5 ms·

Here's a fun trick: If your KPI is "number of jobs" then keep the minimum wage so low that countless people need two or three of them.

fauxpause_ 4y ago
The fed is trying to raise unemployment, not lower it, and the real metric tracked is the unemployment rate, which is not affected by your comment.
- kortilla 4y ago
  No, the fed has a dual mandate of controlling inflation and keeping unemployment low. They are absolutely not “trying to raise unemployment”. They are trying to control inflation and the expectation is that they will eventually have to stop raising interest rates (or lower them) because unemployment increases too much before they hit their inflation target.
  - fauxpause_ 4y ago
    Yes they are. They’re very clear about this. They are trying to raise unemployment as a lever to reduce inflation. That is not to say they want unemployment to rise indefinitely, but they do want it to rise.
    - kortilla 4y ago
      No they are not, they are very clear about this. They will keep raising interest rates until inflation hits their target. They will only stop before that if it starts to drastically impact employment.
    - reducesuffering 4y ago
      Fed mandate is clear: Price stability and low unemployment. Their main lever is interest rates. Interest rate increases do not necessarily increase unemployment. Now that unemployment is low enough, their priority is inflation, and for that they will raise interest rates. If higher unemployment is a side effect that leads to 2% inflation, then their mandate is still achieved. But rest assured, if inflation comes down to 2% with unemployment flat or improved, it's all the better according to them. Their intention is not "more unemployment -> less inflation", it's just "less inflation," by any means necessary. They will accept causing higher unemployment to achieve 2% inflation because it's a balancing act between their two goals. "Powell said he hoped that a slackening of demand might reduce pressure in the labor market without raising unemployment."[0] [0]https://www.bloomberg.com/opinion/articles/2022-07-29/higher-unemployment-is-coming-and-the-fed-should-get-ready?leadSource=uverify%20wall https://www.bloomberg.com/opinion/articles/2022-07-29/higher...
  - solumunus 4y ago
    They have said, literally, that they will not stop with rate hikes until unemployment is significantly higher.
    - kortilla 4y ago
      No, they have said, literally, that they will not stop rate hikes until they hit their inflation target. They will also consider stopping if it starts to interfere with their max employment mandate. The critical difference that you are missing is that if inflation stops before employment declines, they will stop raising rates.
- Waterluvian 4y ago
  I hope they’re trying to lower unemployment. But yes, my flippant comment is mainly just about these kinds of headlines. And a free chance to take a shot at the wrong and bad minimum wages.
  - fauxpause_ 4y ago
    They’re trying to raise it.
  - ElevenLathe 4y ago
    > I hope they’re trying to lower unemployment. Prepare to be disappointed. They are openly trying to raise it in order to lower "inflation".
- MuffinFlavored 4y ago
  What's your biggest guess as to why, even with 5% interest rates, they haven't been able raise unemployment yet? How long will they need to hold interest rates at 5%+ before we see a raise in unemployment?
  - fauxpause_ 4y ago
    I don’t think interest rates have the capacity to change unemployment right now until they hit some truly emergent effects like a much bigger banking crisis. The US’ economy is not as capital intensive as other economies past.
    - MuffinFlavored 4y ago
      > I don’t think interest rates have the capacity to change unemployment right now I don't know. New + used car sales as well as new 15/30 year mortgages (or what would typically be refinances maybe) have to have some effect. A car salesman closes less deals, he has less money to go on vacation with, etc. etc.
  - bilsbie 4y ago
    My guess would be: Lots of companies still filling back orders and latent demand from the last three years When unemployment is low companies are reluctant to lose staff for fear of not being able to rehire when needed The housing market hasn’t slowed much which is a huge employer Pent up demand for travel and services is still strong
    - Kon-Peki 4y ago
      A lot of back orders relate to the construction and fitting out of factories as part of the reshoring movement. Once those factories are ready to produce widgets, they need reasonably-priced labor to staff them (and export the unemployment to China). It's going to be really tough to do that if they can't create some unemployment over here.
  - nostrademons 4y ago
    Until bankruptcies. The Fed rate doesn't directly affect employment - at best it may encourage some larger businesses to postpone hiring, but most companies (outside tech, which a.) has some very good macroeconomists b.) intends to survive and c.) is unusually sensitive to cost of capital) aren't going to lay off people until their bottom line takes a hit that puts their survival in question. Smaller profitable companies aren't directly exposed to the cost of capital at all, because they fund operations out of cash flow. The way interest hikes combat inflation is that they make certain lines of business unprofitable, which makes companies either voluntarily shutter them or go out of business for being unprofitable, which frees up the workers involved in those businesses to compete for core, need-to-have industries like food and logistics, which holds down wages. This is happening in tech, but it hasn't filtered down into the broader economy. And it needs to - even if you lay off everyone who "learned to code" in the last 10 years and force them back to working retail, there are still way more job openings than workers. We'll see unemployment go up when we see major Fortune 500 companies go bankrupt, and we'll see inflation drop sustainably when people are on bread lines.
- dragonwriter 4y ago
  > The fed is trying to raise unemployment, not lower No, the Fed is trying to lower aggregate consumer demand to rein in the growth in consumer prices. If it could acheive that entirely by adversely impacting availability and cost of credit while unemployment kept dropping, that would be ideal, given the other side of its dual mandate. It accepts as a natural consequence that unemployment will likely need to go up to acheive its goals on inflation, but raising unemployment is not a goal.
  - fauxpause_ 4y ago
    > No, the Fed is trying to lower aggregate consumer demand to rein in the growth in consumer prices. If it could acheive that entirely by adversely impacting availability and cost of credit while unemployment kept dropping, that would be ideal, given the other side of its dual mandate. It would be ideal. But it is not achievable. So raising unemployment is a short term goal to achieve the broader goal of stability.
    - dragonwriter 4y ago
      > So raising unemployment is a short term goal to achieve the broader goal of stability. There is a difference between an accepted cost and a goal.
      - fauxpause_ 4y ago
        Their goal is to incur that cost. It is a short term goal.
- screwturner68 4y ago
  That's going to be very hard to do, the Boomers have retired and there isn't anyone to replace them and unless and until we fix immigration there won't be anyone to replace them. In addition, look at the job opening 50% of open jobs are in food service and retail. These are not good jobs they are kid jobs or jobs of last resort, nobody aspires to work the drive through at McDonalds. Powell is happy to drive wages down, he's probably thrilled that with the huge number of higher wage earners that had t file for unemployment last week -the most ever. As Powell said, this is going to suck for you working stiffs but at least your eggs will only cost $2.99.
  - HDThoreaun 4y ago
    The egg situation was totally unrelated to macro conditions. It was caused by the need to cull most egg laying chickens in the country.
MuffinFlavored 4y ago
Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay?
- JustBreath 4y ago
  Couldn't believe that shit when I heard it. I wish I could find the interview, but at one point someone brought up the question of wages going up and he basically said "Don't stress we'll get that under control soon" "That" basically meaning poor people.
  - cj 4y ago
    It's not objectively good for wages to increase. As an extreme example, if the minimum wage went to $100/hr, inflation would skyrocket because demand for goods would skyrocket which would send prices for just about everything to the moon. A metric that matters a lot more is purchasing power. It's better to make $10/hr if a dozen eggs cost $2 (20% of your hourly wage), compared to making $20/hr with a dozen eggs costing $6 (30% of your hourly wage).
- tedivm 4y ago
  > By moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially. So there’s a path to that.
- cj 4y ago
  "Wage inflation" is talked about as a problem by various politicians and TV networks. I think the underlying logic is "if wages keep going up, it makes it harder to bring inflation down". In other words, if people get paid more, demand stays the same (or increases) which is counterproductive to lowering inflation.
seanmcdirmid 4y ago
The federal minimum wage is irrelevant in almost every region now. It might be relevant in maybe a poor part of Mississippi, but I wouldn’t be surprised if it wasn’t the bottom even in those places. Our current job boom has little with minimum wage allowing for lots of low productivity workers and more to do with a demographic shift, baby boomers are retiring and dying off, the demographic pyramid is imbalanced.
- JustBreath 4y ago
  Yeah it's worth keeping in mind only 0.15% of people earn minimum wage. For most jobs you simply can't get someone to do the work for that rate.
  - ZoomerCretin 4y ago
    Someone who makes $0.01 more than the minimum wage is not counted in your 0.15% figure. There are millions of people who would benefit from the minimum wage raising from $7.25 to $10.
- bilsbie 4y ago
  Effectively ending all minimum wages could actually be a big factor in making unemployment so low. Is anyone looking into that idea? Also how weird that we de facto ended minimum wage with no discussions. Just let it happen. Strange things happen when laws don’t account for inflation.
golergka 4y ago
Earning minimum wage is better than earning nothing.
- 2devnull 4y ago
  Not true. Sometimes you come out ahead by having no income because income disqualifies you for various social services. This is a well known problem.
  - golergka 4y ago
    Fair point, but I while it's technically true, I don't think it's relevant to the discussion at hand. Let me rephrase my original comment: a person who hasn't been earning anything and made a *rational decision* to earn something is in a better position than he was before. I honestly don't think that significant portion of these new jobs are filled with people who decided to be disqualified from social services to earn less money that they have been receiving before.
    - 2devnull 4y ago
      > don't think that significant portion of these new jobs are filled with people who decided to be disqualified from social services I haven’t looked at the data recently but I would bet small money that you’re incorrect. I’m thinking of people near retirement age specifically.
laidoffamazon 4y ago
This is statistically incorrect. The percentage of multiple jobholders is still lower than before the pandemic [0]. This is despite the prime age labor force participation rate being the highest since like 2002, and higher than it was before the pandemic in January 2020 [1] You should reflect on why you feel this way despite the facts painting a very different picture. [0] https://fred.stlouisfed.org/series/LNS12026620 https://fred.stlouisfed.org/series/LNS12026620 [1] https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060
- mxkopy 4y ago
  Comparing pre-pandemic is arbitrary and doesn't make sense, some people have been needing multiple jobs for a long time now
  - chronic04020 4y ago
    [flagged]
- hartator 4y ago
  If you factor money supply increase, current minimum wage is like $3-4 per hour compared to pre-pandemic.
  - dragonwriter 4y ago
    > If you factor money supply increase, current minimum wage is like $3-4 per hour compared to pre-pandemic. Yes, if you start with a dumb premise, you come to a meaningless conclusion.
  - irrational 4y ago
    Do you mean people are being paid $3-4? Or is there a word (more?) missing?
    - hartator 4y ago
      2019 $7.5 per hour is roughly equivalent to $4 per hour today.
adrr 4y ago
Are there jobs that still pay min wage? Warehouse jobs are paying $20+hr. Customer service jobs are $20hr+.
- screwturner68 4y ago
  most are food service and retail -jobs that work you like a rented mule. pay minimum wage,have no benefits and only give you 31 hours a week with a schedule that changes constantly.
  - adrr 4y ago
    Do they? Why wouldn't your work at an Amaazon warehouse for twice the pay and real benefits?
    - Volundr 4y ago
      Amazon warehouses are not in every city and town, do not provide an unlimited number of jobs and are their own version of hellish.
  - simonsarris 4y ago
    Target in New Hampshire (no state minimum wage) starts at $17/hr
- GalenErso 4y ago
  The fact that the minimum wage has remained unchanged for so long has an interesting economic consequence: it has effectively abolished the concept of a minimum wage. Nordic countries like Germany don't have a minimum wage. Rather, labor unions negotiate pay rates for various industries, and businesses are free to set their own rates. Left-wing people in the US think that abolishing the minimum wage would be a disaster, as businesses would be free to pay their workers peanuts. But this is not what's actually happening in other industrialized countries without a mandated minimum wage. Sure, a business could offer $4/hour, but because it would not be a liveable wage, no one would take those jobs, even people who are desperate. Likewise, $7.25/hour, the mandated minimum wage in the US, is now so low compared to the cost of living that no business is paying that anymore, even the penny-pinching ones. So the labor market situation in the US at the moment resembles more that of Nordic European countries. It may be that the lack of a minimum wage in a situation of labor scarcity empowers workers. When there is a mandated minimum wage, a business can pay that, because it's an easy decision. But when there is no minimum wage, businesses have to work harder to determine an appropriate pay level. They have to conduct market research, hire consultants, study their competitors, and make a decision.
nostrademons 4y ago
Or encourage remote work so people can be overemployed. There was that guy here who had 10 full-time jobs, and was clearing about $1.5M/year: https://news.ycombinator.com/item?id=27454589 https://news.ycombinator.com/item?id=27454589
- jader201 4y ago
  I’m pretty sure that was a joke (but maybe yours is too?).
  - nostrademons 4y ago
    It's a ha-ha-only-serious joke. Overemployment definitely exists - there's a whole r/overemployed subreddit with 174K members, where people routinely post about the 2-3 jobs they have. And I (eng manager at a FAANG) have seen fellow managers post about what to do about reports that they find have multiple jobs. I'm not endorsing the practice - it will get you fired if one of your employers find out (although maybe its practitioners don't care, they'll just get another 10 jobs) - and it's pretty ridiculous that it exists. But it's sort of the logical outgrowth of late-stage capitalism where the only thing that matters is securing the transaction that puts money in your bank account and actually doing the job that you promised to do is secondary.

fauxpause_ 4y ago

The fed is trying to raise unemployment, not lower it, and the real metric tracked is the unemployment rate, which is not affected by your comment.

kortilla 4y ago
No, the fed has a dual mandate of controlling inflation and keeping unemployment low. They are absolutely not “trying to raise unemployment”. They are trying to control inflation and the expectation is that they will eventually have to stop raising interest rates (or lower them) because unemployment increases too much before they hit their inflation target.
- fauxpause_ 4y ago
  Yes they are. They’re very clear about this. They are trying to raise unemployment as a lever to reduce inflation. That is not to say they want unemployment to rise indefinitely, but they do want it to rise.
  - kortilla 4y ago
    No they are not, they are very clear about this. They will keep raising interest rates until inflation hits their target. They will only stop before that if it starts to drastically impact employment.
  - reducesuffering 4y ago
    Fed mandate is clear: Price stability and low unemployment. Their main lever is interest rates. Interest rate increases do not necessarily increase unemployment. Now that unemployment is low enough, their priority is inflation, and for that they will raise interest rates. If higher unemployment is a side effect that leads to 2% inflation, then their mandate is still achieved. But rest assured, if inflation comes down to 2% with unemployment flat or improved, it's all the better according to them. Their intention is not "more unemployment -> less inflation", it's just "less inflation," by any means necessary. They will accept causing higher unemployment to achieve 2% inflation because it's a balancing act between their two goals. "Powell said he hoped that a slackening of demand might reduce pressure in the labor market without raising unemployment."[0] [0]https://www.bloomberg.com/opinion/articles/2022-07-29/higher-unemployment-is-coming-and-the-fed-should-get-ready?leadSource=uverify%20wall https://www.bloomberg.com/opinion/articles/2022-07-29/higher...
- solumunus 4y ago
  They have said, literally, that they will not stop with rate hikes until unemployment is significantly higher.
  - kortilla 4y ago
    No, they have said, literally, that they will not stop rate hikes until they hit their inflation target. They will also consider stopping if it starts to interfere with their max employment mandate. The critical difference that you are missing is that if inflation stops before employment declines, they will stop raising rates.
Waterluvian 4y ago
I hope they’re trying to lower unemployment. But yes, my flippant comment is mainly just about these kinds of headlines. And a free chance to take a shot at the wrong and bad minimum wages.
- fauxpause_ 4y ago
  They’re trying to raise it.
- ElevenLathe 4y ago
  > I hope they’re trying to lower unemployment. Prepare to be disappointed. They are openly trying to raise it in order to lower "inflation".
MuffinFlavored 4y ago
What's your biggest guess as to why, even with 5% interest rates, they haven't been able raise unemployment yet? How long will they need to hold interest rates at 5%+ before we see a raise in unemployment?
- fauxpause_ 4y ago
  I don’t think interest rates have the capacity to change unemployment right now until they hit some truly emergent effects like a much bigger banking crisis. The US’ economy is not as capital intensive as other economies past.
  - MuffinFlavored 4y ago
    > I don’t think interest rates have the capacity to change unemployment right now I don't know. New + used car sales as well as new 15/30 year mortgages (or what would typically be refinances maybe) have to have some effect. A car salesman closes less deals, he has less money to go on vacation with, etc. etc.
- bilsbie 4y ago
  My guess would be: Lots of companies still filling back orders and latent demand from the last three years When unemployment is low companies are reluctant to lose staff for fear of not being able to rehire when needed The housing market hasn’t slowed much which is a huge employer Pent up demand for travel and services is still strong
  - Kon-Peki 4y ago
    A lot of back orders relate to the construction and fitting out of factories as part of the reshoring movement. Once those factories are ready to produce widgets, they need reasonably-priced labor to staff them (and export the unemployment to China). It's going to be really tough to do that if they can't create some unemployment over here.
- nostrademons 4y ago
  Until bankruptcies. The Fed rate doesn't directly affect employment - at best it may encourage some larger businesses to postpone hiring, but most companies (outside tech, which a.) has some very good macroeconomists b.) intends to survive and c.) is unusually sensitive to cost of capital) aren't going to lay off people until their bottom line takes a hit that puts their survival in question. Smaller profitable companies aren't directly exposed to the cost of capital at all, because they fund operations out of cash flow. The way interest hikes combat inflation is that they make certain lines of business unprofitable, which makes companies either voluntarily shutter them or go out of business for being unprofitable, which frees up the workers involved in those businesses to compete for core, need-to-have industries like food and logistics, which holds down wages. This is happening in tech, but it hasn't filtered down into the broader economy. And it needs to - even if you lay off everyone who "learned to code" in the last 10 years and force them back to working retail, there are still way more job openings than workers. We'll see unemployment go up when we see major Fortune 500 companies go bankrupt, and we'll see inflation drop sustainably when people are on bread lines.
dragonwriter 4y ago
> The fed is trying to raise unemployment, not lower No, the Fed is trying to lower aggregate consumer demand to rein in the growth in consumer prices. If it could acheive that entirely by adversely impacting availability and cost of credit while unemployment kept dropping, that would be ideal, given the other side of its dual mandate. It accepts as a natural consequence that unemployment will likely need to go up to acheive its goals on inflation, but raising unemployment is not a goal.
- fauxpause_ 4y ago
  > No, the Fed is trying to lower aggregate consumer demand to rein in the growth in consumer prices. If it could acheive that entirely by adversely impacting availability and cost of credit while unemployment kept dropping, that would be ideal, given the other side of its dual mandate. It would be ideal. But it is not achievable. So raising unemployment is a short term goal to achieve the broader goal of stability.
  - dragonwriter 4y ago
    > So raising unemployment is a short term goal to achieve the broader goal of stability. There is a difference between an accepted cost and a goal.
    - fauxpause_ 4y ago
      Their goal is to incur that cost. It is a short term goal.
screwturner68 4y ago
That's going to be very hard to do, the Boomers have retired and there isn't anyone to replace them and unless and until we fix immigration there won't be anyone to replace them. In addition, look at the job opening 50% of open jobs are in food service and retail. These are not good jobs they are kid jobs or jobs of last resort, nobody aspires to work the drive through at McDonalds. Powell is happy to drive wages down, he's probably thrilled that with the huge number of higher wage earners that had t file for unemployment last week -the most ever. As Powell said, this is going to suck for you working stiffs but at least your eggs will only cost $2.99.
- HDThoreaun 4y ago
  The egg situation was totally unrelated to macro conditions. It was caused by the need to cull most egg laying chickens in the country.

MuffinFlavored 4y ago

Hasn't Jerome Powell been quoted verbaitm on saying "we need to get wages down", implying that they have gotten too high and are unsustainable for most small/medium businesses to pay?

JustBreath 4y ago
Couldn't believe that shit when I heard it. I wish I could find the interview, but at one point someone brought up the question of wages going up and he basically said "Don't stress we'll get that under control soon" "That" basically meaning poor people.
- cj 4y ago
  It's not objectively good for wages to increase. As an extreme example, if the minimum wage went to $100/hr, inflation would skyrocket because demand for goods would skyrocket which would send prices for just about everything to the moon. A metric that matters a lot more is purchasing power. It's better to make $10/hr if a dozen eggs cost $2 (20% of your hourly wage), compared to making $20/hr with a dozen eggs costing $6 (30% of your hourly wage).
tedivm 4y ago
> By moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially. So there’s a path to that.
cj 4y ago
"Wage inflation" is talked about as a problem by various politicians and TV networks. I think the underlying logic is "if wages keep going up, it makes it harder to bring inflation down". In other words, if people get paid more, demand stays the same (or increases) which is counterproductive to lowering inflation.

seanmcdirmid 4y ago

The federal minimum wage is irrelevant in almost every region now. It might be relevant in maybe a poor part of Mississippi, but I wouldn’t be surprised if it wasn’t the bottom even in those places. Our current job boom has little with minimum wage allowing for lots of low productivity workers and more to do with a demographic shift, baby boomers are retiring and dying off, the demographic pyramid is imbalanced.

JustBreath 4y ago
Yeah it's worth keeping in mind only 0.15% of people earn minimum wage. For most jobs you simply can't get someone to do the work for that rate.
- ZoomerCretin 4y ago
  Someone who makes $0.01 more than the minimum wage is not counted in your 0.15% figure. There are millions of people who would benefit from the minimum wage raising from $7.25 to $10.
bilsbie 4y ago
Effectively ending all minimum wages could actually be a big factor in making unemployment so low. Is anyone looking into that idea? Also how weird that we de facto ended minimum wage with no discussions. Just let it happen. Strange things happen when laws don’t account for inflation.

golergka 4y ago

Earning minimum wage is better than earning nothing.

2devnull 4y ago
Not true. Sometimes you come out ahead by having no income because income disqualifies you for various social services. This is a well known problem.
- golergka 4y ago
  Fair point, but I while it's technically true, I don't think it's relevant to the discussion at hand. Let me rephrase my original comment: a person who hasn't been earning anything and made a *rational decision* to earn something is in a better position than he was before. I honestly don't think that significant portion of these new jobs are filled with people who decided to be disqualified from social services to earn less money that they have been receiving before.
  - 2devnull 4y ago
    > don't think that significant portion of these new jobs are filled with people who decided to be disqualified from social services I haven’t looked at the data recently but I would bet small money that you’re incorrect. I’m thinking of people near retirement age specifically.

laidoffamazon 4y ago

This is statistically incorrect. The percentage of multiple jobholders is still lower than before the pandemic [0]. This is despite the prime age labor force participation rate being the highest since like 2002, and higher than it was before the pandemic in January 2020 [1] You should reflect on why you feel this way despite the facts painting a very different picture. [0] https://fred.stlouisfed.org/series/LNS12026620 https://fred.stlouisfed.org/series/LNS12026620 [1] https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060

mxkopy 4y ago
Comparing pre-pandemic is arbitrary and doesn't make sense, some people have been needing multiple jobs for a long time now
- chronic04020 4y ago
  [flagged]
hartator 4y ago
If you factor money supply increase, current minimum wage is like $3-4 per hour compared to pre-pandemic.
- dragonwriter 4y ago
  > If you factor money supply increase, current minimum wage is like $3-4 per hour compared to pre-pandemic. Yes, if you start with a dumb premise, you come to a meaningless conclusion.
- irrational 4y ago
  Do you mean people are being paid $3-4? Or is there a word (more?) missing?
  - hartator 4y ago
    2019 $7.5 per hour is roughly equivalent to $4 per hour today.

adrr 4y ago

Are there jobs that still pay min wage? Warehouse jobs are paying $20+hr. Customer service jobs are $20hr+.

screwturner68 4y ago
most are food service and retail -jobs that work you like a rented mule. pay minimum wage,have no benefits and only give you 31 hours a week with a schedule that changes constantly.
- adrr 4y ago
  Do they? Why wouldn't your work at an Amaazon warehouse for twice the pay and real benefits?
  - Volundr 4y ago
    Amazon warehouses are not in every city and town, do not provide an unlimited number of jobs and are their own version of hellish.
- simonsarris 4y ago
  Target in New Hampshire (no state minimum wage) starts at $17/hr
GalenErso 4y ago
The fact that the minimum wage has remained unchanged for so long has an interesting economic consequence: it has effectively abolished the concept of a minimum wage. Nordic countries like Germany don't have a minimum wage. Rather, labor unions negotiate pay rates for various industries, and businesses are free to set their own rates. Left-wing people in the US think that abolishing the minimum wage would be a disaster, as businesses would be free to pay their workers peanuts. But this is not what's actually happening in other industrialized countries without a mandated minimum wage. Sure, a business could offer $4/hour, but because it would not be a liveable wage, no one would take those jobs, even people who are desperate. Likewise, $7.25/hour, the mandated minimum wage in the US, is now so low compared to the cost of living that no business is paying that anymore, even the penny-pinching ones. So the labor market situation in the US at the moment resembles more that of Nordic European countries. It may be that the lack of a minimum wage in a situation of labor scarcity empowers workers. When there is a mandated minimum wage, a business can pay that, because it's an easy decision. But when there is no minimum wage, businesses have to work harder to determine an appropriate pay level. They have to conduct market research, hire consultants, study their competitors, and make a decision.

nostrademons 4y ago

Or encourage remote work so people can be overemployed. There was that guy here who had 10 full-time jobs, and was clearing about $1.5M/year: https://news.ycombinator.com/item?id=27454589 https://news.ycombinator.com/item?id=27454589

jader201 4y ago
I’m pretty sure that was a joke (but maybe yours is too?).
- nostrademons 4y ago
  It's a ha-ha-only-serious joke. Overemployment definitely exists - there's a whole r/overemployed subreddit with 174K members, where people routinely post about the 2-3 jobs they have. And I (eng manager at a FAANG) have seen fellow managers post about what to do about reports that they find have multiple jobs. I'm not endorsing the practice - it will get you fired if one of your employers find out (although maybe its practitioners don't care, they'll just get another 10 jobs) - and it's pretty ridiculous that it exists. But it's sort of the logical outgrowth of late-stage capitalism where the only thing that matters is securing the transaction that puts money in your bank account and actually doing the job that you promised to do is secondary.