4 ms·

> massively overpaying its workforce As I understand it, tech employees are typically paid a small fraction of the revenue that they bring into the company. O

> massively overpaying its workforce As I understand it, tech employees are typically paid a small fraction of the revenue that they bring into the company. Outside of tech, employees are underpaid, and wages haven't tracked productivity growth since the 1970s. Profit growth has greatly exceeded wage growth since the early 2000s, with the exception of the 2008 recession.

genewitch 2y ago
Minimum wage, fairly, should have been around $32 in 2019 or so. I haven't run numbers lately because it's depressing, but I bet it's worse now. You can't go off mcdonalds sandwiches, and you can't use the economic indicators that ignore food and fuel. I've heard wild numbers from "the dollar is worth 50¢ compared to 20 years ago" to "the dollar has lost 98% of its value in the last N years." I'm not an economist, but I do know my electric bill has been thr exact same dollar amount for 12 years, and I've halved my usage twice in those years. That puts the dollar purchasing power for power at 25% of 2013. Gasoline changes prices so much I can't really say, it's about twice as expensive for 87 here as 12 years ago, but 93 is 2.5+ times higher. Food? Don't get me started. I live in the rural south. I don't really care about price fixing in Los Angeles or silicon Valley.
- milesrout 2y ago
  There is no such thing as what minimum wage should be "fairly". What is the minimum amount you should be able to pay someone an hour? Surely it is the amount where if you didn't, someone else would pay them more. There are many people who do jobs worth much less than $32/hour. That min wage would just make them illegal to employ. >You can't go off mcdonalds sandwiches, and you can't use the economic indicators that ignore food and fuel. You can't use economic indicators that track volatile commodities either. We use baskets of consumer goods and the inflation tracking is very accurate in short time frames but it becomes harder to compare the further out you get. A TV today is much better than a TV even 10 years ago but it is hardly even the same product as one from 1970. >I've heard wild numbers from "the dollar is worth 50¢ compared to 20 years ago" to "the dollar has lost 98% of its value in the last N years." What is wild about that? If you had 50c then and you had invested it in even relatively poorly performing investments it would be worth much more than $1 now. >I'm not an economist, but I do know my electric bill has been thr exact same dollar amount for 12 years, and I've halved my usage twice in those years. That puts the dollar purchasing power for power at 25% of 2013. That you are not an economist is obvious. You are aware that dollars buy more things than energy from your energy provider according to your energy plan, yeah?
  - genewitch 2y ago
    > What is the minimum amount you should be able to pay someone an hour? Surely it is the amount where if you didn't, someone else would pay them more. A livable wage in the geographic jurisdiction they are in. Including stuff like transportation, healthcare, food, heat, housing, and insurance. Glad you asked. oh, the company can't compete without exploiting workers? oh well.
    - SR2Z 2y ago
      > A livable wage in the geographic jurisdiction they are in. This is called the Iron Law of Wages. As its name implies, it's neither prescriptive nor pleasant - but it is guaranteed to be liveable. > Including stuff like transportation, healthcare, food, heat, housing, and insurance. The thing that trips people up is that the word "liveable" is a synonym for "subsistence," not "fullfilling." A wage that's only liveable would feel quite exploitative to most people.
      - gknoy 2y ago
        The intention of "minimum wage" in the US is not merely subsistence level. FDR said, "by living wages, I mean more than a bare subsistence level-I mean the wages of decent living." [0] The "iron law of wages" is instead an economic principle that wages tend to trend downwards until people are paid the minimum possible for subsistence. It's not meant to be a goal. 0: http://docs.fdrlibrary.marist.edu/odnirast.html http://docs.fdrlibrary.marist.edu/odnirast.html
        SR2Z 2y ago
        There are ten million stated reasons for the minimum wage! Pretty much the only one that economists can agree on is that it's helpful to prevent abuses of monopsony power in small towns. Regardless of what FDR said, a living wage is guaranteed because people will not accept anything lower. The problem with a "decent" living is that reasonable people can disagree about what that looks like. Roommates? Children? An unemployed spouse? Vacations and retirement? It's not the government's job to guarantee all of that stuff and I would rather we focus on stopping wage and tip theft and protecting the rights of workers (banning noncompetes, decoupling health insurance, etc.) instead of increasing the minimum wage towards some poorly-defined goal. There's also the other side of the minimum wage debate, which is that most of the specific numbers people list as "liveable" do actually result in some folks losing their jobs and becoming unemployable. There was even a recent BERKELEY study that showed this!
milesrout 2y ago
The labour theory of value that you allude to here makes no sense. People are paid at the market price based on supply and demand, just like other goods and services. Tech employees don't "bring in" the company's revenue. That makes the mistake of attributing the products and services of a business to its workers. >wages haven't tracked productivity growth since the 1970s. Propaganda. Productivity growth literally is just wage growth, by definition. It is impossible for them not to track each other.
- xyzzy123 2y ago
  https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ The graph on this page disagrees, can you explain please? I haven't heard anyone say the two concepts are the same before. As I have heard it "productivity" is roughly gdp/hour, which can be different from wages/hour (but you generally expect the two to be related / correlated).
- snapcaster 2y ago
  >Productivity growth literally is just wage growth, by definition. It is impossible for them not to track each other. I don't understand what you mean by this. If i own a business, and employee productivity increases but i don't increase wages doesn't that disprove your statement?
  - milesrout 2y ago
    Productivity as a macroeconomic measure (which is what is being discussed here) is just a measure of wages.
- toss1 2y ago
  >>Productivity growth is literally just wage growth, by definition. No, it is the opposite, whether you are measuring Units Per Worker Hour or especially Units Per Worker Dollar. You have a dozen $25/hr workers in a factory producing 50 widgets/hour, and you now introduce new tools, techniques, and/or materials and they now produce 80 widgets per hour, productivity per hour and per dollar has risen, but worker pay is exactly the same. If you instead cut their pay to $22/hr their productivity in Units/WorkerHour is unchanged but productivity in Units/Labor$ has risen. It is ONLY in the limited case where you are paying 100% by piecework that productivity tracks wages, e.g., if those workers are paid $6/Widget produced and they manage to make 50%more widgets/hr, then their pay rises with productivity. But that is uncommon and labor cost is rarely the only input. Edit: typos

genewitch 2y ago

Minimum wage, fairly, should have been around $32 in 2019 or so. I haven't run numbers lately because it's depressing, but I bet it's worse now. You can't go off mcdonalds sandwiches, and you can't use the economic indicators that ignore food and fuel. I've heard wild numbers from "the dollar is worth 50¢ compared to 20 years ago" to "the dollar has lost 98% of its value in the last N years." I'm not an economist, but I do know my electric bill has been thr exact same dollar amount for 12 years, and I've halved my usage twice in those years. That puts the dollar purchasing power for power at 25% of 2013. Gasoline changes prices so much I can't really say, it's about twice as expensive for 87 here as 12 years ago, but 93 is 2.5+ times higher. Food? Don't get me started. I live in the rural south. I don't really care about price fixing in Los Angeles or silicon Valley.

milesrout 2y ago
There is no such thing as what minimum wage should be "fairly". What is the minimum amount you should be able to pay someone an hour? Surely it is the amount where if you didn't, someone else would pay them more. There are many people who do jobs worth much less than $32/hour. That min wage would just make them illegal to employ. >You can't go off mcdonalds sandwiches, and you can't use the economic indicators that ignore food and fuel. You can't use economic indicators that track volatile commodities either. We use baskets of consumer goods and the inflation tracking is very accurate in short time frames but it becomes harder to compare the further out you get. A TV today is much better than a TV even 10 years ago but it is hardly even the same product as one from 1970. >I've heard wild numbers from "the dollar is worth 50¢ compared to 20 years ago" to "the dollar has lost 98% of its value in the last N years." What is wild about that? If you had 50c then and you had invested it in even relatively poorly performing investments it would be worth much more than $1 now. >I'm not an economist, but I do know my electric bill has been thr exact same dollar amount for 12 years, and I've halved my usage twice in those years. That puts the dollar purchasing power for power at 25% of 2013. That you are not an economist is obvious. You are aware that dollars buy more things than energy from your energy provider according to your energy plan, yeah?
- genewitch 2y ago
  > What is the minimum amount you should be able to pay someone an hour? Surely it is the amount where if you didn't, someone else would pay them more. A livable wage in the geographic jurisdiction they are in. Including stuff like transportation, healthcare, food, heat, housing, and insurance. Glad you asked. oh, the company can't compete without exploiting workers? oh well.
  - SR2Z 2y ago
    > A livable wage in the geographic jurisdiction they are in. This is called the Iron Law of Wages. As its name implies, it's neither prescriptive nor pleasant - but it is guaranteed to be liveable. > Including stuff like transportation, healthcare, food, heat, housing, and insurance. The thing that trips people up is that the word "liveable" is a synonym for "subsistence," not "fullfilling." A wage that's only liveable would feel quite exploitative to most people.
    - gknoy 2y ago
      The intention of "minimum wage" in the US is not merely subsistence level. FDR said, "by living wages, I mean more than a bare subsistence level-I mean the wages of decent living." [0] The "iron law of wages" is instead an economic principle that wages tend to trend downwards until people are paid the minimum possible for subsistence. It's not meant to be a goal. 0: http://docs.fdrlibrary.marist.edu/odnirast.html http://docs.fdrlibrary.marist.edu/odnirast.html
      - SR2Z 2y ago
        There are ten million stated reasons for the minimum wage! Pretty much the only one that economists can agree on is that it's helpful to prevent abuses of monopsony power in small towns. Regardless of what FDR said, a living wage is guaranteed because people will not accept anything lower. The problem with a "decent" living is that reasonable people can disagree about what that looks like. Roommates? Children? An unemployed spouse? Vacations and retirement? It's not the government's job to guarantee all of that stuff and I would rather we focus on stopping wage and tip theft and protecting the rights of workers (banning noncompetes, decoupling health insurance, etc.) instead of increasing the minimum wage towards some poorly-defined goal. There's also the other side of the minimum wage debate, which is that most of the specific numbers people list as "liveable" do actually result in some folks losing their jobs and becoming unemployable. There was even a recent BERKELEY study that showed this!

milesrout 2y ago

The labour theory of value that you allude to here makes no sense. People are paid at the market price based on supply and demand, just like other goods and services. Tech employees don't "bring in" the company's revenue. That makes the mistake of attributing the products and services of a business to its workers. >wages haven't tracked productivity growth since the 1970s. Propaganda. Productivity growth literally is just wage growth, by definition. It is impossible for them not to track each other.

xyzzy123 2y ago
https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ The graph on this page disagrees, can you explain please? I haven't heard anyone say the two concepts are the same before. As I have heard it "productivity" is roughly gdp/hour, which can be different from wages/hour (but you generally expect the two to be related / correlated).
snapcaster 2y ago
>Productivity growth literally is just wage growth, by definition. It is impossible for them not to track each other. I don't understand what you mean by this. If i own a business, and employee productivity increases but i don't increase wages doesn't that disprove your statement?
- milesrout 2y ago
  Productivity as a macroeconomic measure (which is what is being discussed here) is just a measure of wages.
toss1 2y ago
>>Productivity growth is literally just wage growth, by definition. No, it is the opposite, whether you are measuring Units Per Worker Hour or especially Units Per Worker Dollar. You have a dozen $25/hr workers in a factory producing 50 widgets/hour, and you now introduce new tools, techniques, and/or materials and they now produce 80 widgets per hour, productivity per hour and per dollar has risen, but worker pay is exactly the same. If you instead cut their pay to $22/hr their productivity in Units/WorkerHour is unchanged but productivity in Units/Labor$ has risen. It is ONLY in the limited case where you are paying 100% by piecework that productivity tracks wages, e.g., if those workers are paid $6/Widget produced and they manage to make 50%more widgets/hr, then their pay rises with productivity. But that is uncommon and labor cost is rarely the only input. Edit: typos