5 ms·

We should consider thinking of those jobs not as lowest skill, but jobs where the workers have the lowest negotiating power.

by dv_dt 5y ago

mlyle 5y ago
They go hand in hand. Why do the workers have the lowest negotiating power in these jobs? It's because they are the most easily replaced and the net benefit from employing them is smallest. [There are some edge cases, where a field is swamped from people doing the job for the love of it... But this is not the typical case.]
- ethbr0 5y ago
  Isn't the whole point of the minimum wage that the federal / state / local governments are the negotiator of last resort? I.e. people with minimum wage jobs would be paid even less, but for the government using its power to negotiate for them
  - mlyle 5y ago
    > Isn't the whole point of the minimum wage that the federal / state / local governments are the negotiator of last resort? Yes. And it's a necessary thing to have. On the other hand... if someone is doing work that returns $15.50/hour on average to the business, and is employed at $10/hour, raising the minimum wage to $15/hour doesn't get that person a raise: it gets them laid off. The things that IMO really help the fundamentals are: * Raising the demand for low-skill labor (e.g. economic growth above productivity improvements) * Raising the average skill level of the workforce, and/or * Reducing the supply of labor.
    - vkou 5y ago
      > On the other hand... if someone is doing work that returns $15.50/hour on average to the business, and is employed at $10/hour, raising the minimum wage to $15/hour doesn't get that person a raise: it gets them laid off. No, what it does is it causes prices to go up, which are amortized across all of society - between both people who are paid $15/hour, and people who are paid $150/hour. On average, it is a small wealth transfer from the average person to the working poor.
      - mlyle 5y ago
        > No, what it does is it causes prices to go up, which are amortized across all of society It does both of these things. Some jobs are lost and some prices go up. Some tasks are better off outsourced, automated, or not even done at all as the floor price on labor increases. Raising minimum wages here hurts. Shortening the work week helps. The demand for some tasks is inelastic but easily performed by many different people. The price of these tasks increases in proportion to minimum wage. Raising minimum wages here helps the employees, and shortening the work week is a small hurt. Some tasks already have an equilibrium price well above minimum wage due to a supply limitation of the capable labor. Raising minimum wages here is relatively neutral. Shortening the work week should increase compensation here and increase the motivation for employers to find ways to bring more lower skill people into the field. Most things are somewhere between these extremes.
      - adolph 5y ago
        > No, what it does is it causes prices to go up, which are amortized across all of society - between both people who are paid $15/hour, and people who are paid $150/hour. Do people who are paid 10x necessarily consume 10x over a person paid minimum wage? If raising the minimum wage causes across the board price increases (aka inflation), then those whose income is lower are affected more since a higher percentage of their income is spent on essential consumption (food, water, shelter). If the operational concept is "small wealth transfer" to the folks earning the lowest income using inflation as a stealth tax then it is a highly regressive tax. Using polling data for 31,869 households in thirty-eight countries and allowing for country effects, we show that the poor are more likely than the rich to mention inflation as a top national concern. https://www.jstor.org/stable/2673879 https://www.jstor.org/stable/2673879
        vkou 5y ago
        > Do people who are paid 10x necessarily consume 10x over a person paid minimum wage? Even if their consumption was 1x, my point would still stand. Most people aren't earning minimum wage, nor are their salaries affected by minimum wage increases. This means that the cost of most products does not increase as minimum wages increase. Minimum wage increase money comes from somewhere, and since ~everyone relies on minimum wage workers, that means that ~everyone pays for that wage increase. If you take a dollar away from 100 people, and split half the resulting money between the 10 poorest in that group, and the other half between the next 20, it's a regressive tax, with a progressive benefit that has a net benefit for the poorest. Minimum wage increases work the same way. The rich lose very little, the middle class lose some, the poor win. Are there better ways of structuring this sort of thing? Theretically yes, but practically, the rich are really, really good at protecting themselves from wealth redistribution. If you're going to hold the poor hostage to them, you're never going to get anything done.

We should consider thinking of those jobs not as lowest skill, but jobs where the workers have the lowest negotiating power.

by dv_dt 5y ago

We should consider thinking of those jobs not as lowest skill, but jobs where the workers have the lowest negotiating power.

mlyle 5y ago

They go hand in hand. Why do the workers have the lowest negotiating power in these jobs? It's because they are the most easily replaced and the net benefit from employing them is smallest. [There are some edge cases, where a field is swamped from people doing the job for the love of it... But this is not the typical case.]

ethbr0 5y ago
Isn't the whole point of the minimum wage that the federal / state / local governments are the negotiator of last resort? I.e. people with minimum wage jobs would be paid even less, but for the government using its power to negotiate for them
- mlyle 5y ago
  > Isn't the whole point of the minimum wage that the federal / state / local governments are the negotiator of last resort? Yes. And it's a necessary thing to have. On the other hand... if someone is doing work that returns $15.50/hour on average to the business, and is employed at $10/hour, raising the minimum wage to $15/hour doesn't get that person a raise: it gets them laid off. The things that IMO really help the fundamentals are: * Raising the demand for low-skill labor (e.g. economic growth above productivity improvements) * Raising the average skill level of the workforce, and/or * Reducing the supply of labor.
  - vkou 5y ago
    > On the other hand... if someone is doing work that returns $15.50/hour on average to the business, and is employed at $10/hour, raising the minimum wage to $15/hour doesn't get that person a raise: it gets them laid off. No, what it does is it causes prices to go up, which are amortized across all of society - between both people who are paid $15/hour, and people who are paid $150/hour. On average, it is a small wealth transfer from the average person to the working poor.
    - mlyle 5y ago
      > No, what it does is it causes prices to go up, which are amortized across all of society It does both of these things. Some jobs are lost and some prices go up. Some tasks are better off outsourced, automated, or not even done at all as the floor price on labor increases. Raising minimum wages here hurts. Shortening the work week helps. The demand for some tasks is inelastic but easily performed by many different people. The price of these tasks increases in proportion to minimum wage. Raising minimum wages here helps the employees, and shortening the work week is a small hurt. Some tasks already have an equilibrium price well above minimum wage due to a supply limitation of the capable labor. Raising minimum wages here is relatively neutral. Shortening the work week should increase compensation here and increase the motivation for employers to find ways to bring more lower skill people into the field. Most things are somewhere between these extremes.
    - adolph 5y ago
      > No, what it does is it causes prices to go up, which are amortized across all of society - between both people who are paid $15/hour, and people who are paid $150/hour. Do people who are paid 10x necessarily consume 10x over a person paid minimum wage? If raising the minimum wage causes across the board price increases (aka inflation), then those whose income is lower are affected more since a higher percentage of their income is spent on essential consumption (food, water, shelter). If the operational concept is "small wealth transfer" to the folks earning the lowest income using inflation as a stealth tax then it is a highly regressive tax. Using polling data for 31,869 households in thirty-eight countries and allowing for country effects, we show that the poor are more likely than the rich to mention inflation as a top national concern. https://www.jstor.org/stable/2673879 https://www.jstor.org/stable/2673879
      - vkou 5y ago
        > Do people who are paid 10x necessarily consume 10x over a person paid minimum wage? Even if their consumption was 1x, my point would still stand. Most people aren't earning minimum wage, nor are their salaries affected by minimum wage increases. This means that the cost of most products does not increase as minimum wages increase. Minimum wage increase money comes from somewhere, and since ~everyone relies on minimum wage workers, that means that ~everyone pays for that wage increase. If you take a dollar away from 100 people, and split half the resulting money between the 10 poorest in that group, and the other half between the next 20, it's a regressive tax, with a progressive benefit that has a net benefit for the poorest. Minimum wage increases work the same way. The rich lose very little, the middle class lose some, the poor win. Are there better ways of structuring this sort of thing? Theretically yes, but practically, the rich are really, really good at protecting themselves from wealth redistribution. If you're going to hold the poor hostage to them, you're never going to get anything done.