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This might be the case but many jobs I feel like would no longer be worth paying anyone to do at that rate. That would suggest to me that the productivity of mi

by jrsj 5y ago

This might be the case but many jobs I feel like would no longer be worth paying anyone to do at that rate. That would suggest to me that the productivity of minimum/low wage workers has not increased at the same rate as productivity generally. Which would make sense given most of that increase is attributable to technology which isn’t distributed evenly through different sectors of the economy etc.

lostapathy 5y ago
Right, this is where this sort of blanket extrapolation breaks down. Has the average productivity grown that much? Sure, I can believe that. Has the productivity at the lower margin grown that much? I seriously doubt that. The value created by stocking shelves at wal-mart just doesn't really change over time. There's a lot of labor on the lower end that is a solved problem with all the productivity wrung out of it decades ago.
- onlyrealcuzzo 5y ago
  It absolutely does! If Wal-Mart can pay more money for something, they would be /willing/ to pay it. The same stocking of shelves, they are able to capture more value from. Unskilled laborers are just not able to capture that value from Wal-Mart because there is an abundance of unskilled labor and the average person (the laborer) has to derive income from work. They can't just say, "Puh, this isn't worth it any more!" In addition, there's been a ton of improvements in productivity for warehouse workers. They are absolutely doing more work in the same amount of time. The same is true at most big businesses. That being said - at $26 an hour, there would be A LOT more pressure to eliminate more jobs.
  - celtain 5y ago
    >there is an abundance of unskilled labor and the average person (the laborer) has to derive income from work. They can't just say, "Puh, this isn't worth it any more!" This was true throughout the 2010s, but under full employment even a low-wage/"unskilled" worker can realistically go get a different job if they don't like the one they have. There's probably an Amazon warehouse nearby that would hire them at a higher wage, or a restaurant if they're willing to do a different kind of work.
- orangeoxidation 5y ago
  > Has the productivity at the lower margin grown that much? I seriously doubt that. That's the problem. The minimum wage is a legal instrument, not just an economic process. It is designed for the lower margin to be "overpaid" over what they could get from the market otherwise. It basically says "everyone working should get at least this much of our collective production". This is what we have decided our society should work like. Our collective productivity increased much faster than minimal wage, making the minimal wage worker much poorer by comparison.
  - jrsj 5y ago
    We’ve also completely failed to provide adequate opportunities for these workers to gain the skills and education to be able to do something more valuable with their time. That’s a problem the minimum wage can’t solve. There’s a threshold where people will just become unemployable under that model without more investment in them.
    - lostapathy 5y ago
      I completely agree. However, raising the minimum wage does nothing to address the skills gap at the bottom. If anything, one could argue raising the minimum wage would reduce incentive to acquire better skills and get a better job. Why put in the work to level up if those better jobs don't pay appreciably better anyway?
- tshaddox 5y ago
  Won’t the productivity of stocking shelves go up if, for example, technology makes grocery stores more profitable? Perhaps technology helps stores order locally customized inventory that will sell better (and waste less), or perhaps delivery or curbside pickup systems help stores compete better against online stores. Even packaging improvements could increase productivity. The fact that the stores themselves are physically able in practice to enjoy this increase in productivity without increasing pay to the people stocking shelves says very little about how the productivity of stocking shelves has changed.
  - jrsj 5y ago
    Up to a point this would work but there is a point where stocking shelves at all is no longer worth it when the labor reaches a certain price, and they would probably just start tossing pallets of goods directly onto the sales floor and only support self checkout. And then probably invest in robotics to automate moving the pallets around. You could have an entire Walmart ran by fewer than 10 employees
    - tshaddox 5y ago
      Sure, robots might be able to do it cheaper in the near future, but that’s unrelated to the question of whether productivity has gone up.
      - jrsj 5y ago
        There are many things that may just not get done at all though if they can’t be automated, or if automating them would be too costly. Stocking shelves in particular is probably one of those things. It’s hard to argue the labor is worth $26 an hour based on the total productivity increase of the corporation if they would just stop having you do it at all if it cost that much. The idea that an individual workers productivity is derived from the total productivity of the business isn’t entirely accurate. In the case of stocking shelves, the value is mostly aesthetics and executing a marketing strategy. The value of stocking shelves is based on the value that stocked shelves provide, which doesn’t increase linearly with the productivity of a store.
tuatoru 5y ago
This is the lump of labour fallacy. Edit: in the form, the set of jobs we have right now is fixed and will be the same for all time. The flow of money is circular. If lower-paid people had more disposable income, they would spend more on things that employ other people. Services like restaurants or haircuts or yoga classes or personal trainers or personal shoppers or life coaches, the last three of which are pretty niche right now. The people providing those services would, in turn, consume other services and products. I'm sure a lot of new services and products would appear too.
- fred_is_fred 5y ago
  If lower-paid people had more income they would be paying down debt, buying a better used car, paying for daycare, and maybe going on a trip or to. Personal shoppers and life coaches I think kick in a lot higher than you do.
  - sophacles 5y ago
    At first they would pay down debt, and buy a car that actually works, and other stuff that should have always just been available to them. Once that debt is paid off, and the car is not a constant source of worry - they have money to do those other things. For example going on a trip is the same type of "luxury" as shoppers, life coaches, etc - its spending money on something other survival.
    - SauciestGNU 5y ago
      I often think of how many ordinary working people would be able to do more than just tread water and actually begin to build some wealth if there weren't rent seekers built into nearly every necessity for sustaining human life. As a society I believe we need to re-evaluate the relationship between profit-seeking entities and public goods.
    - fred_is_fred 5y ago
      I make probably 5x US median income and I've never paid for a life coach or personal shopper and I never will. I think you may be applying some Bay Area logic to the average American.
ayngg 5y ago
The value of unskilled labor is probably much lower than everyone wants to think it is in a global economy. There is no incentive to pay workers in developed countries "fair" wages when that labor can be done at a fraction of the cost in the developing world. Service sector jobs are probably hit by this because while they cant be outsourced, all the other employment going elsewhere just means they have leverage. Some places like Canada even import developing world labor to work these jobs because they cant find local employers for the wages they offer. Most of the productivity gains have probably come from finance and technology, which would explain why those are some of the most lucrative career options now.
- jrsj 5y ago
  And what can’t be outsourced will be automated whenever it’s cost effective, and our capacity both to outsource and to automate is far greater than it was even just a couple decades ago.
- EForEndeavour 5y ago
  > Some places like Canada even import developing world labor to work these jobs because they cant find local employers for the wages they offer. This might be naive of me, but is it equally valid to say that these Canadian employers are only paying such low wages because they have access to cheap migrant labor from poorer countries who are willing to work for less pay than local labor? Without access to their existing low-wage workforce, these employers would have to raise wages until they attracted enough local labor.
  - ayngg 5y ago
    I think that is largely the case in some circumstances. Specifically in agriculture, fast food and meat packing the temporary foreign worker program is used to hire people who will work for less than what Canadians consider fair, either purely based on compensation, or a combination of compensation and qualification.
- black_13 5y ago
  I get tired of hearing the term “unskilled labor” all labor is labor.
tick_tock_tick 5y ago
The basic example is a janitor in the early 1900s is only marginally less productive then a current day one while an accountant from the same time is an order of magnitude more productive now (excel/etc).
theonlybutlet 5y ago
This does not consider that the job market is actually asymmetric. Unfortunately employers hold the cards when it comes to wages.

by jrsj 5y ago

lostapathy 5y ago

Right, this is where this sort of blanket extrapolation breaks down. Has the average productivity grown that much? Sure, I can believe that. Has the productivity at the lower margin grown that much? I seriously doubt that. The value created by stocking shelves at wal-mart just doesn't really change over time. There's a lot of labor on the lower end that is a solved problem with all the productivity wrung out of it decades ago.

onlyrealcuzzo 5y ago
It absolutely does! If Wal-Mart can pay more money for something, they would be /willing/ to pay it. The same stocking of shelves, they are able to capture more value from. Unskilled laborers are just not able to capture that value from Wal-Mart because there is an abundance of unskilled labor and the average person (the laborer) has to derive income from work. They can't just say, "Puh, this isn't worth it any more!" In addition, there's been a ton of improvements in productivity for warehouse workers. They are absolutely doing more work in the same amount of time. The same is true at most big businesses. That being said - at $26 an hour, there would be A LOT more pressure to eliminate more jobs.
- celtain 5y ago
  >there is an abundance of unskilled labor and the average person (the laborer) has to derive income from work. They can't just say, "Puh, this isn't worth it any more!" This was true throughout the 2010s, but under full employment even a low-wage/"unskilled" worker can realistically go get a different job if they don't like the one they have. There's probably an Amazon warehouse nearby that would hire them at a higher wage, or a restaurant if they're willing to do a different kind of work.
orangeoxidation 5y ago
> Has the productivity at the lower margin grown that much? I seriously doubt that. That's the problem. The minimum wage is a legal instrument, not just an economic process. It is designed for the lower margin to be "overpaid" over what they could get from the market otherwise. It basically says "everyone working should get at least this much of our collective production". This is what we have decided our society should work like. Our collective productivity increased much faster than minimal wage, making the minimal wage worker much poorer by comparison.
- jrsj 5y ago
  We’ve also completely failed to provide adequate opportunities for these workers to gain the skills and education to be able to do something more valuable with their time. That’s a problem the minimum wage can’t solve. There’s a threshold where people will just become unemployable under that model without more investment in them.
  - lostapathy 5y ago
    I completely agree. However, raising the minimum wage does nothing to address the skills gap at the bottom. If anything, one could argue raising the minimum wage would reduce incentive to acquire better skills and get a better job. Why put in the work to level up if those better jobs don't pay appreciably better anyway?
tshaddox 5y ago
Won’t the productivity of stocking shelves go up if, for example, technology makes grocery stores more profitable? Perhaps technology helps stores order locally customized inventory that will sell better (and waste less), or perhaps delivery or curbside pickup systems help stores compete better against online stores. Even packaging improvements could increase productivity. The fact that the stores themselves are physically able in practice to enjoy this increase in productivity without increasing pay to the people stocking shelves says very little about how the productivity of stocking shelves has changed.
- jrsj 5y ago
  Up to a point this would work but there is a point where stocking shelves at all is no longer worth it when the labor reaches a certain price, and they would probably just start tossing pallets of goods directly onto the sales floor and only support self checkout. And then probably invest in robotics to automate moving the pallets around. You could have an entire Walmart ran by fewer than 10 employees
  - tshaddox 5y ago
    Sure, robots might be able to do it cheaper in the near future, but that’s unrelated to the question of whether productivity has gone up.
    - jrsj 5y ago
      There are many things that may just not get done at all though if they can’t be automated, or if automating them would be too costly. Stocking shelves in particular is probably one of those things. It’s hard to argue the labor is worth $26 an hour based on the total productivity increase of the corporation if they would just stop having you do it at all if it cost that much. The idea that an individual workers productivity is derived from the total productivity of the business isn’t entirely accurate. In the case of stocking shelves, the value is mostly aesthetics and executing a marketing strategy. The value of stocking shelves is based on the value that stocked shelves provide, which doesn’t increase linearly with the productivity of a store.

tuatoru 5y ago

This is the lump of labour fallacy. Edit: in the form, the set of jobs we have right now is fixed and will be the same for all time. The flow of money is circular. If lower-paid people had more disposable income, they would spend more on things that employ other people. Services like restaurants or haircuts or yoga classes or personal trainers or personal shoppers or life coaches, the last three of which are pretty niche right now. The people providing those services would, in turn, consume other services and products. I'm sure a lot of new services and products would appear too.

fred_is_fred 5y ago
If lower-paid people had more income they would be paying down debt, buying a better used car, paying for daycare, and maybe going on a trip or to. Personal shoppers and life coaches I think kick in a lot higher than you do.
- sophacles 5y ago
  At first they would pay down debt, and buy a car that actually works, and other stuff that should have always just been available to them. Once that debt is paid off, and the car is not a constant source of worry - they have money to do those other things. For example going on a trip is the same type of "luxury" as shoppers, life coaches, etc - its spending money on something other survival.
  - SauciestGNU 5y ago
    I often think of how many ordinary working people would be able to do more than just tread water and actually begin to build some wealth if there weren't rent seekers built into nearly every necessity for sustaining human life. As a society I believe we need to re-evaluate the relationship between profit-seeking entities and public goods.
  - fred_is_fred 5y ago
    I make probably 5x US median income and I've never paid for a life coach or personal shopper and I never will. I think you may be applying some Bay Area logic to the average American.

ayngg 5y ago

The value of unskilled labor is probably much lower than everyone wants to think it is in a global economy. There is no incentive to pay workers in developed countries "fair" wages when that labor can be done at a fraction of the cost in the developing world. Service sector jobs are probably hit by this because while they cant be outsourced, all the other employment going elsewhere just means they have leverage. Some places like Canada even import developing world labor to work these jobs because they cant find local employers for the wages they offer. Most of the productivity gains have probably come from finance and technology, which would explain why those are some of the most lucrative career options now.

jrsj 5y ago
And what can’t be outsourced will be automated whenever it’s cost effective, and our capacity both to outsource and to automate is far greater than it was even just a couple decades ago.
EForEndeavour 5y ago
> Some places like Canada even import developing world labor to work these jobs because they cant find local employers for the wages they offer. This might be naive of me, but is it equally valid to say that these Canadian employers are only paying such low wages because they have access to cheap migrant labor from poorer countries who are willing to work for less pay than local labor? Without access to their existing low-wage workforce, these employers would have to raise wages until they attracted enough local labor.
- ayngg 5y ago
  I think that is largely the case in some circumstances. Specifically in agriculture, fast food and meat packing the temporary foreign worker program is used to hire people who will work for less than what Canadians consider fair, either purely based on compensation, or a combination of compensation and qualification.
black_13 5y ago
I get tired of hearing the term “unskilled labor” all labor is labor.

tick_tock_tick 5y ago

The basic example is a janitor in the early 1900s is only marginally less productive then a current day one while an accountant from the same time is an order of magnitude more productive now (excel/etc).

theonlybutlet 5y ago

This does not consider that the job market is actually asymmetric. Unfortunately employers hold the cards when it comes to wages.