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No it would not. The average productivity of a US worker might have increased by a certain amount, but not the productivity of the minimum wage earners. If thei

No it would not. The average productivity of a US worker might have increased by a certain amount, but not the productivity of the minimum wage earners. If their productivity had gone up that much, there would be no need for a minimum wage law, the employers would simply be glad to pay them based on their productivity.

JumpCrisscross 5y ago
> If their productivity had gone up that much, there would be no need for a minimum wage law, the employers would simply be glad to pay them based on their productivity Agree with your first objection. Believe this requires more data to be sustained. Minimum-wage workers have a poor bargaining position.
standardUser 5y ago
"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.
- vrotaru 5y ago
  Why do you think the capitalist pay programmers so much?
  - omgwtfbyobbq 5y ago
    Because they don't have an alternative. If the supply of programmers was as large as the supply of minimum wage workers pay would drop significantly.
    - credit_guy 5y ago
      That is exactly what capitalism is about. Prices being driven by supply and demand. Companies certainly try to pay the minimum they can get away with, just like workers look for jobs that pay them the maximum they can find. Companies are not generous (although some claim they are), and workers aren't either. But the competition drives the prices and, in the case of jobs, the salaries. If you are productive, you'll be in demand, and you'll be paid handsomely. If you are productive but live in communist Soviet Union, you'll get very close to whatever else gets in a similar job.
      - omgwtfbyobbq 5y ago
        I think you're thinking of a Market Economy. https://en.wikipedia.org/wiki/Market_economy https://en.wikipedia.org/wiki/Market_economy Capitalism is about the private ownership of the means of production and profits. But yeah, competition for labor (and other things) via differences in wages are attributes of a market economy. Capitalism can be a healthy part of this, but sometimes it isn't. Crony capitalism for instance can provide companies the opportunity to collude so they can artificially suppress wages, which distorts the market economy for labor. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
  - ido 5y ago
    Nobody is "glad" to pay programmers that much - they pay as little as they can get away with, which for programmers happens to be a higher floor.
  - decebalus1 5y ago
    Because they 'currently' have no choice. Give it a few more decades..
- credit_guy 5y ago
  Not when we are talking about $15 vs $26 per hour. If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. PS: it looks like the federal minimum wage is still $7.25 [1], not $15. You can become richer. [1] https://www.dol.gov/general/topic/wages/minimumwage https://www.dol.gov/general/topic/wages/minimumwage
  - pydry 5y ago
    >If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. How? If their productivity is $26 / hour but their market rate is $15 / hour, by paying them $20 / hour you'll just post lower profits than companies that pay them market rate.
    - VRay 5y ago
      The workers will leave all the other companies and work for you, so those other companies will be dead in the water and/or stuck raising their own workers' pay to compete At least, that's how it was supposed to work in theory.. Now that we see people out there going for improved wages/jobs in line with good capitalist doctrine, the business owners are all screaming in rage about a "labor shortage"
      - pydry 5y ago
        I'm pretty sure Walmart would prefer to post higher profits than to drive the local hairdressers out of business and have more job applicants than they know what to do with.
      - bena 5y ago
        Yeah, but there's a soft form of collusion going on. If we live on an inescapable island of 1000 people, and I have 200 jobs, and you have 200 jobs, and Bob has 200 jobs, then the fact that you and Bob pay twice as much doesn't matter. You guys only need 400 workers, total. Those 600 other workers will be left to compete for the 200 jobs I have. I still get to name my price. And once you see that I can undercut labor costs due to this, it makes no sense for either you or Bob to continue paying twice as much as I do. And let's not pretend that if you don't have the very best workers, you can't compete. First of all, you can't identify the best. You hope to get lucky, but in reality, you're going to be paying not the best, but those adequate enough to perform the job reasonably well. COVID assistance has changed the game. Because before, the choice was to have a job or starve homeless. You'd take almost anything in desperation. Remove desperation and people stop acting desperate.
- JoeAltmaier 5y ago
  It indicates the major flaw of capitalism: It has no moral compass whatsoever. Its a vicious meat grinder. I think the comment is quite insightful, in the employers might think one thing while the realities of capitalism dictate another.
  - dnautics 5y ago
    s/capitalism/the universe/g Anyways, your statement is not true. Capitalism absolutely has a moral compass, it had the moral compass of the consumptive patterns of society; if that compass points the wrong way then either we must take a hard look at ourselves, or, think about what policies are twisting consumptive patterns to go the wrong way.... Probably a bit of both.
    - BuckRogers 5y ago
      The consumers don't drive much. They just exist in the environment they were born into. The idea we vote with our money doesn't hold much water when the system is rigged with regulations set by the largest corporations to their own benefit. Keeping out competition. And that's just never going to stop either, so the economic system needs examined, not hoping for some sort of libertarian awakening. To make this worthwhile to continue at all, this conversation first needs to clearly define capitalism. Capitalism is not the free market. Markets existed long before capitalism. Capitalism is exclusively paying people less than the value they produce, to create a profit for the employer. To rectify that economic system's moral compass, you create incentives to moving towards worker-owned enterprise. Instead of the employer/owner running your gas station, the employees that actually work it have 1 share each. To own a share you have to actively work there. That model resolves most issues with capitalism. Worker's unions also resolve it, but in a less ideal way as the tension between employer-employee still exists. Which is just a slightly kinder model as master-slave, or lord-serf. Not sure about the universe comparison. The universe is chaotic entropy as far as we know, but assigning human misery- that we actively create, to the universe is a bit much.
      - dnautics 5y ago
ranma4703 5y ago
Do you think that companies pay based on productivity, or based on the minimum amount they need to pay in order to attract workers? If the former, do you believe that if a remote worker moves from NYC to Idaho, and their employer cuts their pay by 25%, it is because their productivity has dropped by 25%? Or because their employer knows they can get away with paying them less in an area with lower cost of living / less high paying jobs?
- BobbyJo 5y ago
  > Do you think that companies pay based on productivity, or based on the minimum amount they need to pay in order to attract workers? It's both. Productivity has a very direct effect on the minimum amount they need to attract workers. If a low skilled worker can produce 100$ an hour of value, and you're paying them 10$ and hour, someone else will very quickly be willing to pay them 11$, or 12$, etc. Suddenly, you have to pay several times what you did before in order to keep your employees or attract new ones. > If the former, do you believe that if a remote worker moves from NYC to Idaho, and their employer cuts their pay by 25%, it is because their productivity has dropped by 25%? Or because their employer knows they can get away with paying them less in an area with lower cost of living / less high paying jobs? Same as the other answer. In NYC there are more companies competing for your employee, so you have to pay more to keep them. Competition in the middle of nowhere is restricted more so than in the middle of NYC.
  - pydry 5y ago
    >It's both. Productivity has a very direct effect on the minimum amount they need to attract workers. Productivity only puts a ceiling on the amount they'd be prepared to pay for a worker. It doesn't affect the minimum amount required to attract them. That's determined by competition (i.e. who else is out there) and leverage (how much they need the job). This is why business leaders lobby hard to reduce public sector wages/pensions (so private sector doesn't have to pay as much to compete for workers) and public benefits (like universal health care), which reduces worker leverage => reducing wages => increasing profits irrespective of worker productivity.
BitwiseFool 5y ago
>"the employers would simply be glad to pay them based on their productivity." Maybe for smaller companies, but any business with an HR department, investors, or board of directors is going to pocket the gains rather than distribute it out via raises. And, in my experience, they even resist raising COLA rates despite the company consistently growing year over year and inflation beginning to rise. I also assert that people wouldn't need to switch around jobs during their careers in order to get substantial pay raises if pay rose with productivity.
all2well 5y ago
This is just begging the question. How do you know wage changes equal changes in productivity?
tw04 5y ago
>the employers would simply be glad to pay them based on their productivity Based on...? What employer do you know of that just willingly offers employees raises for no reason other than "you're producing more for the company so here's some free cash"? The only role I'm aware of at most companies that directly ties your output to your income is sales, and even that can be sketchy depending on where you work and how transparent they are with the financials. Most publicly traded company's goals are to pay you as little as possible to retain you.
- joshgrib 5y ago
  Yeah this seems like a dream world, if you're a publicly traded company you have a legal obligation to pay people as little as you can, and with most companies in general the founder/owner feels like they're entitled to as much as they can take for "taking the risk"
jokethrowaway 5y ago
That's one way of seeing it and it could definitely be a factor. An increase in the workforce numbers could be another factor
runako 5y ago
This represents a fairly common misunderstanding of "productivity" as used by economists, as in this story. In economics, labor productivity is simply the output per unit of labor. A common metric is revenue per hour worked. How does this fit into the discussion here? If a company earns 10% more in inflation-adjusted currency this year than last year, but headcount has increased < 10%, by definition the staff was more productive this year than last. It's fairly easy for anyone to apply this calculation to the economy as a whole, or to a given subset. Find total revenue in period X and total revenue in a later period Y and the corresponding # of employees, and you can determine whether and how much productivity increased. Objection: "but the minimum wage earners are not more productive, everyone else is driving the productivity gains." You can run the calculation on any low-wage industry you want, you will likely see roughly similar results.
- jkhdigital 5y ago
  Yeah… for economists “productivity” is simply an aggregate quantity, kind of like “velocity of money”. It is doubtful one can say anything intelligent about “real” productivity of individual workers based on this number alone.
acchow 5y ago
When your life (and health coverage!) depends on your job and you don't have the energy or time to shop around for alternative jobs, you have little negotiating power. Your employer will not simply raise your wages just because productivity has increased without you finding some negotiating power to demand it. This is why labor unions are so helpful for the working class.
NovemberWhiskey 5y ago
I think this is probably right? If you consider positions like janitors, bussers in restaurants, hotel housekeepers (etc) and ask the question "what has happened since 1968 which would've caused productivity for these jobs to increase by 150%?", what would the answer be?
spywaregorilla 5y ago
I don't agree that companies even try to pay based on productivity, but the first point is correct. Minimum wage workers have generally not gotten anymore productive. The impact of, say, Microsoft Office has been enormous on the median white collar worker's productivity. Such gains have been much smaller on low skill manual labor tasks. Most minimum wage jobs in america are attendants, cooks, aides, etc. Not the classic factory worker failing to reap the profits of improved capital machinery.

JumpCrisscross 5y ago

> If their productivity had gone up that much, there would be no need for a minimum wage law, the employers would simply be glad to pay them based on their productivity Agree with your first objection. Believe this requires more data to be sustained. Minimum-wage workers have a poor bargaining position.

standardUser 5y ago

"employers would simply be glad to pay them based on their productivity." I honestly mean no offense, but that sentiment indicates a spectacular misunderstanding of capitalism.

vrotaru 5y ago
Why do you think the capitalist pay programmers so much?
- omgwtfbyobbq 5y ago
  Because they don't have an alternative. If the supply of programmers was as large as the supply of minimum wage workers pay would drop significantly.
  - credit_guy 5y ago
    That is exactly what capitalism is about. Prices being driven by supply and demand. Companies certainly try to pay the minimum they can get away with, just like workers look for jobs that pay them the maximum they can find. Companies are not generous (although some claim they are), and workers aren't either. But the competition drives the prices and, in the case of jobs, the salaries. If you are productive, you'll be in demand, and you'll be paid handsomely. If you are productive but live in communist Soviet Union, you'll get very close to whatever else gets in a similar job.
    - omgwtfbyobbq 5y ago
      I think you're thinking of a Market Economy. https://en.wikipedia.org/wiki/Market_economy https://en.wikipedia.org/wiki/Market_economy Capitalism is about the private ownership of the means of production and profits. But yeah, competition for labor (and other things) via differences in wages are attributes of a market economy. Capitalism can be a healthy part of this, but sometimes it isn't. Crony capitalism for instance can provide companies the opportunity to collude so they can artificially suppress wages, which distorts the market economy for labor. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
- ido 5y ago
  Nobody is "glad" to pay programmers that much - they pay as little as they can get away with, which for programmers happens to be a higher floor.
- decebalus1 5y ago
  Because they 'currently' have no choice. Give it a few more decades..
credit_guy 5y ago
Not when we are talking about $15 vs $26 per hour. If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. PS: it looks like the federal minimum wage is still $7.25 [1], not $15. You can become richer. [1] https://www.dol.gov/general/topic/wages/minimumwage https://www.dol.gov/general/topic/wages/minimumwage
- pydry 5y ago
  >If you think there are workers out there whose productivity is $26/hour, but who can't find work at more than $15/hour, then you can truly disrupt the market and hire all these workers for $20/hour and become rich. How? If their productivity is $26 / hour but their market rate is $15 / hour, by paying them $20 / hour you'll just post lower profits than companies that pay them market rate.
  - VRay 5y ago
    The workers will leave all the other companies and work for you, so those other companies will be dead in the water and/or stuck raising their own workers' pay to compete At least, that's how it was supposed to work in theory.. Now that we see people out there going for improved wages/jobs in line with good capitalist doctrine, the business owners are all screaming in rage about a "labor shortage"
    - pydry 5y ago
      I'm pretty sure Walmart would prefer to post higher profits than to drive the local hairdressers out of business and have more job applicants than they know what to do with.
    - bena 5y ago
      Yeah, but there's a soft form of collusion going on. If we live on an inescapable island of 1000 people, and I have 200 jobs, and you have 200 jobs, and Bob has 200 jobs, then the fact that you and Bob pay twice as much doesn't matter. You guys only need 400 workers, total. Those 600 other workers will be left to compete for the 200 jobs I have. I still get to name my price. And once you see that I can undercut labor costs due to this, it makes no sense for either you or Bob to continue paying twice as much as I do. And let's not pretend that if you don't have the very best workers, you can't compete. First of all, you can't identify the best. You hope to get lucky, but in reality, you're going to be paying not the best, but those adequate enough to perform the job reasonably well. COVID assistance has changed the game. Because before, the choice was to have a job or starve homeless. You'd take almost anything in desperation. Remove desperation and people stop acting desperate.
JoeAltmaier 5y ago
It indicates the major flaw of capitalism: It has no moral compass whatsoever. Its a vicious meat grinder. I think the comment is quite insightful, in the employers might think one thing while the realities of capitalism dictate another.
- dnautics 5y ago
  s/capitalism/the universe/g Anyways, your statement is not true. Capitalism absolutely has a moral compass, it had the moral compass of the consumptive patterns of society; if that compass points the wrong way then either we must take a hard look at ourselves, or, think about what policies are twisting consumptive patterns to go the wrong way.... Probably a bit of both.
  - BuckRogers 5y ago
    The consumers don't drive much. They just exist in the environment they were born into. The idea we vote with our money doesn't hold much water when the system is rigged with regulations set by the largest corporations to their own benefit. Keeping out competition. And that's just never going to stop either, so the economic system needs examined, not hoping for some sort of libertarian awakening. To make this worthwhile to continue at all, this conversation first needs to clearly define capitalism. Capitalism is not the free market. Markets existed long before capitalism. Capitalism is exclusively paying people less than the value they produce, to create a profit for the employer. To rectify that economic system's moral compass, you create incentives to moving towards worker-owned enterprise. Instead of the employer/owner running your gas station, the employees that actually work it have 1 share each. To own a share you have to actively work there. That model resolves most issues with capitalism. Worker's unions also resolve it, but in a less ideal way as the tension between employer-employee still exists. Which is just a slightly kinder model as master-slave, or lord-serf. Not sure about the universe comparison. The universe is chaotic entropy as far as we know, but assigning human misery- that we actively create, to the universe is a bit much.
    - dnautics 5y ago

ranma4703 5y ago

Do you think that companies pay based on productivity, or based on the minimum amount they need to pay in order to attract workers? If the former, do you believe that if a remote worker moves from NYC to Idaho, and their employer cuts their pay by 25%, it is because their productivity has dropped by 25%? Or because their employer knows they can get away with paying them less in an area with lower cost of living / less high paying jobs?

BobbyJo 5y ago
> Do you think that companies pay based on productivity, or based on the minimum amount they need to pay in order to attract workers? It's both. Productivity has a very direct effect on the minimum amount they need to attract workers. If a low skilled worker can produce 100$ an hour of value, and you're paying them 10$ and hour, someone else will very quickly be willing to pay them 11$, or 12$, etc. Suddenly, you have to pay several times what you did before in order to keep your employees or attract new ones. > If the former, do you believe that if a remote worker moves from NYC to Idaho, and their employer cuts their pay by 25%, it is because their productivity has dropped by 25%? Or because their employer knows they can get away with paying them less in an area with lower cost of living / less high paying jobs? Same as the other answer. In NYC there are more companies competing for your employee, so you have to pay more to keep them. Competition in the middle of nowhere is restricted more so than in the middle of NYC.
- pydry 5y ago
  >It's both. Productivity has a very direct effect on the minimum amount they need to attract workers. Productivity only puts a ceiling on the amount they'd be prepared to pay for a worker. It doesn't affect the minimum amount required to attract them. That's determined by competition (i.e. who else is out there) and leverage (how much they need the job). This is why business leaders lobby hard to reduce public sector wages/pensions (so private sector doesn't have to pay as much to compete for workers) and public benefits (like universal health care), which reduces worker leverage => reducing wages => increasing profits irrespective of worker productivity.

BitwiseFool 5y ago

>"the employers would simply be glad to pay them based on their productivity." Maybe for smaller companies, but any business with an HR department, investors, or board of directors is going to pocket the gains rather than distribute it out via raises. And, in my experience, they even resist raising COLA rates despite the company consistently growing year over year and inflation beginning to rise. I also assert that people wouldn't need to switch around jobs during their careers in order to get substantial pay raises if pay rose with productivity.

all2well 5y ago

This is just begging the question. How do you know wage changes equal changes in productivity?

tw04 5y ago

>the employers would simply be glad to pay them based on their productivity Based on...? What employer do you know of that just willingly offers employees raises for no reason other than "you're producing more for the company so here's some free cash"? The only role I'm aware of at most companies that directly ties your output to your income is sales, and even that can be sketchy depending on where you work and how transparent they are with the financials. Most publicly traded company's goals are to pay you as little as possible to retain you.

joshgrib 5y ago
Yeah this seems like a dream world, if you're a publicly traded company you have a legal obligation to pay people as little as you can, and with most companies in general the founder/owner feels like they're entitled to as much as they can take for "taking the risk"

jokethrowaway 5y ago

That's one way of seeing it and it could definitely be a factor. An increase in the workforce numbers could be another factor

runako 5y ago

This represents a fairly common misunderstanding of "productivity" as used by economists, as in this story. In economics, labor productivity is simply the output per unit of labor. A common metric is revenue per hour worked. How does this fit into the discussion here? If a company earns 10% more in inflation-adjusted currency this year than last year, but headcount has increased < 10%, by definition the staff was more productive this year than last. It's fairly easy for anyone to apply this calculation to the economy as a whole, or to a given subset. Find total revenue in period X and total revenue in a later period Y and the corresponding # of employees, and you can determine whether and how much productivity increased. Objection: "but the minimum wage earners are not more productive, everyone else is driving the productivity gains." You can run the calculation on any low-wage industry you want, you will likely see roughly similar results.

jkhdigital 5y ago
Yeah… for economists “productivity” is simply an aggregate quantity, kind of like “velocity of money”. It is doubtful one can say anything intelligent about “real” productivity of individual workers based on this number alone.

acchow 5y ago

When your life (and health coverage!) depends on your job and you don't have the energy or time to shop around for alternative jobs, you have little negotiating power. Your employer will not simply raise your wages just because productivity has increased without you finding some negotiating power to demand it. This is why labor unions are so helpful for the working class.

NovemberWhiskey 5y ago

I think this is probably right? If you consider positions like janitors, bussers in restaurants, hotel housekeepers (etc) and ask the question "what has happened since 1968 which would've caused productivity for these jobs to increase by 150%?", what would the answer be?

spywaregorilla 5y ago

I don't agree that companies even try to pay based on productivity, but the first point is correct. Minimum wage workers have generally not gotten anymore productive. The impact of, say, Microsoft Office has been enormous on the median white collar worker's productivity. Such gains have been much smaller on low skill manual labor tasks. Most minimum wage jobs in america are attendants, cooks, aides, etc. Not the classic factory worker failing to reap the profits of improved capital machinery.