5 ms·

I agree that minimum wages are too low but the argument that wages should track productivity is false from economical point of view, in my opinion. The argumen

I agree that minimum wages are too low but the argument that wages should track productivity is false from economical point of view, in my opinion. The argument would be true if how people contribute to economy did not change. But over time disparity in contribution to economy changed. Hundred years ago people had very similar jobs, mostly physical, manual, where each would contribute rather similarly. Nowadays companies can produce virtual goods, sell "IP", and many other mechanisms to produce a lot with relatively little that just are not possible with traditional production lines. Now, I think the correct reason to justify better minimum wage is basic human decency and also the role of the state as servants to entire population. I think a person doing honest, important work for 8 hours a day 5 days a week should enjoy a compensation that should be enough for a basic living plus some little extra. Basic living means a decent place to live, medical care, ability to buy healthy, non-extravagant food, etc. It doesn't matter if that job is cleaning streets or being cashier at Walmart. We need streets to be cleaned and we need to buy stuff. These people doing basic jobs are unable to defend themselves and that's where the state should come in and make sure that people who do basic jobs are able to afford basic living.

drran 5y ago
What stopping you from paying much more to these poor workers?
- tyree731 5y ago
  There are people who do pay more to these sorts of workers, but that doesn't fix the broader, societal problem.
- lmilcin 5y ago
  What is stopping companies is competition. If you own a supermarket and want to pay a decent wage, bad news for you. Over long time you are likely to loose against your competitor who doesn't share your sentiment. You may start with 100 companies of which 2 don't have any scruples and over time you will find out that these companies will take over the market along with other ones that will use this experience as learning on how to make successful business. In the end the companies that are more aggressive win because that is just the nature of competition. Governments are there exactly to protect individual people from aggressive predation.
  - tbihl 5y ago
    >If you own a supermarket and want to pay a decent wage, bad news for you. Over long time you are likely to loose against your competitor who doesn't share your sentiment. If you can market this "decent wage" to your customers successfully enough that they buy in, then you can continue along this trajectory. (As a side note, most people here probably wouldn't take you up on that "decent wage" retail job, in part because they don't consider the wages very impressive. On the other hand, people who work at the "unscrupulous" grocery stores have agreed to those wages. So "decent" might have a sliding scale.)
    - lmilcin 5y ago
      That only works if your customers are willing to pay for employees to be paid better. As it is, it seems most people do not give a fuck about it and will still choose a store that is cheaper. Actually, everybody knows Walmart or Amazon employees are paid shit and they still choose cheap.
      - midasuni 5y ago
        From what I’ve seen in the U.K., Amazon shelf stackers get paid more than salaries at local inefficient independent shops
    - deleted 5y ago
      [deleted]
  - megaman821 5y ago
    Half the comments are suggesting that the investor class is just pocketing the extra wealth. How is that going to result in all their competitors going out of business? So I am guessing by no scruples you mean lowering the cost of goods to consumers. I am not sure how that qualifies as evil.
    - orwin 5y ago
      > Half the comments are suggesting that the investor class is just pocketing the extra wealth. That's were most economists, orthodox or heterodox (Neo-keynesian, MMT) agree, the capitalist class captured all productivity gains since the 70s. They disagree on the "how". And imho, you are right, they are not stealing wages, they are capturing wealth creation, it's not the same thing, and its pernicious because most of them don't understand how it works (and those who are able to try hard to not understand). I used to think people were idiot to go after the banks ten years ago, but in fact, they were intuitively way more intelligent than a "rational" me. I just did not understood "how money works".
- q1w2 5y ago
  If a worker wants to partake in the profits of the company, they should work for a public company and buy shares, or be part of a company that offers profit sharing/private shares/options/bonus compensation. Their salary is a cost, like any other expense, and should be kept to a minimum, and only high enough to retain talented employees according to the market rates for those positions. That's a fundamental principle of corporate accounting.
  - uoaei 5y ago
    This is a stringently normative claim that perpetuates the is-ought fallacy.
tick_tock_tick 5y ago
I honestly think a minimum wage is one of the worst way's to guarantee a minimum quality of life. It keeps all the downside of an employer focused system and keeps adding more and more of the governments job onto corporations. Huge parts of this mess are from government intervention in the employee/employer relationship (healthcare being taken care of by your employer was to circumvent wage freezes by Congress during WW2). We are already seeing good results from the expanded child tax credit distributed over time instead of lump summed. I'd like to see that expanded as a negative income tax credit over the full 12 months of the year. It doesn't have to be a ton of money either if the guaranteed floor is half of what's need to live it would force a lot of employers to clean up their act. One other idea I'd like to pitch is a say every 5 year moving tax credit. Something like if you move >100 miles you can claim a $5k tax credit. The main goal would be to get people out of the rut where they are too poor to move but the area they live in is too expensive to stay.
mytailorisrich 5y ago
The level of a minimum wage should certainly take productivity into account. Economically, all jobs that have a productivity lower than the minimum wage's total cost to employers disappear. So there is a balance to achieve and that's why low productivity is always seen as problematic (and why food delivery guys are never going to be paid a lot).
- gruez 5y ago
  > The level of a minimum wage should certainly take productivity into account. calculating the productivity of a job is non-trivial. A factory can't operate without assembly line. Does that mean the workers are responsible for all of the productivity? What about the engineers that designed the product? How much productivity goes to them?
- lmilcin 5y ago
  So you say keeping streets clean is unimportant? I think you are blind to basic human values. If we left it to companies to determine who gets paid and who does not we would have half of population starve to death.
jkhdigital 5y ago
If the goal is minimum standard of living, then the minimum wage is a stupid way to achieve this. Just give people money if their income is below a threshold. Why introduce this bizarre distortion in labor markets by setting a price floor on labor? I’m not going to cite anything so feel free to ignore this statement, but I’ve encountered a substantial body of evidence indicating that the minimum wage hits teen unemployment the hardest. Teens are not trying to raise families on a minimum wage, they just want some extra cash. The minimum wage kills this opportunity, and the entire justification for it has absolutely nothing to do with the teen’s situation.
- moreira 5y ago
  In the UK at least, there is a separate minimum wage for people under different ages. Teens have a much much lower minimum wage precisely because of what you just said.
eyelidlessness 5y ago
> the argument that wages should track productivity is false from economical point of view, in my opinion This view effectively negates all the other values you expressed. If people contribute N% of overall value but their remuneration tracks value at the epoch of that sort of contribution, you’re effectively ensuring people will exploit that for their own gain without equivalent contribution. And you’re ensuring that they’ll use the power that gives them to protect that disproportionate benefit.

drran 5y ago

What stopping you from paying much more to these poor workers?

tyree731 5y ago
There are people who do pay more to these sorts of workers, but that doesn't fix the broader, societal problem.
lmilcin 5y ago
What is stopping companies is competition. If you own a supermarket and want to pay a decent wage, bad news for you. Over long time you are likely to loose against your competitor who doesn't share your sentiment. You may start with 100 companies of which 2 don't have any scruples and over time you will find out that these companies will take over the market along with other ones that will use this experience as learning on how to make successful business. In the end the companies that are more aggressive win because that is just the nature of competition. Governments are there exactly to protect individual people from aggressive predation.
- tbihl 5y ago
  >If you own a supermarket and want to pay a decent wage, bad news for you. Over long time you are likely to loose against your competitor who doesn't share your sentiment. If you can market this "decent wage" to your customers successfully enough that they buy in, then you can continue along this trajectory. (As a side note, most people here probably wouldn't take you up on that "decent wage" retail job, in part because they don't consider the wages very impressive. On the other hand, people who work at the "unscrupulous" grocery stores have agreed to those wages. So "decent" might have a sliding scale.)
  - lmilcin 5y ago
    That only works if your customers are willing to pay for employees to be paid better. As it is, it seems most people do not give a fuck about it and will still choose a store that is cheaper. Actually, everybody knows Walmart or Amazon employees are paid shit and they still choose cheap.
    - midasuni 5y ago
      From what I’ve seen in the U.K., Amazon shelf stackers get paid more than salaries at local inefficient independent shops
  - deleted 5y ago
    [deleted]
- megaman821 5y ago
  Half the comments are suggesting that the investor class is just pocketing the extra wealth. How is that going to result in all their competitors going out of business? So I am guessing by no scruples you mean lowering the cost of goods to consumers. I am not sure how that qualifies as evil.
  - orwin 5y ago
    > Half the comments are suggesting that the investor class is just pocketing the extra wealth. That's were most economists, orthodox or heterodox (Neo-keynesian, MMT) agree, the capitalist class captured all productivity gains since the 70s. They disagree on the "how". And imho, you are right, they are not stealing wages, they are capturing wealth creation, it's not the same thing, and its pernicious because most of them don't understand how it works (and those who are able to try hard to not understand). I used to think people were idiot to go after the banks ten years ago, but in fact, they were intuitively way more intelligent than a "rational" me. I just did not understood "how money works".
q1w2 5y ago
If a worker wants to partake in the profits of the company, they should work for a public company and buy shares, or be part of a company that offers profit sharing/private shares/options/bonus compensation. Their salary is a cost, like any other expense, and should be kept to a minimum, and only high enough to retain talented employees according to the market rates for those positions. That's a fundamental principle of corporate accounting.
- uoaei 5y ago
  This is a stringently normative claim that perpetuates the is-ought fallacy.

tick_tock_tick 5y ago

I honestly think a minimum wage is one of the worst way's to guarantee a minimum quality of life. It keeps all the downside of an employer focused system and keeps adding more and more of the governments job onto corporations. Huge parts of this mess are from government intervention in the employee/employer relationship (healthcare being taken care of by your employer was to circumvent wage freezes by Congress during WW2). We are already seeing good results from the expanded child tax credit distributed over time instead of lump summed. I'd like to see that expanded as a negative income tax credit over the full 12 months of the year. It doesn't have to be a ton of money either if the guaranteed floor is half of what's need to live it would force a lot of employers to clean up their act. One other idea I'd like to pitch is a say every 5 year moving tax credit. Something like if you move >100 miles you can claim a $5k tax credit. The main goal would be to get people out of the rut where they are too poor to move but the area they live in is too expensive to stay.

mytailorisrich 5y ago

The level of a minimum wage should certainly take productivity into account. Economically, all jobs that have a productivity lower than the minimum wage's total cost to employers disappear. So there is a balance to achieve and that's why low productivity is always seen as problematic (and why food delivery guys are never going to be paid a lot).

gruez 5y ago
> The level of a minimum wage should certainly take productivity into account. calculating the productivity of a job is non-trivial. A factory can't operate without assembly line. Does that mean the workers are responsible for all of the productivity? What about the engineers that designed the product? How much productivity goes to them?
lmilcin 5y ago
So you say keeping streets clean is unimportant? I think you are blind to basic human values. If we left it to companies to determine who gets paid and who does not we would have half of population starve to death.

jkhdigital 5y ago

If the goal is minimum standard of living, then the minimum wage is a stupid way to achieve this. Just give people money if their income is below a threshold. Why introduce this bizarre distortion in labor markets by setting a price floor on labor? I’m not going to cite anything so feel free to ignore this statement, but I’ve encountered a substantial body of evidence indicating that the minimum wage hits teen unemployment the hardest. Teens are not trying to raise families on a minimum wage, they just want some extra cash. The minimum wage kills this opportunity, and the entire justification for it has absolutely nothing to do with the teen’s situation.

moreira 5y ago
In the UK at least, there is a separate minimum wage for people under different ages. Teens have a much much lower minimum wage precisely because of what you just said.

eyelidlessness 5y ago

> the argument that wages should track productivity is false from economical point of view, in my opinion This view effectively negates all the other values you expressed. If people contribute N% of overall value but their remuneration tracks value at the epoch of that sort of contribution, you’re effectively ensuring people will exploit that for their own gain without equivalent contribution. And you’re ensuring that they’ll use the power that gives them to protect that disproportionate benefit.