5 ms·

This must be true because the bottom isn't the bottom because it just isn't worth much or has no value, it's the bottom because it's constructed that way. The i

This must be true because the bottom isn't the bottom because it just isn't worth much or has no value, it's the bottom because it's constructed that way. The idea is that there is a large pool of workers that could do the job, so you can just keep driving down conditions and wages right up to the edge where you still have enough desperate people willing to show up for it. It's essentially the other side of market forces... (which ends up in human abuse essentially)

lotsofpulp 5y ago
A large pool of workers can mop the floors, but if the same pool of workers has better options, then employers cannot drive down conditions and wages. For example, if bars and clubs lose their illegal barback labor because immigration from Mexico has slowed or stopped. Or strawberry farmers. Or people stop having 3+ kids, or even 2+ kids, and have them later in life, and the demand for people willing to change bedpans in nursing homes for $15 an hour is much higher than supply of labor.
- m0zg 5y ago
  You're missing the point. The wages will _nominally_ rise. I'm sure the politicians will beat their chest over this fact in front of the fiscally illiterate public. It's just that the prices will rise slightly faster than wages. Or not so slightly if we enter hyperinflation, which we might. That's why inflation is called a "tax on the poor". The poor and lower middle class don't have the option of putting their savings into any assets that are even remotely protected against inflation, since they don't have any savings in the first place and live hand to mouth as it is.
  - lotsofpulp 5y ago
    > It's just that the prices will rise slightly faster than wages. This is not an inevitability. Wages can rise for the bottom deciles more than prices rise. The difference would come from wages rising less or even decreasing for the upper deciles. It would also cause asset prices to rise less (or maybe even decrease) as labor expenses rise. In other words, wealth transfer, where the income/wealth gap decreases. As an illustration, someone used to getting Starbucks every day can only get it once per week now. And someone who used to never be able to buy Starbucks can get it once per week now.
    - m0zg 5y ago
      Are you Paul Krugman or something? I mean, there aren't any examples of what you're suggesting at least in the past hundred years, and yet you suggest it might happen. Might it? Sure, I might win a PowerBall jackpot next week, too. Will it? Based on historical evidence chances of it happening are nil. I'd be willing to bet hard cash on this outcome. There's also no plausible mechanism, short of a dramatic reduction in labor supply, that could drive a macroeconomic trend like this. Not to mention that even if it does happen, the prices will rise faster than wages - labor is a good chunk of the price in the first place, and you, the employer gotta pay social security off those increased wages, so bake in another 6% into that labor cost delta. Guess who will be paying for that? The consumer, AKA the working class largely. And this absolutely, under no circumstances, will cause any "wealth redistribution" from the rich to the poor. It'll be in the other direction. The rich can pay the poor in worthless QE fiat, while they hold inflation-protected assets. I've seen this shit happen with my own eyes and experienced it on my own skin in the 90s in Russia. I didn't have any money back then, but my parents had a little, and they lost pretty much all of their life's savings.
      - lotsofpulp 5y ago
        Does poor people in China moving up the socioeconomic ladder compared to the “middle class” factory workers in the US who moved down the socioeconomic ladder not count as if happening in the previous century? > There's also no plausible mechanism, short of a dramatic reduction in labor supply, that could drive a macroeconomic trend like this. Is proportion of working age population and fertility rates not going down? Of course they can be offset with immigration and automation, but will it be for the types of labor requested by the increasing proportion of old people? I do not know the future for sure, but one big variable that has changed is slowing population growth. The government can print all the fiat it wants, but it will not make the necessary labor appear out of thin air if people are not having kids at the same rate as before. Immigration and automation might blunt the impact of slowing population growth, but it may not be able to absorb all of it.
        m0zg 5y ago

lotsofpulp 5y ago

A large pool of workers can mop the floors, but if the same pool of workers has better options, then employers cannot drive down conditions and wages. For example, if bars and clubs lose their illegal barback labor because immigration from Mexico has slowed or stopped. Or strawberry farmers. Or people stop having 3+ kids, or even 2+ kids, and have them later in life, and the demand for people willing to change bedpans in nursing homes for $15 an hour is much higher than supply of labor.

m0zg 5y ago
You're missing the point. The wages will _nominally_ rise. I'm sure the politicians will beat their chest over this fact in front of the fiscally illiterate public. It's just that the prices will rise slightly faster than wages. Or not so slightly if we enter hyperinflation, which we might. That's why inflation is called a "tax on the poor". The poor and lower middle class don't have the option of putting their savings into any assets that are even remotely protected against inflation, since they don't have any savings in the first place and live hand to mouth as it is.
- lotsofpulp 5y ago
  > It's just that the prices will rise slightly faster than wages. This is not an inevitability. Wages can rise for the bottom deciles more than prices rise. The difference would come from wages rising less or even decreasing for the upper deciles. It would also cause asset prices to rise less (or maybe even decrease) as labor expenses rise. In other words, wealth transfer, where the income/wealth gap decreases. As an illustration, someone used to getting Starbucks every day can only get it once per week now. And someone who used to never be able to buy Starbucks can get it once per week now.
  - m0zg 5y ago
    Are you Paul Krugman or something? I mean, there aren't any examples of what you're suggesting at least in the past hundred years, and yet you suggest it might happen. Might it? Sure, I might win a PowerBall jackpot next week, too. Will it? Based on historical evidence chances of it happening are nil. I'd be willing to bet hard cash on this outcome. There's also no plausible mechanism, short of a dramatic reduction in labor supply, that could drive a macroeconomic trend like this. Not to mention that even if it does happen, the prices will rise faster than wages - labor is a good chunk of the price in the first place, and you, the employer gotta pay social security off those increased wages, so bake in another 6% into that labor cost delta. Guess who will be paying for that? The consumer, AKA the working class largely. And this absolutely, under no circumstances, will cause any "wealth redistribution" from the rich to the poor. It'll be in the other direction. The rich can pay the poor in worthless QE fiat, while they hold inflation-protected assets. I've seen this shit happen with my own eyes and experienced it on my own skin in the 90s in Russia. I didn't have any money back then, but my parents had a little, and they lost pretty much all of their life's savings.
    - lotsofpulp 5y ago
      Does poor people in China moving up the socioeconomic ladder compared to the “middle class” factory workers in the US who moved down the socioeconomic ladder not count as if happening in the previous century? > There's also no plausible mechanism, short of a dramatic reduction in labor supply, that could drive a macroeconomic trend like this. Is proportion of working age population and fertility rates not going down? Of course they can be offset with immigration and automation, but will it be for the types of labor requested by the increasing proportion of old people? I do not know the future for sure, but one big variable that has changed is slowing population growth. The government can print all the fiat it wants, but it will not make the necessary labor appear out of thin air if people are not having kids at the same rate as before. Immigration and automation might blunt the impact of slowing population growth, but it may not be able to absorb all of it.
      - m0zg 5y ago