5 ms·

While that's true, there is some market clearing price in which the activity just ceases to exist. For instance, take something with a small marginal benefit l

by bko 1y ago

While that's true, there is some market clearing price in which the activity just ceases to exist. For instance, take something with a small marginal benefit like a dedicated person at a supermarket to bag groceries. It's a nice to have but the value to the employer is probably less than a $15 minimum wage. So you could say there is a shortage of grocery baggers since there is no one willing to do it at a market clearing price. Doesn't mean we should do anything about it. There will always be some extra activity that would take place at a lower price, but it's worth while to notice that.

the_real_cher 1y ago
That doesnt make sense to me. Seems like theres either a demand for something or there isnt. And the amount of demand sets the rate of pay. The invisible hand.
- frankc 1y ago
  Demand is a function of price. At any given price there is a quantity demanded. To know the price you also need to know the supply function. There is a demand for socks but if no one is will to supply socks for less a million dollars, the quantity demanded of socks at that price could be 0.
  - the_real_cher 1y ago
    In most markets seems like commodity level items and services like baggers and socks would have plenty of supply.
    - AnimalMuppet 1y ago
      In a free market, commodity-level jobs will only happen at commodity-level wages. But it's not a free market, because of minimum wage laws. If you set the minimum wage too high, the number of baggers may go to zero, not because of supply but because of demand - the price is higher than any grocery store is willing to pay. You can argue about the need for the minimum wage laws. You can argue about the morality of paying a living wage. But that's a different argument.
- deleted 1y ago
  [deleted]
- philipallstar 1y ago
  In some countries there's something called a "minimum wage" that sets the minimum value of a job that is allowed to exist, and any job that isn't worth that amount ceases to exist, or has fewer people doing it, or has partial or full automation doing it.
- alistairSH 1y ago
  There’s a demand, but the price we want to pay for “grocery baggers” is usually less than minimum wage, so the job usually can’t (legally) exist. The cost (wage) is fixed higher than the value added.
- WithinReason 1y ago
  The demand curve might not be gradual, there might be demand for e.g. 1 million jobs at $15 but 100 at $16
vharuck 1y ago
While reading the article, the now-less-common business of vacuum and TV repair came to mind. I imagine it's easier than ever to repair vacuums, with improved tools and free internet repositories of schematics. But I only know of one store still doing this within 5 miles of my house. I haven't asked former vacuum repairmen, but my guess as to the reasons: 1) Labor costs go up with inflation 2) Rent goes up 3) New vacuum prices go down At some point in the past, the downward line of vacuum price crossed over the upward line of repair cost. That's when this profession cratered. Cars may have a while until that price point hits. But the quoted mechanic's suggestion that engineers optimize for simpler repairs instead of simpler production may be something similar. If simpler production makes the price of a new car $X cheaper, but increases the labor cost of repairs over the car's lifetime by $Y, there could be a time when X > Y.
- ooloncoloophid 1y ago
  A quick note to say that at our local repair cafe we do a roaring trade in vacuum repairs for peanuts (not literal peanuts; though some of our repairers do get peckish). If you're in Europe, there's chance you have one nearby. https://repaircafe.org/en https://repaircafe.org/en
  - graemep 1y ago
    great idea. I get a "coming soon" type message for my town and search does not say where the next nearest is. I used the map and found the two nearest I quite far. plenty where I used to live, and a lot in other parts of the UK. Good to see.
  - digdugdirk 1y ago
    Could you please go in to a bit more detail on how you set that up, how you handle issues, etc? I'm a member of a makerspace, and there's been discussions about doing something similar. There's just not a consensus about how to go about it.
    - ramses0 1y ago
      Reach out here: https://dallasmakerspace.org/faq/ https://dallasmakerspace.org/faq/ (I'm not finding a good link for https://thelab.ms/ https://thelab.ms/ - another Dallas makerspace), but I'd suggest reaching out. ...generally I've seen weekly/monthly "fix-it" workshops as a kindof open-house / membership drive. Probably best to 1) have people sign safety waivers, especially if they're not members 2) have people sign a "we can offer to help you try, but your widget might end up worse than before" waiver 3) run it as a volunteer outreach event with a focus on getting membership rather than a transactional "fix my ____ for free" outcome
saghm 1y ago
It's not clear to me what the difference is between what you're saying and what the parent comment says. Not being willing to pay the wages necessary to hire someone is pretty much exactly what they're saying as well.
- marcusverus 1y ago
  They agree that corporations don't do things that aren't profitable, their implied disagreement is whether this is greedy/bad or merely rational/amoral.
- motorest 1y ago
  > It's not clear to me what the difference is between what you're saying and what the parent comment says. The key difference is whether rentism plays a role or not. It's one thing to claim that no one will pay a mechanic if it's too expensive. It's an entirely different thing to claim that some employers are abusing their position to pressure wages to stay low to maximize their profit margin at the expense of their employees. There's a good litmus test: is there a massive wave of car shop bankruptcies due to lack of business? Or are car shop owners complaining they can't get enough employees to keep up with demand?
  - nradov 1y ago
    The auto repair business is still pretty fragmented in most areas so as a practical matter employers can't really pressure wages. Mechanics change jobs all the time to get a raise. The industry has a relatively high annual employee turnover rate.
- graeme 1y ago
  The implied criticism in the original comment is that companies should pay more. They ignore that in a lot of cases it doesn't make structural sense for a role to exist above a given price.
motorest 1y ago
> While that's true, there is some market clearing price in which the activity just ceases to exist. The article cites a mechanic commenting on Ford CEO's remarks on lack of mechanics by referring to how Ford fails to pay rates for warranty repairs that justify the volume of work required to pull them off. This suggests the root cause is the automaker's refusal to pay for warranty work at a market rate. The article raises some points on how Ford both designed cars that are too expensive to repair and fails to pay mechanics to make their product line attractive for any maintenance business. This doesn't sound like a market efficiency issue.
- fragmede 1y ago
  Not just market rate, but being totally wrong! My read of that article is that it's not gonna take 40 minutes to do the job, but because Ford says it'll take that long, that's what they're getting paid for. It seems like the bigger issue is that Ford gets to say how long it will take and what they say isn't remotely right. There's similar weirdness with flight attendants and how they get paid, because they don't get paid if they're not in the air, or something like that. If you zoom out, it's about not being willing to pay enough money, and at that level you'd be right. But if we zoom in a little, the ways in which they're not getting paid enough is also relevant. If I want to get paid for a honest days worth of work, everyone else all the way to the top better also be honest. It sucks when they're not, but as long as my paycheck cashes, I've got better things on my plate to contend with.
janalsncm 1y ago
In other words, the existence of a minimum wage implies there is also a minimum job, a job which if it were any less valuable to the company they wouldn’t pay anyone to do it.
jayd16 1y ago
If the demand doesn't reach the minimum wage, is that even a shortage? I'm not going to pay someone to punch me in the face but I wouldn't call that a shortage.
dooglius 1y ago
> since there is no one willing to do it at a market clearing price In your example there would still be people willing to do it, but the government doesn't allow it?

by bko 1y ago

the_real_cher 1y ago

That doesnt make sense to me. Seems like theres either a demand for something or there isnt. And the amount of demand sets the rate of pay. The invisible hand.

frankc 1y ago
Demand is a function of price. At any given price there is a quantity demanded. To know the price you also need to know the supply function. There is a demand for socks but if no one is will to supply socks for less a million dollars, the quantity demanded of socks at that price could be 0.
- the_real_cher 1y ago
  In most markets seems like commodity level items and services like baggers and socks would have plenty of supply.
  - AnimalMuppet 1y ago
    In a free market, commodity-level jobs will only happen at commodity-level wages. But it's not a free market, because of minimum wage laws. If you set the minimum wage too high, the number of baggers may go to zero, not because of supply but because of demand - the price is higher than any grocery store is willing to pay. You can argue about the need for the minimum wage laws. You can argue about the morality of paying a living wage. But that's a different argument.
deleted 1y ago
[deleted]
philipallstar 1y ago
In some countries there's something called a "minimum wage" that sets the minimum value of a job that is allowed to exist, and any job that isn't worth that amount ceases to exist, or has fewer people doing it, or has partial or full automation doing it.
alistairSH 1y ago
There’s a demand, but the price we want to pay for “grocery baggers” is usually less than minimum wage, so the job usually can’t (legally) exist. The cost (wage) is fixed higher than the value added.
WithinReason 1y ago
The demand curve might not be gradual, there might be demand for e.g. 1 million jobs at $15 but 100 at $16

vharuck 1y ago

While reading the article, the now-less-common business of vacuum and TV repair came to mind. I imagine it's easier than ever to repair vacuums, with improved tools and free internet repositories of schematics. But I only know of one store still doing this within 5 miles of my house. I haven't asked former vacuum repairmen, but my guess as to the reasons: 1) Labor costs go up with inflation 2) Rent goes up 3) New vacuum prices go down At some point in the past, the downward line of vacuum price crossed over the upward line of repair cost. That's when this profession cratered. Cars may have a while until that price point hits. But the quoted mechanic's suggestion that engineers optimize for simpler repairs instead of simpler production may be something similar. If simpler production makes the price of a new car $X cheaper, but increases the labor cost of repairs over the car's lifetime by $Y, there could be a time when X > Y.

ooloncoloophid 1y ago
A quick note to say that at our local repair cafe we do a roaring trade in vacuum repairs for peanuts (not literal peanuts; though some of our repairers do get peckish). If you're in Europe, there's chance you have one nearby. https://repaircafe.org/en https://repaircafe.org/en
- graemep 1y ago
  great idea. I get a "coming soon" type message for my town and search does not say where the next nearest is. I used the map and found the two nearest I quite far. plenty where I used to live, and a lot in other parts of the UK. Good to see.
- digdugdirk 1y ago
  Could you please go in to a bit more detail on how you set that up, how you handle issues, etc? I'm a member of a makerspace, and there's been discussions about doing something similar. There's just not a consensus about how to go about it.
  - ramses0 1y ago
    Reach out here: https://dallasmakerspace.org/faq/ https://dallasmakerspace.org/faq/ (I'm not finding a good link for https://thelab.ms/ https://thelab.ms/ - another Dallas makerspace), but I'd suggest reaching out. ...generally I've seen weekly/monthly "fix-it" workshops as a kindof open-house / membership drive. Probably best to 1) have people sign safety waivers, especially if they're not members 2) have people sign a "we can offer to help you try, but your widget might end up worse than before" waiver 3) run it as a volunteer outreach event with a focus on getting membership rather than a transactional "fix my ____ for free" outcome

saghm 1y ago

It's not clear to me what the difference is between what you're saying and what the parent comment says. Not being willing to pay the wages necessary to hire someone is pretty much exactly what they're saying as well.

marcusverus 1y ago
They agree that corporations don't do things that aren't profitable, their implied disagreement is whether this is greedy/bad or merely rational/amoral.
motorest 1y ago
> It's not clear to me what the difference is between what you're saying and what the parent comment says. The key difference is whether rentism plays a role or not. It's one thing to claim that no one will pay a mechanic if it's too expensive. It's an entirely different thing to claim that some employers are abusing their position to pressure wages to stay low to maximize their profit margin at the expense of their employees. There's a good litmus test: is there a massive wave of car shop bankruptcies due to lack of business? Or are car shop owners complaining they can't get enough employees to keep up with demand?
- nradov 1y ago
  The auto repair business is still pretty fragmented in most areas so as a practical matter employers can't really pressure wages. Mechanics change jobs all the time to get a raise. The industry has a relatively high annual employee turnover rate.
graeme 1y ago
The implied criticism in the original comment is that companies should pay more. They ignore that in a lot of cases it doesn't make structural sense for a role to exist above a given price.

motorest 1y ago

> While that's true, there is some market clearing price in which the activity just ceases to exist. The article cites a mechanic commenting on Ford CEO's remarks on lack of mechanics by referring to how Ford fails to pay rates for warranty repairs that justify the volume of work required to pull them off. This suggests the root cause is the automaker's refusal to pay for warranty work at a market rate. The article raises some points on how Ford both designed cars that are too expensive to repair and fails to pay mechanics to make their product line attractive for any maintenance business. This doesn't sound like a market efficiency issue.

fragmede 1y ago
Not just market rate, but being totally wrong! My read of that article is that it's not gonna take 40 minutes to do the job, but because Ford says it'll take that long, that's what they're getting paid for. It seems like the bigger issue is that Ford gets to say how long it will take and what they say isn't remotely right. There's similar weirdness with flight attendants and how they get paid, because they don't get paid if they're not in the air, or something like that. If you zoom out, it's about not being willing to pay enough money, and at that level you'd be right. But if we zoom in a little, the ways in which they're not getting paid enough is also relevant. If I want to get paid for a honest days worth of work, everyone else all the way to the top better also be honest. It sucks when they're not, but as long as my paycheck cashes, I've got better things on my plate to contend with.

janalsncm 1y ago

In other words, the existence of a minimum wage implies there is also a minimum job, a job which if it were any less valuable to the company they wouldn’t pay anyone to do it.

jayd16 1y ago

If the demand doesn't reach the minimum wage, is that even a shortage? I'm not going to pay someone to punch me in the face but I wouldn't call that a shortage.

dooglius 1y ago

> since there is no one willing to do it at a market clearing price In your example there would still be people willing to do it, but the government doesn't allow it?