5 ms·

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 worke

by ed312 5y 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 5y 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 5y 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 5y 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 5y 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 5y 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.
    - nitrogen 5y ago
      I don’t buy it. It's math. If f(x)=K * g(x-1), and g(x)=L * f(x-1), you need to be very careful about choosing values for K and L.
      - Robotbeat 5y ago
        It's not math, it's a hypothetical, somewhat absurd model. There's actual empirical research on minimum wage, and it doesn't support these claims of exponential cost increase: https://noahpinion.substack.com/p/why-15-minimum-wage-is-pretty-safe https://noahpinion.substack.com/p/why-15-minimum-wage-is-pre...
        akiselev 5y ago
monkeydreams 5y 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.

by ed312 5y ago

usrusr 5y 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 5y 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 5y 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 5y 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 5y 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.
  - nitrogen 5y ago
    I don’t buy it. It's math. If f(x)=K * g(x-1), and g(x)=L * f(x-1), you need to be very careful about choosing values for K and L.
    - Robotbeat 5y ago
      It's not math, it's a hypothetical, somewhat absurd model. There's actual empirical research on minimum wage, and it doesn't support these claims of exponential cost increase: https://noahpinion.substack.com/p/why-15-minimum-wage-is-pretty-safe https://noahpinion.substack.com/p/why-15-minimum-wage-is-pre...
      - akiselev 5y ago

monkeydreams 5y 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.