4 ms·

All individual compensation is a delta over what a low skill worker would get. Pay fast food workers 80k a year and software engineers would start at 300k.

constantcrying 3y ago
Also known as inflation.
- willcipriano 3y ago
  No. Independent from that. Jobs that require more skill or jobs that are more difficult have to offer more to get people to work for them. Raise the bar at the bottom and all wages will go up, otherwise workers will "demote" themselves. This is a distinct effect from prices raising and workers asking higher wages to counteract inflation (if they could do that why aren't they?).
  - avvvv 3y ago
    Then everyone gets to benefit, no? All developing nations have far lower wages than the west, but that's often offset by lower living costs. But try to buy something out of the international market and you'll quickly feel envy. If there is an issue with higher wages then I don't see it
    - MichaelZuo 3y ago
      Nobody would benefit because if fast food workers start at 80k, then a basic hamburger would start at $20. And an iPhone pro would start at $2000.
      - CapstanRoller 3y ago
        Your argument doesn't match reality. We don't need hypotheticals here: McDonalds workers in EU countries earn significantly more than their US counterparts, yet a Big Mac costs the same of just a few pennies more.
        MichaelZuo 3y ago
        >… yet a Big Mac costs the same of just a few pennies more. What? Do you not know how to check Big mac prices online in other countries?
        CapstanRoller 3y ago
        Don't you know how to check? Danish McD's workers earn $20/hr+ but their Big Mac costs just 80 cents more. https://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html https://www.nytimes.com/2014/10/28/business/international/li...
        MichaelZuo 3y ago
        You linked an article from 2014… Plus it doesn’t pass the smell test, there are plenty of photos online of danish mcdonalds menus going back to at least 2018, that I could find in two minutes of searching. That clearly shows a standard Big Mac meal is 60 Danish Krone. Which was 9 USD to 10 USD depending on when you pick the exchange rate in 2018. In the US, depending on location, the same meal would have been 5.5 USD to 7 USD in 2018. Maybe a bit more in Hawaii. Maybe there were a few places in Denmark selling it for much cheaper, and it was being compared to Hawaii prices, hence why this notion came about, but that’s a ridiculous stretch.
      - willcipriano 3y ago
        A hamburger meal is already $20
  - constantcrying 3y ago
    No, it isn't distinct from inflation. Higher wages necessarily means increased cost for product, leading to an overall increase in cost. This is exactly what inflation is.
  - toasterlovin 3y ago
    FWIW, I think you have this exactly backward. It’s higher incomes at the top that drive higher incomes at the bottom. Low skill workers in developed countries make more because they are part of what is essentially a labor cartel: there are certain jobs which can only be performed by, e.g., an English speaking person who understands the American cultural context and who is physically located in America. And restricted immigration and language barriers prevent competition from new entrants. So as more people are pulled into high skill, high pay work, incomes for even low skilled people go up, because their competition decreases and overall wealth in the society, ie wealth available to pay for their time, increases.
  - billy99k 3y ago
    "Raise the bar at the bottom and all wages will go up" The people at the bottom might be making more, but they won't have spending power for very long because the cost of everything will go up. This cycle will just continue forever, unless the government starts fixing prices, which never leads to a good outcome. When fast food workers wages are raised, we might see a few dollars more for meals. When you raise the wages in every other industry, it has a cascading effect. Just look at the number of jobs between products on the store shelf and how it gets there. Delivery, trucking, packing, shipping, etc. In this one example, it would raise prices 10X.
bwestergard 3y ago
This is not true even as a rule of thumb, because it neglects that aggregate wages can increase at the expense of returns to capital (i.e. profits). But more to the point, it neglects elasticities of demand.

constantcrying 3y ago

Also known as inflation.

willcipriano 3y ago
No. Independent from that. Jobs that require more skill or jobs that are more difficult have to offer more to get people to work for them. Raise the bar at the bottom and all wages will go up, otherwise workers will "demote" themselves. This is a distinct effect from prices raising and workers asking higher wages to counteract inflation (if they could do that why aren't they?).
- avvvv 3y ago
  Then everyone gets to benefit, no? All developing nations have far lower wages than the west, but that's often offset by lower living costs. But try to buy something out of the international market and you'll quickly feel envy. If there is an issue with higher wages then I don't see it
  - MichaelZuo 3y ago
    Nobody would benefit because if fast food workers start at 80k, then a basic hamburger would start at $20. And an iPhone pro would start at $2000.
    - CapstanRoller 3y ago
      Your argument doesn't match reality. We don't need hypotheticals here: McDonalds workers in EU countries earn significantly more than their US counterparts, yet a Big Mac costs the same of just a few pennies more.
      - MichaelZuo 3y ago
        >… yet a Big Mac costs the same of just a few pennies more. What? Do you not know how to check Big mac prices online in other countries?
        CapstanRoller 3y ago
        Don't you know how to check? Danish McD's workers earn $20/hr+ but their Big Mac costs just 80 cents more. https://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html https://www.nytimes.com/2014/10/28/business/international/li...
        MichaelZuo 3y ago
        You linked an article from 2014… Plus it doesn’t pass the smell test, there are plenty of photos online of danish mcdonalds menus going back to at least 2018, that I could find in two minutes of searching. That clearly shows a standard Big Mac meal is 60 Danish Krone. Which was 9 USD to 10 USD depending on when you pick the exchange rate in 2018. In the US, depending on location, the same meal would have been 5.5 USD to 7 USD in 2018. Maybe a bit more in Hawaii. Maybe there were a few places in Denmark selling it for much cheaper, and it was being compared to Hawaii prices, hence why this notion came about, but that’s a ridiculous stretch.
    - willcipriano 3y ago
      A hamburger meal is already $20
- constantcrying 3y ago
  No, it isn't distinct from inflation. Higher wages necessarily means increased cost for product, leading to an overall increase in cost. This is exactly what inflation is.
- toasterlovin 3y ago
  FWIW, I think you have this exactly backward. It’s higher incomes at the top that drive higher incomes at the bottom. Low skill workers in developed countries make more because they are part of what is essentially a labor cartel: there are certain jobs which can only be performed by, e.g., an English speaking person who understands the American cultural context and who is physically located in America. And restricted immigration and language barriers prevent competition from new entrants. So as more people are pulled into high skill, high pay work, incomes for even low skilled people go up, because their competition decreases and overall wealth in the society, ie wealth available to pay for their time, increases.
- billy99k 3y ago
  "Raise the bar at the bottom and all wages will go up" The people at the bottom might be making more, but they won't have spending power for very long because the cost of everything will go up. This cycle will just continue forever, unless the government starts fixing prices, which never leads to a good outcome. When fast food workers wages are raised, we might see a few dollars more for meals. When you raise the wages in every other industry, it has a cascading effect. Just look at the number of jobs between products on the store shelf and how it gets there. Delivery, trucking, packing, shipping, etc. In this one example, it would raise prices 10X.

bwestergard 3y ago

This is not true even as a rule of thumb, because it neglects that aggregate wages can increase at the expense of returns to capital (i.e. profits). But more to the point, it neglects elasticities of demand.