5 ms·

This is a symptom of government policy. High employment taxes, workplace liability, and an inefficiently high minimum wage, combine to create an artificial dem

by Newgy 15y ago

This is a symptom of government policy. High employment taxes, workplace liability, and an inefficiently high minimum wage, combine to create an artificial demand constraint in the labor market. Businesses substitute technology for workers, from salad bars to checkout kiosks.

rubashov 15y ago
Yeah, the article was a little ridiculous for not mentioning this. The impact of obamacare and the ever increasing risk of getting sued as an employer are huge and growing disincentives to hire low skill labor.
ShabbyDoo 15y ago
Heck, sales and income taxes contribute to this. Why is Home Depot so busy on weekends with DIY-ers? Shouldn't an amateur's effective "wage" for finishing his basement be incredibly low compared to a professional with knowledge/tools/etc.? So low that he/she would gladly work a few more hours at the office rather than spending his weekend figuring out how to lay tile? The problem is that I am not taxed on my "earnings" from the weekend work I might perform around the house, but a professional is (unless paid under the table, of course). So, providing labor to myself is effectively subsidized. Furthering this is my employer's subsidy of my weekend labor in the form of health insurance, disability insurance, etc. The professional (or his boss) would have to pay for Workman's Comp insurance (at a pretty high rate for construction labor), but my weekday employer would foot the bill -- just as if I had hurt myself while out walking around the block. Now, take into account the US's common labor arrangements -- salaried and hourly employment (as opposed to piece work, commissions, etc.). Let's say you are paid a fixed salary. The benefit of spending a Saturday in the office doing extra work to impress the boss has an uncertain payout far in the future -- one which might rationally be discounted. However, the benefit of finishing one's own basement instead of shelling out an extra few thousand in labor is tangible and much more immediate. It is no wonder mid-level salaried employees show-up at Home Depot on weekends. The lot for hourly employees is worse. For some strange reason, the US requires that they be paid 1.5x/hour for work beyond a 40 hour week. 2x on Sundays. This is a huge dis-incentive for an employer to offer his existing employees the opportunity to work weekends when business is heavy. It might be possible for someone to pick-up extra, part-time work in areas where he has expertise, but this work often is hard to come by. So, Home Depot flourishes and basements are finished with off-kilter walls. Personally, I have had multi-month periods as a software contractor where a client said, "work as many hours as you can, please!" So, every hour not working had a real, easily-quantified opportunity cost. I would have been crazy to have mowed my own lawn. It would have been nice to have been able to purchase other "services" like a doctor's visit without a wait. I even tried to offer the doctor's office a premium to be seen in a high-priority queue, but most insurance plans don't allow such upcharges on top of pre-negotiated rates. You can probably look at my HN posting history and figure out the periods when I had effectively unlimited earning potential -- there are huge gaps where I barely had anything to say.
- ShabbyDoo 15y ago
  A random thought in response to myself: My uncle recently retired as a plumber. He is in his mid-60's, and the physical part of the job got to be too much for him. Imagine a service like oDesk where my uncle could sit in front of his computer and be paid by the hour to consult with DIY-ers on their plumbing problems. A guy with a leaky faucet could wear a camera on his head, and my uncle could give him instructions as he took the thing apart. Let's say 1/2 hour of consulting was required @ $50/hour. My uncle would be delighted to earn even 2/3 of that in retirement, and the guy doing the work would have less applied time than if he had to wait at home to let the plumber in. Furthermore, 1/2 hour is less than the plumber's expected commute to the customer's house. How many in-home shadow work tasks could be done more efficiently if the physical labor was separated from the knowledge aspect of the work?

by Newgy 15y ago

rubashov 15y ago

Yeah, the article was a little ridiculous for not mentioning this. The impact of obamacare and the ever increasing risk of getting sued as an employer are huge and growing disincentives to hire low skill labor.

ShabbyDoo 15y ago

Heck, sales and income taxes contribute to this. Why is Home Depot so busy on weekends with DIY-ers? Shouldn't an amateur's effective "wage" for finishing his basement be incredibly low compared to a professional with knowledge/tools/etc.? So low that he/she would gladly work a few more hours at the office rather than spending his weekend figuring out how to lay tile? The problem is that I am not taxed on my "earnings" from the weekend work I might perform around the house, but a professional is (unless paid under the table, of course). So, providing labor to myself is effectively subsidized. Furthering this is my employer's subsidy of my weekend labor in the form of health insurance, disability insurance, etc. The professional (or his boss) would have to pay for Workman's Comp insurance (at a pretty high rate for construction labor), but my weekday employer would foot the bill -- just as if I had hurt myself while out walking around the block. Now, take into account the US's common labor arrangements -- salaried and hourly employment (as opposed to piece work, commissions, etc.). Let's say you are paid a fixed salary. The benefit of spending a Saturday in the office doing extra work to impress the boss has an uncertain payout far in the future -- one which might rationally be discounted. However, the benefit of finishing one's own basement instead of shelling out an extra few thousand in labor is tangible and much more immediate. It is no wonder mid-level salaried employees show-up at Home Depot on weekends. The lot for hourly employees is worse. For some strange reason, the US requires that they be paid 1.5x/hour for work beyond a 40 hour week. 2x on Sundays. This is a huge dis-incentive for an employer to offer his existing employees the opportunity to work weekends when business is heavy. It might be possible for someone to pick-up extra, part-time work in areas where he has expertise, but this work often is hard to come by. So, Home Depot flourishes and basements are finished with off-kilter walls. Personally, I have had multi-month periods as a software contractor where a client said, "work as many hours as you can, please!" So, every hour not working had a real, easily-quantified opportunity cost. I would have been crazy to have mowed my own lawn. It would have been nice to have been able to purchase other "services" like a doctor's visit without a wait. I even tried to offer the doctor's office a premium to be seen in a high-priority queue, but most insurance plans don't allow such upcharges on top of pre-negotiated rates. You can probably look at my HN posting history and figure out the periods when I had effectively unlimited earning potential -- there are huge gaps where I barely had anything to say.

ShabbyDoo 15y ago
A random thought in response to myself: My uncle recently retired as a plumber. He is in his mid-60's, and the physical part of the job got to be too much for him. Imagine a service like oDesk where my uncle could sit in front of his computer and be paid by the hour to consult with DIY-ers on their plumbing problems. A guy with a leaky faucet could wear a camera on his head, and my uncle could give him instructions as he took the thing apart. Let's say 1/2 hour of consulting was required @ $50/hour. My uncle would be delighted to earn even 2/3 of that in retirement, and the guy doing the work would have less applied time than if he had to wait at home to let the plumber in. Furthermore, 1/2 hour is less than the plumber's expected commute to the customer's house. How many in-home shadow work tasks could be done more efficiently if the physical labor was separated from the knowledge aspect of the work?