years ago. It was to a single woman who'd never made more than $10 an hour.
    - 6y ago
lastofthemojito 6y ago
> Lately I have been feeling like the economy just broke on a fundamental level over the past year. I've been thinking that recently too, although it's possible that I'm only now paying attention because I've finally become someone who has enough money to ask "what do I do with my surplus money?". That's not something I had to concern myself with 10 or 20 years ago. Some folks will rightly point out that there have always been fads, but things feel quite outlandish these days with GME/Wallstreetbets, Bitcoin, NFTs, SPACs. The stock market as a whole has done well over the past year, but it's been outpaced by stuff that feels like people counting on a greater fool. But then here I am on the sidelines, avoiding the riskiest stuff, and of course a bit envious of their returns, so who's really the fool? Shrug
- jnsie 6y ago
  You should articulated my thoughts/situation with an eerie level of precision.
- smlss_sftwr 6y ago
  Something I wonder about is whether the inflow of money into all these "assets" is indeed driven by people with buckets of excess capital, or actually from people who could use the cash in hand the most. Anecdotally I know individuals crushed by student loans/HCOL who immediately threw their stimulus checks into crypto and meme stocks with the rationale that if they lose it all, a few thousand dollars would've made no difference on their debt anyways whereas getting on the next rocketship trend early could become a life-changing sum of money. I agree something is fundamentally broken if we've reached the point where we live in a casino economy, I don't know how long it can last and the long-term potential consequences are quite concerning
  - vmception 6y ago
    This has never bothered me. Those same people could always go to an actual casino with only negative expected value games so why spend any thought on it? It seems so incongruent to suddenly care when someone decides to play a positive expected value game. The only consequence is that people still dont want to give random entrepreneurs their money if they dont have a certain pedigree. Thats the best way for money to circulate in the economy and people dont have the confidence in that to do it. So expect greater market distortions while the government still attempts to get people to do the one thing they dont want to do. People will rather buy bonds at lower and negative yields for capital preservation, or they will rather buy collectibles and crypto for capital growth. The macro trend is clear.
opo 6y ago
>...$15/h was proposed as a sensible raise ten years ago Sensible? Different states and different parts of states have vastly different costs of living. The average wage in San Francisco is going to be different than rural Alabama. The non partisan Congressional Budget Office estimated that the proposed 2021 increase to $15 would have caused a loss of 1.4 million jobs. (And obviously would have been even a bigger effect 10 years ago.) >...online inflation calculators say the modern number would be $18.22. No, that is wrong. The minimum wage started at .25 in 1938. If it had followed inflation it would be at $4.70. The last time it was adjusted was 2009. If it had been adjusted for inflation since then, it would be about $8.95.
- lotsofpulp 6y ago
  This conversation about what minimum wage should be always devolves into useless bickering about location and which inflation statistic to use. A more productive conversation would be to define the minimum quality of life that one should have, then calculate the cost of it, then divide by how many hours one “should” work to achieve that quality of life. Should a person be able to own land in a tier 1/2/3 urban/suburban area? Should a person be entitled to healthcare with a certain out of pocket maximums(gold/silver/bronze)? Should someone be able to afford daycare for infants? How much should one have saved up by retirement date (which brings up its own cost calculation for expenses during retirement)?
  - djbebs 6y ago
    >A more productive conversation would be to define the minimum quality of life that one should have, then calculate the cost of it, then divide by how many hours one “should” work to achieve that quality of life. That's not productive at all for the simple fact that you cannot legislate people into wealth. The real minimum wage is and will always be zero, because that is how much workers who are less productive than the legal minimum will get. Let's be clear as to what a minimum wage actually is, it's simply and exclusively making employing unproductive people illegal. It does not, and can not ever help low value added workers for the simple reason that all it does is prohibit them from working.
habosa 6y ago
100%, something about supply and demand fundamentally broke during this pandemic and may never return to normal.
JamesBarney 6y ago
People just started saving a lot more money because they weren't doing anything. These savings sloshed around and are finding their way into assets.
fullshark 6y ago
The past year made me realize if you are selling your time for money that means you are a part of the underclass. Full stop. Having lots of assets that appreciate in value and you can comfortably exchange them for money when you need to, that's where you should be trying to get to. This story is a sign that I'm not the only one I guess that feels that way. The r/wallstreetbets story another example.
- lotsofpulp 6y ago
  This is commonly known as “making money while you sleep”.
  - xwdv 6y ago
    A far better alternative to “making money while you sheep”. As returns on capital and assets start to vastly outperform returns on labor, you should be focusing not on what work you can do, but rather on what assets you can acquire and capitalize on.
    - abstractbarista 6y ago
      This is why I've been buying equities as fast as I can since I started working. Only been a few years but I'm loving it so far.
      - xwdv 6y ago
        Yup, feels good when you cross the million dollar mark ASAP rather than building it up toward some distant future where you retire. Feels like I have more cushion for changing times. And a million dollars ain’t even what it used to be. Feels like there’s more and more millionaires these days.
        lotsofpulp 6y ago
        This >And a million dollars ain’t even what it used to be. is a result of >Yup, feels good when you cross the million dollar mark ASAP rather than building it up toward some distant future where you retire. Feels like I have more cushion for changing times....Feels like there’s more and more millionaires these days.
aphextron 6y ago
>"Meanwhile we still don't have a minimum wage that is anything like livable. " This is because the Fed, as well as the entire US legislature, knows deep down that wages are the final "finger in the dyke" of the whole system collapsing. For wages to truly begin rising would send inflation spiraling out of control. It's only under check now because the asset owning class is reaping the benefits; not the vast majority of wage earning lower/middle class which is keeping consumer prices in check. Our entire monetary policy is now pinned on the fact that wages will lag gains of productivity and inflation, so that the almighty CPI rate can be held up as evidence for low inflation and the free money gravy train keeps rolling for the monied elite.
dragonwriter 6y ago
> Meanwhile we still don't have a minimum wage that is anything like livable. Why should the minimum wage be livable on its own? The minimum income obviously should, but why should people who can’t currently provide labor worth a “livable” wage in the market be excluded from productive engagement in the economy? The minimum wage is a crude hack to prevent economic coercion of low-negotiating-power labor by capital, but a UBI funded by progressive income taxes which treat capital income similarly to other income, would serve that purpose more effectively.
- lumost 6y ago
  Minimum wages also provide a price floor on labor. If I make 21 an hour managing a Starbucks, then I make 3x the minimum wage. I’d suspect that the owner values labor in multiples of the minimum, if the minimum wage were cut in half I’d expect the managers rate to similarly fall.
  - dragonwriter 6y ago
    > I’d suspect that the owner values labor in multiples of the minimum For low-bargaining power labor, having a progression from the minimum is probably a factor; OTOH, UBI eliminates the economic coercion that is a major contributor to low end labor having low bargaining power. For labor what the combination of oversupply and economic coercion doesn't overwhelm normal market factors, competition among purchasers should result in wages @ the marginal value to the employer added.
vmception 6y ago
Just wait till Millenials are appointing themselves to the Federal Reserve and Treasury, instead of Baby Boomers
Natsu 6y ago
A ton of money flooded into the economy via stimulus, the brighter folks realize that inflation is inevitable and rush out to every random scarce good in the hopes it will retain value. When this many people feel that NFTs or Pokemon cards might be a better store of value than, say, the USD, it probably should be giving us some kind of shock, no? And at this rate, we'll probably get that $15/hr wage soon enough. As you pointed out, the real question will be whether it actually buys more than the existing minimum wage once did.
- rdtwo 6y ago
  Pokémon cards are just another pyramid scheme. I’ve been scalping them but I don’t keep them because at some point they will Crash like beanie babies
  - Natsu 6y ago
    It's pyramid schemes all the way down, though some are backed by tax offices.
imtringued 6y ago
There has been a savings glut for the last 20 years and it just got really bad this year. Excess savings are simply dollars that are sitting around doing nothing, employing no one, investing into nothing. There are lots of sources of excess savings. Right now one of the fastest growing source is the house hold savings rate but for the last 20 years it was mostly foreign exchange reserves and corporate savings. These excess savings are almost equivalent to a contraction of the monetary supply with the caveat that in theory they could come back at any time and nobody knows when, however it's been 20 years and no sign of stopping. The Fed is conservative and only increases the money supply in a mostly reversible way either by issuing debt or buying assets which are then put on its balance sheet. Debt must be paid back, eventually the money that was issued via debt disappears and only the interest payments is freshly minted, QE (buying assets) works under the assumption that inflation will cause asset prices to go up and therefore if the Fed sells assets it will end up with a profit and the returned money is then destroyed to contract the money supply. However, interest rates aren't powerful enough to steer the economy. At some point they will hit the 0% lower bound. At 0% people will switch to cash and cash equivalents (usually treasury bonds) and therefore it becomes impossible to charge negative interest. If 0% interest rates are not enough to force people to invest their money themselves then there must be a barrier that is impeding investments to be made. The total investment rate and the total savings rate are just convenient numbers that summarize an entire economy. Surely there must be a crucial piece of information missing that explains the discrepancy. E.g. the type of savings that is currently in abundance is incompatible with the type of investments that are possible and profitable. As with all things in life this is merely something I am figuring out as I go. My first clue is venture capital and the Softbank Vision fund. VCs are chasing unicorns simply because their huge scale of capital requires a huge scale of investments. Softbank doesn't even bother with anything less than $100 million. Surely there are startups out there that need $10 million in funding to get started and can double their money in 10 years but have no growth potential beyond say $30 million revenue per year. These companies would do productive work and employ people along the way and everything would be fine but they simply don't fit into the VC model. The most famous case of a over funded company I know is Juicero. I'm sure there would have been a way to keep it running even if it takes a dozen revisions to the original juicer, but at $120 million you knew it was going to shut down before it made any money.
rland 6y ago
It's weird. I have developed the same intuition about the economy. My thought process is this: basically, any time dependent system can be modeled with a set of ODEs, no matter how many parts of the system, no matter how many feedback loops and inputs and outputs, you can still develop a reasonable model that is fundamentally just a gigantic vector of poles and zeros. When you have such a system, there is a region of stability: if there are are any positive real parts, one or more of the outputs will begin to climb exponentially towards infinity, until the whole thing comes crashing down. Pokemon Cards, houses, stocks, bitcoins, NFTs, microchips, used cars... every single output is looking like an exponential response curve to an unstable system. We are doing something fundamentally wrong, in a critical part of the system.
monkeydreams 6y ago
> Lately I have been feeling like the economy just broke on a fundamental level over the past year. We are reaping the success of monetary policy pushed to the point of absurdity. Interest rates have been pushed too low for too long - far beyond the point at which they have any real effect beyond flooding the world with more money.
shalmanese 6y ago
> Lately I have been feeling like the economy just broke on a fundamental level over the past year. I mean, yeah, take a look at this FRED chart: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL It would be more astounding if the economy didn't break.
- comprambler 6y ago
  Did you read the disclaimer at the bottom of the chart? The May 2020 slope is due to a change in bank financial reporting. Edit. Looks like they changed the meaning of what an asset is and included the word liquid. 12000 billion could account for the worth of the stock markets.
darepublic 6y ago
Should all jobs pay a minimum living wage? and if the jobs become part time then once again you are in the same situation, not getting enough hours of work. I think livable ubi is a better Kong term goal
semilattice 6y ago
@OP, I have heard many have same feeling. Although, most think it was not over the 'past year'. It just became more visible lately, as the 'trust' in USD was overextended by a decade or two. 48K $USD for a post by an 'influencer' can be added to your list. [1] Basically, the monetary value of perception appears to be orders of magnitude higher than the value of traditional things that were valued before, up-to-say, early 90s. I have heard of a view, that overall - what we are seeing today are just symptoms of the imploding trust in USD as a reserve currency of the world. And in US as a trusted guardian of that status (suggesting that there is really no better alternative, apparently, no longer enough...) There is really nothing to back up that reserver currency status of USD anymore: -- not by technical means (no Gold standard), -- not by economic superiority means ( subtract 'perception-based' & 'middleman' economy from US's contributions: financial services, ad-tech, sports & entertainment, from the economic 'booms'). -- not by superior political system (instead, a lot of money laundering, bribery to politicians by means 'book & documentary deals', stock tips, real-estate gifts, relatives on boards of directors for businesses, etc) -- not by superior law enforcement system (instead, using federal agencies to entrap opposition) -- not by superior judicial system (instead, US Supreme court choosing what standards to use for which issues) I guess, we will see if that view is right or not. May be we will be the generation that will oversee the unwinding of the empire, may be not. [1] https://insiderpaper.com/top-10-tiktok-influencers-with-highest-earnings/ https://insiderpaper.com/top-10-tiktok-influencers-with-high...

ed312 6y ago

The reality is basic unskilled labor is worth about as much as it has been. At the same time, multiple new industries have sprung up and computer/ai-aided workers are vastly more productive than ever. I think a higher minimum wage could be a good "forcing function" to eliminate more low-skill jobs. The problem is, the general population is always going to have some proportion of people who can not or will not do higher skilled work. Also, normalizing WFH/remote work might help to let folks diffuse to lower cost of living areas.

usrusr 6y ago
How many people would Google actually need to supply humanity with targeted ads? I suspect that ultimately, most are just there to out-innovate would be upstarts that might, perhaps, take some of their pie. But this doesn't have to go on forever, there already is the precedent of Google not dying at all from utterly failing with their Facebook counter. And that's just one example. I believe that the "productivity crisis" is actually much deeper than it seems because so many parts are glossed over by zero sum games taking up some of the overcapacity.
- lumost 6y ago
  If double click/search is a true monopoly google may not need any further work to sustain itself and could push new costs to their customers. I won’t venture a head count figure for google without R&D but it’s probably a tiny fraction of current head count.
Robotbeat 6y ago
On the contrary, what this means is the same “unskilled” labor is now actually worth more because it is resistant to automation. People doing automation resistant work get to share in the productivity improvements of other sectors, and that is perfectly fair. But what’s odd about your argument is that the federal minimum wage ought to be $12-13/hour if it had simply been adjusted for inflation since the late 1960s. So by that measure, we value “unskilled” labor even LESS than we did half a century ago. If we had adjusted minimum wage for productivity growth, it’d be about $21/hour right now. So I think we ought to have a nationwide federal minimum wage minimum of $12.50-15/hour, adjust it for inflation continually, but also adjust for local cost of living so that the nationwide average (average of regions) minimum wage is around $21/hour, continually adjusted each year for cost of living. And I am not worried about automation increasing unemployment over the long term. We should have targeted efforts to increase employment rate if there are periods of disemployment from disruptive automation, but we have more jobs now than we did a century or two ago in spite of two centuries of increased automation and mechanization.
- nitrogen 6y ago
  continually adjusted each year for cost of living. One big risk here, or with any cyclically referenced benchmark, is runaway positive feedback. This can be exponential growth, oscillation, or exponentially growing oscillation. If wages are referenced to CoL, but CoL is affected by wages, you have this risk. A real example I have encountered: years ago, before an area I was living in experienced hyper demand, rent prices were fairly stable. I was able to get decent places just under $1k. My landlord was pretty chill, but said that they had to raise the rent eventually because they couldn't write off expenses (or maybe it was losses) if they were charging below the area median rent. So every year, landlords would have to increase the rent to the median, which would almost certainly raise the median (unless literally the bottom 50% of prices were exactly the same), and then they have to raise again, etc.
  - Robotbeat 6y ago
    I don’t buy it. Civil servant salaries are adjusted for cost of living, and this isn’t just the lower levels but ALL levels. Again, this is just excuse. You can’t fix a lack of housing issue by keeping wages low.
monkeydreams 6y ago
> At the same time, multiple new industries have sprung up and computer/ai-aided workers are vastly more productive than ever. I used to believe this but the reality appears completely the opposite. If the US economy was vastly more productive then we should see capital investment in areas with huge unmet needs. Take healthcare as an example, one of the shining beacons of AI-assisted efficiency, a colossal failure to actually address healthcare needs cheaply and effectively. Real estate is another; here we are in a world of telecommuting and automated brick-laying machines - and prices are sky-rocketing in many areas despite apparent "urban exoduses". We have high quality printing for cheap, yet the art market has reached such peaks that it has spawned a market in owning an exclusive "token" that links you (the purchaser) to an artwork in an essentially ineffective way except as a speculative asset. Exclusivity is the name of the game, and those who afford to pay for it will pay through the nose. Unskilled labour is cheap because there are a lot of skilled people also competing for it. They are competing for those low wages because the success of monetary policy has led to a situation where there is a greater return selling exclusivity and limitation than there is actually producing products to sell to everyone. Capital investment has become so overrun with cash we treat it as an expense (subscription, everything-as-a-service, etc) or as a bet in the hopes we hit a unicorn (PACS, bitcoin, etc). The slow march back to fiscal policy will, hopefully, deflate a lot of this inefficiency. One might hope that we end up in the fertile lands between the territories of the fiscal and monetary hawks, but life isn't like that.

mschuster91 6y ago

> Lately I have been feeling like the economy just broke on a fundamental level over the past year. There is something seriously broken for years now: unsustainably low interest rates drive a lot of money in desperate search for the most minuscule interest rates. Venture capital in institutional form beyond former founders who got rich and want to return the favor would not exist - certainly not millions of dollars for a company called Yo. Real estate prices both for buy and rent worldwide are only affordable for those who are mega-rich as investors are the only ones who can put up the cash, and it's beginning to go the same way in agricultural land. Stock prices, despite a disastrous raging pandemic, are at all-time highs. It's madness.

faitswulff 6y ago

Eh. Were you around for the Beanie Baby craze? Or Tickle Me Elmo? These things come and go.

echelon 6y ago
Pokemon cards have been around since the 90's, and rare Pokemon cards have always had appeal and commanded high value. This is less like Beanie Babies and more like the rare Magic the Gathering card economy. (Which is also a thing.) The demographics are different too. Beanie Babies was mostly a suburban mom thing that came and went, whereas Pokemon cards appeal to computer nerds - many of whom have high paying engineer salaries.
- deleted 6y ago
  [deleted]

almost_usual 6y ago

Here’s my interpretation. Workers that lived off the “trickle down” effect of the economy lost their jobs. The govt injected money and created policy to help keep those workers with food and shelter rather than let everything crash a year ago. If you were a high skilled worker you never lost your job and you no longer had the same outlets to spend your money. You probably saved money and now have a surplus of cash. So a year later everything is frothy and real asset prices are on the rise. The Fed still doesn’t think we’re back to ‘normal’ yet so low interest rates and cash injection will continue.

walshemj 6y ago
Not so sure the average high skilled worker had that much of a portfolio to get to the point that they would need to put investments into fringe investments. And if you did things like proper art collectables or vintage rolex's. I did vaguely think about watches even looked at actual antique katanas or wood block print auctions.

deleted 6y ago

[deleted]

skluug 6y ago

Fyi, $15/hr in 2011 dollars would have been significantly higher than the minimum wage has ever been. The highest ever US minimum wage adjusted for inflation was $1.60 in 1968 which is $10.34 in 2011, $12.18 in 2021. https://benjaminstudebaker.com/2015/07/23/misconceptions-raising-the-minimum-wage-does-not-automatically-lead-to-inflation/ https://benjaminstudebaker.com/2015/07/23/misconceptions-rai...

patentatt 6y ago
This contradicts everything I’ve ever read on the topic, is there a good reason I should trust this source over others?
- CapitalistCartr 6y ago
  This CNN article seems to support that. https://www.cnn.com/2021/02/21/politics/minimum-wage-inflation-productivity/index.html https://www.cnn.com/2021/02/21/politics/minimum-wage-inflati...
- coryrc 6y ago
  Certain political bents like to mix "inflation" and "productivity growth" to juice the numbers. OTOH not sure I really trust inflation is balanced properly and accurately captures the cost of a certain standard of living. https://www.cnn.com/2021/02/21/politics/minimum-wage-inflation-productivity/index.html https://www.cnn.com/2021/02/21/politics/minimum-wage-inflati...
pessimizer 6y ago
You don't just adjust for inflation, you adjust for productivity growth. That being said, $15 is meant to be high. It's meant to give you the ability to pay for housing. For amusement value: the median house price in Jan 1968 was $163K in 2020 dollars. The median house price in 2020 was $300K. So really, minimum wage should be $24 an hour to bring you into Property Purchasing Power Parity™ with 1968.
- coryrc 6y ago

banbanbang 6y ago

I think we are in a transition period where a new underlying economic system will be underwritten (and with it our politics system). We simply cannot continue this way.

sdenton4 6y ago
You're right. Overwhelmed card grading services cannot be the defining feature of the American experience; we must rise together to meet this challenge. Nine month waiting times to get a Charizard graded? What is this, Soviet Russia?
- infoseek12 6y ago
  In Soviet Russia Charizard grades you.
  - goldenkey 6y ago
    Why was my exam paper returned as ash?
- banbanbang 6y ago
  Wow. I was just replying to the thread. You don’t need to be an a$$hole.
- rdtwo 6y ago
  Startup idea - computerized grading Go!
deleted 6y ago
[deleted]

clairity 6y ago

minimum wage is a crutch to keep the system largely the way it is and trickle some crumbs down to the lower classes to stay a revolt. instead, we need to realign incentives so that labor is on equal footing with capital (e.g., enforce transparency on the labor market). in addition, the tax and regulatory system should be overhauled to actively promote a broader distribution of capital to encourage creativity, wider risk-taking, resiliency, robustness, and fairness. we need to stop looking at simplistic crutches like the minimum wage (ubi too) as wins, as they further entrench systemic biases rather than alleviate them. don’t let moneyed interests buy us off in favor of these biases for pennies on the dollar.

jandrewrogers 6y ago

$18.22 per hour would exceed the median wage in the majority of States. I think it is safe to assert that what constitutes a "livable wage" is much lower than this number ipso facto. Not everyone lives on the west coast. There is a lot of evidence that the locale-adjusted livable wage is much lower than the numbers often thrown around. Per the US government, which tracks what people in different deciles actually spend on various things in surprising detail, the median US household has ~$1,000 in cash left over every month after all ordinary expenditures. People consistently overestimate the cost of living in large parts of the US because they only visit the very expensive parts and imagine everyone spends money like they do. I have a long-time friend, a single mother with no outside financial support, who was able to buy a condo in a decent school district in a major midwestern metro on ~$15/hr with prudent planning. It took her a long time and it isn't in a suburb where bougie tech people would want to live but she seems pretty pleased with herself. I will admit to being surprised when she told me but she'd actually figured it all out within her constraints and was able to successfully work toward that goal on that wage. The way most people talk about it, this should be literally impossible.

rjzzleep 6y ago
> People consistently overestimate the cost of living in large parts of the US I'm sure there are parts of the US you can get by with less than $3 wage. I think out of the 600000 homeless people a fair share manages to do that without dying either. Doesn't mean you should. > who was able to buy a condo in a decent school district in a major midwestern metro on ~$15/hr with prudent planning. ok, sure but a lot of context is missing. > It took her a long time Is it paid off? How long will it take her to pay it off? If it is how did that happen? How much was the Condo. If not, what happens if she misses one payment?
- JamesBarney 6y ago
  My wife sold a nice condo for 50k a couple years ago. It was to a single woman who'd never made more than $10 an hour.
  - 6y ago

lastofthemojito 6y ago

> Lately I have been feeling like the economy just broke on a fundamental level over the past year. I've been thinking that recently too, although it's possible that I'm only now paying attention because I've finally become someone who has enough money to ask "what do I do with my surplus money?". That's not something I had to concern myself with 10 or 20 years ago. Some folks will rightly point out that there have always been fads, but things feel quite outlandish these days with GME/Wallstreetbets, Bitcoin, NFTs, SPACs. The stock market as a whole has done well over the past year, but it's been outpaced by stuff that feels like people counting on a greater fool. But then here I am on the sidelines, avoiding the riskiest stuff, and of course a bit envious of their returns, so who's really the fool? Shrug

jnsie 6y ago
You should articulated my thoughts/situation with an eerie level of precision.
smlss_sftwr 6y ago
Something I wonder about is whether the inflow of money into all these "assets" is indeed driven by people with buckets of excess capital, or actually from people who could use the cash in hand the most. Anecdotally I know individuals crushed by student loans/HCOL who immediately threw their stimulus checks into crypto and meme stocks with the rationale that if they lose it all, a few thousand dollars would've made no difference on their debt anyways whereas getting on the next rocketship trend early could become a life-changing sum of money. I agree something is fundamentally broken if we've reached the point where we live in a casino economy, I don't know how long it can last and the long-term potential consequences are quite concerning
- vmception 6y ago
  This has never bothered me. Those same people could always go to an actual casino with only negative expected value games so why spend any thought on it? It seems so incongruent to suddenly care when someone decides to play a positive expected value game. The only consequence is that people still dont want to give random entrepreneurs their money if they dont have a certain pedigree. Thats the best way for money to circulate in the economy and people dont have the confidence in that to do it. So expect greater market distortions while the government still attempts to get people to do the one thing they dont want to do. People will rather buy bonds at lower and negative yields for capital preservation, or they will rather buy collectibles and crypto for capital growth. The macro trend is clear.

opo 6y ago

>...$15/h was proposed as a sensible raise ten years ago Sensible? Different states and different parts of states have vastly different costs of living. The average wage in San Francisco is going to be different than rural Alabama. The non partisan Congressional Budget Office estimated that the proposed 2021 increase to $15 would have caused a loss of 1.4 million jobs. (And obviously would have been even a bigger effect 10 years ago.) >...online inflation calculators say the modern number would be $18.22. No, that is wrong. The minimum wage started at .25 in 1938. If it had followed inflation it would be at $4.70. The last time it was adjusted was 2009. If it had been adjusted for inflation since then, it would be about $8.95.

lotsofpulp 6y ago
This conversation about what minimum wage should be always devolves into useless bickering about location and which inflation statistic to use. A more productive conversation would be to define the minimum quality of life that one should have, then calculate the cost of it, then divide by how many hours one “should” work to achieve that quality of life. Should a person be able to own land in a tier 1/2/3 urban/suburban area? Should a person be entitled to healthcare with a certain out of pocket maximums(gold/silver/bronze)? Should someone be able to afford daycare for infants? How much should one have saved up by retirement date (which brings up its own cost calculation for expenses during retirement)?
- djbebs 6y ago
  >A more productive conversation would be to define the minimum quality of life that one should have, then calculate the cost of it, then divide by how many hours one “should” work to achieve that quality of life. That's not productive at all for the simple fact that you cannot legislate people into wealth. The real minimum wage is and will always be zero, because that is how much workers who are less productive than the legal minimum will get. Let's be clear as to what a minimum wage actually is, it's simply and exclusively making employing unproductive people illegal. It does not, and can not ever help low value added workers for the simple reason that all it does is prohibit them from working.

habosa 6y ago

100%, something about supply and demand fundamentally broke during this pandemic and may never return to normal.

JamesBarney 6y ago

People just started saving a lot more money because they weren't doing anything. These savings sloshed around and are finding their way into assets.

fullshark 6y ago

The past year made me realize if you are selling your time for money that means you are a part of the underclass. Full stop. Having lots of assets that appreciate in value and you can comfortably exchange them for money when you need to, that's where you should be trying to get to. This story is a sign that I'm not the only one I guess that feels that way. The r/wallstreetbets story another example.

lotsofpulp 6y ago
This is commonly known as “making money while you sleep”.
- xwdv 6y ago
  A far better alternative to “making money while you sheep”. As returns on capital and assets start to vastly outperform returns on labor, you should be focusing not on what work you can do, but rather on what assets you can acquire and capitalize on.
  - abstractbarista 6y ago
    This is why I've been buying equities as fast as I can since I started working. Only been a few years but I'm loving it so far.
    - xwdv 6y ago
      Yup, feels good when you cross the million dollar mark ASAP rather than building it up toward some distant future where you retire. Feels like I have more cushion for changing times. And a million dollars ain’t even what it used to be. Feels like there’s more and more millionaires these days.
      - lotsofpulp 6y ago
        This >And a million dollars ain’t even what it used to be. is a result of >Yup, feels good when you cross the million dollar mark ASAP rather than building it up toward some distant future where you retire. Feels like I have more cushion for changing times....Feels like there’s more and more millionaires these days.

aphextron 6y ago

>"Meanwhile we still don't have a minimum wage that is anything like livable. " This is because the Fed, as well as the entire US legislature, knows deep down that wages are the final "finger in the dyke" of the whole system collapsing. For wages to truly begin rising would send inflation spiraling out of control. It's only under check now because the asset owning class is reaping the benefits; not the vast majority of wage earning lower/middle class which is keeping consumer prices in check. Our entire monetary policy is now pinned on the fact that wages will lag gains of productivity and inflation, so that the almighty CPI rate can be held up as evidence for low inflation and the free money gravy train keeps rolling for the monied elite.

dragonwriter 6y ago

> Meanwhile we still don't have a minimum wage that is anything like livable. Why should the minimum wage be livable on its own? The minimum income obviously should, but why should people who can’t currently provide labor worth a “livable” wage in the market be excluded from productive engagement in the economy? The minimum wage is a crude hack to prevent economic coercion of low-negotiating-power labor by capital, but a UBI funded by progressive income taxes which treat capital income similarly to other income, would serve that purpose more effectively.

lumost 6y ago
Minimum wages also provide a price floor on labor. If I make 21 an hour managing a Starbucks, then I make 3x the minimum wage. I’d suspect that the owner values labor in multiples of the minimum, if the minimum wage were cut in half I’d expect the managers rate to similarly fall.
- dragonwriter 6y ago
  > I’d suspect that the owner values labor in multiples of the minimum For low-bargaining power labor, having a progression from the minimum is probably a factor; OTOH, UBI eliminates the economic coercion that is a major contributor to low end labor having low bargaining power. For labor what the combination of oversupply and economic coercion doesn't overwhelm normal market factors, competition among purchasers should result in wages @ the marginal value to the employer added.

vmception 6y ago

Just wait till Millenials are appointing themselves to the Federal Reserve and Treasury, instead of Baby Boomers

Natsu 6y ago

A ton of money flooded into the economy via stimulus, the brighter folks realize that inflation is inevitable and rush out to every random scarce good in the hopes it will retain value. When this many people feel that NFTs or Pokemon cards might be a better store of value than, say, the USD, it probably should be giving us some kind of shock, no? And at this rate, we'll probably get that $15/hr wage soon enough. As you pointed out, the real question will be whether it actually buys more than the existing minimum wage once did.

rdtwo 6y ago
Pokémon cards are just another pyramid scheme. I’ve been scalping them but I don’t keep them because at some point they will Crash like beanie babies
- Natsu 6y ago
  It's pyramid schemes all the way down, though some are backed by tax offices.

imtringued 6y ago

There has been a savings glut for the last 20 years and it just got really bad this year. Excess savings are simply dollars that are sitting around doing nothing, employing no one, investing into nothing. There are lots of sources of excess savings. Right now one of the fastest growing source is the house hold savings rate but for the last 20 years it was mostly foreign exchange reserves and corporate savings. These excess savings are almost equivalent to a contraction of the monetary supply with the caveat that in theory they could come back at any time and nobody knows when, however it's been 20 years and no sign of stopping. The Fed is conservative and only increases the money supply in a mostly reversible way either by issuing debt or buying assets which are then put on its balance sheet. Debt must be paid back, eventually the money that was issued via debt disappears and only the interest payments is freshly minted, QE (buying assets) works under the assumption that inflation will cause asset prices to go up and therefore if the Fed sells assets it will end up with a profit and the returned money is then destroyed to contract the money supply. However, interest rates aren't powerful enough to steer the economy. At some point they will hit the 0% lower bound. At 0% people will switch to cash and cash equivalents (usually treasury bonds) and therefore it becomes impossible to charge negative interest. If 0% interest rates are not enough to force people to invest their money themselves then there must be a barrier that is impeding investments to be made. The total investment rate and the total savings rate are just convenient numbers that summarize an entire economy. Surely there must be a crucial piece of information missing that explains the discrepancy. E.g. the type of savings that is currently in abundance is incompatible with the type of investments that are possible and profitable. As with all things in life this is merely something I am figuring out as I go. My first clue is venture capital and the Softbank Vision fund. VCs are chasing unicorns simply because their huge scale of capital requires a huge scale of investments. Softbank doesn't even bother with anything less than $100 million. Surely there are startups out there that need $10 million in funding to get started and can double their money in 10 years but have no growth potential beyond say $30 million revenue per year. These companies would do productive work and employ people along the way and everything would be fine but they simply don't fit into the VC model. The most famous case of a over funded company I know is Juicero. I'm sure there would have been a way to keep it running even if it takes a dozen revisions to the original juicer, but at $120 million you knew it was going to shut down before it made any money.

rland 6y ago

It's weird. I have developed the same intuition about the economy. My thought process is this: basically, any time dependent system can be modeled with a set of ODEs, no matter how many parts of the system, no matter how many feedback loops and inputs and outputs, you can still develop a reasonable model that is fundamentally just a gigantic vector of poles and zeros. When you have such a system, there is a region of stability: if there are are any positive real parts, one or more of the outputs will begin to climb exponentially towards infinity, until the whole thing comes crashing down. Pokemon Cards, houses, stocks, bitcoins, NFTs, microchips, used cars... every single output is looking like an exponential response curve to an unstable system. We are doing something fundamentally wrong, in a critical part of the system.

monkeydreams 6y ago

> Lately I have been feeling like the economy just broke on a fundamental level over the past year. We are reaping the success of monetary policy pushed to the point of absurdity. Interest rates have been pushed too low for too long - far beyond the point at which they have any real effect beyond flooding the world with more money.

shalmanese 6y ago

> Lately I have been feeling like the economy just broke on a fundamental level over the past year. I mean, yeah, take a look at this FRED chart: https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL It would be more astounding if the economy didn't break.

comprambler 6y ago
Did you read the disclaimer at the bottom of the chart? The May 2020 slope is due to a change in bank financial reporting. Edit. Looks like they changed the meaning of what an asset is and included the word liquid. 12000 billion could account for the worth of the stock markets.

darepublic 6y ago

Should all jobs pay a minimum living wage? and if the jobs become part time then once again you are in the same situation, not getting enough hours of work. I think livable ubi is a better Kong term goal

semilattice 6y ago

@OP, I have heard many have same feeling. Although, most think it was not over the 'past year'. It just became more visible lately, as the 'trust' in USD was overextended by a decade or two. 48K $USD for a post by an 'influencer' can be added to your list. [1] Basically, the monetary value of perception appears to be orders of magnitude higher than the value of traditional things that were valued before, up-to-say, early 90s. I have heard of a view, that overall - what we are seeing today are just symptoms of the imploding trust in USD as a reserve currency of the world. And in US as a trusted guardian of that status (suggesting that there is really no better alternative, apparently, no longer enough...) There is really nothing to back up that reserver currency status of USD anymore: -- not by technical means (no Gold standard), -- not by economic superiority means ( subtract 'perception-based' & 'middleman' economy from US's contributions: financial services, ad-tech, sports & entertainment, from the economic 'booms'). -- not by superior political system (instead, a lot of money laundering, bribery to politicians by means 'book & documentary deals', stock tips, real-estate gifts, relatives on boards of directors for businesses, etc) -- not by superior law enforcement system (instead, using federal agencies to entrap opposition) -- not by superior judicial system (instead, US Supreme court choosing what standards to use for which issues) I guess, we will see if that view is right or not. May be we will be the generation that will oversee the unwinding of the empire, may be not. [1] https://insiderpaper.com/top-10-tiktok-influencers-with-highest-earnings/ https://insiderpaper.com/top-10-tiktok-influencers-with-high...