So this is what educated people who research this stuff will tell you. Which is exactly what I’ve been saying.
Worker productivity is up, wages are down.
That’s not because of his “value” in the “market” but because of coercive and abusive business practices.
And I don’t need to be a PH.D to understand that. I can see it in real life, happening from a first person perspective, in a job that allows me the following experience:
Seeing high turnover first hand due to low pay, no benefits, and reducing hours arbitrarily.
Watching companies I’ve worked for target and abuse workers who try to exercise their legal right to collectively bargain
Seen the actual data in these companies firsthand, due to being a manager, which show the ACTUAL value and ACTUAL productivity of every worker, compared to their stagnant pay.
So I know what I’m talking about, and I see the real problem and I know what causes it.
It’s most definitely not a fiction, these are facts. I know facts are distasteful to you, but you can figuratively suck on em.
[QUOTE=Askthepizzaguy]
No it is not. When companies engage in practices that are designed to prevent the workers from gaining leverage, that reduces the bargaining power of the worker.
[/QUOTE]
Only if you have zero other options for employment. Otherwise Shodan is correct…your labor is worth exactly what someone is willing to pay you for it and you are willing to take for it. Otherwise you both couldn’t come to an agreement, and someone else would have to decide if they wanted the job instead. If NO ONE is willing to take the job at the price that a given company is offering, then that company will either have to increase it’s offer, throw in some other incentive, or not fill that position. By taking the job, however, you have agreed to the price offered. If it’s less than your labor is worth, then you are free to take your labor to some other pizza (or whatever) place and get a better deal from them. If you can’t, well…then your labor is worth less on the market than you think it is.
What a worker is willing to take as payment for his labor is also influenced by whether or not the worker or the workforce is able to bargain collectively. When their right to legally bargain collectively is trampled upon, through coercion and punitive practices (as witnessed by Wal-mart workers when I worked there, and as witnessed here, and at all levels of minimum wage help) then they essentially are left unable to bargain.
If the employers in a region, such as Papa John’s, Pizza Hut, and Dominos agree that they will set the price of their labor low, then it’s pretty simple, there essentially is no where else for the worker to offer their services, not in that region anyway. When companies engage in punitive practices against their own workers for attempting to organize and invent reasons to fire them, that makes it harder for them to find work and also stops the collective bargaining process.
In many regions people do have essentially zero other options for employment. In small towns like the ones I grew up in, for example, sometimes the major employer (a factory) shuts down and with it goes all the jobs pay higher than minimum wage. Not every town has a nuclear research facility to go get hired at. Some places have a supermarket and a gas station and a pizza joint. Some places already have jobs with better leveraged positions filled. What remains is a workforce without any bargaining leverage and in no position economically but to accept whatever wages are available.
When companies abuse their positions and** leverage artificially lower pay** for their own workers, as they did arbitrarily in the pizza business (example being the driver pay cut) that means that employees have no choice, often times, but to accept. Their only means of leveraging their position to negotiate the pay that they are actually worth to the company- * -is to present the labor pool as being** universally unwilling to accept lower pay**, via unionizing. And companies frequently engage in practices which disrupt the ability of workers to bargain.
(* - as already demonstrated, FACTUALLY, in my previous posts, worth and productivity and value of the worker is NOT COUPLED TO THEIR PAY)
My opponents in this debate continue to conflate the value of a worker (which is an actual value that can be calculated in almost any company- it is directly related to their productivity i.e. worth to the company) with their pay (which is not coupled to their productivity or worth to the company).
You’re wrong. Your only argument so far has been to state as fact, when it is demonstrably false, that worker value equals pay.
This isn’t religion, folks. You may feel free to believe whatever you like, but some things aren’t debatable, such as the definitions of words and their meanings. These are objective facts. And numerical quantities for worker value actually exist and are provably NOT EQUAL TO PAY.
You’re proven wrong. You don’t even have a leg to stand on in this discussion, but by all means continue to go “no it isn’t” as if you had an argument. You don’t, you lose.
There is nothing unfair about hiring you for less than you want.
Yes it does. It means the worker is worth half minimum wage, or whatever they can pay you to get you to work.
No, you are just raising the marginal cost of employing that worker.
Unions are a form of labor monopoly, the flip side of the employment monopoly you think you see.
That’s why unions get so cheesed off with the scenario where they go on strike, and the company fires them all and starts over with scabs. Because that tactic shows that unions don’t raise the value of their workers - they are merely an attempt to impose what amounts to a monopoly.
Exactly. There is no need to pay more, because the workers are willing to work for what they are getting. Because there are other people in the same labor market who are willing to work for eight bucks an hour. So if you demand ten bucks, you get fired and someone else gets your job.
Similarly, if the company wants to hire IT guys, and they offer eight bucks an hour, they aren’t going to find anybody. Because there aren’t other IT folks around who are willing to work for eight bucks an hour, instead of (say) delivering pizzas. So the company notices that, and jacks up their offer to $40 an hour. They can do that, because IT guys generate more revenue than pizza delivery guys.
And that’s how IT guys get more money - not by unionizing, but because their labor is more in demand than some schmuck with a driver’s license and the Camaro he got from his mom.
No, not necessarily. It depends on if there are other folks around who are willing to work for eight dollars an hour. They can only get ten if they can shut out the eight-dollar-an-hour workers, by creating a monopoly on labor by unionizing.
Of course, this still raises the marginal cost of labor, which explains why right-to-work states have lower unemployment rates overall than heavily unionized states.
I usually interpret statements like this as a confession that you have no idea how to react when someone points out that your premises are wrong.
I thought you were claiming that the big bad company could force you to work for whatever they said. Here we find out that you didn’t know what you were talking about all along.
Imagine my surprise.
Exactly.
The other drivers left, because they decided their labor was worth more. If they were able to find other jobs that paid more, or the same as before the alleged cuts, then they were correct. If they couldn’t find other jobs, then they were wrong, and their labor was worth what was offered.
You are making a fundamental mistake.
The market is not in the business of judging worth. It is a method of setting price.
No, I equate the value of things that can be bought and sold with whatever I can get someone else to pay.
No, I’m not, and yes, it does.
Correct. It has nothing to do with the value of people. It is a question of what the market will bear.
We have already seen from your pizza driver example that this is not the case. The pizza chain was not able to stop them from seeking other employment.
So you must be wrong.
Actually, it does. The IT industry is non-unionized for the most part, and pays better than most. So unions are not necessary for skilled labor.
So, again, you must be wrong.
You might want to save this kind of foolishness for the Pit.
[QUOTE=Askthepizzaguy]
What a worker is willing to take as payment for his labor is also influenced by whether or not the worker or the workforce is able to bargain collectively. When their right to legally bargain collectively is trampled upon, through coercion and punitive practices (as witnessed by Wal-mart workers when I worked there, and as witnessed here, and at all levels of minimum wage help) then they essentially are left unable to bargain.
[/QUOTE]
Sure…if you can collectively bargain you have more power at the table wrt wages. No one is saying differently. However, pizza makers don’t have a union, nor are they organized…so, if you go into that work field, and choose to take a job with a pizza place, then your labor is worth what you can get for it. You could choose not to go and work for a pizza place, and instead try and work for a place with a union…it’s your choice.
Horseshit. There are minimum wage laws that are in effect. Pizza places like Papa John’s or Pizza Hut or whatever can choose to set their wages at the minimum, or if there is competition for jobs they might try and outbid the competition. If minimum wage does not get the workers they need, THEN they would need to do something to rectify that. But it doesn’t, because there are more people who are willing to sell their labor for minimum wage to those places than they need to fill all their positions.
You seem to think that every place and company is obligated to allow a union…and that a union is the answer to every problem. I mean, a pizza makers union? And this will solve the problem of how unskilled pizza makers or cashiers labor is worth more than minimum wage?
You grew up in a place that had a factory and a Papa John’s and nothing else? And they fenced everyone in and you weren’t allowed to leave…ever? :eek: That does sound grim. For most people, though, there are always other options…or, if there aren’t, there is always moving somewhere else where there are other options. Unfortunately, if your skill set is at a minimum then you are only going to command minimum wage no matter where you go. Unless you can get in a union, then you can command more for your labor than it’s worth. I’d go that option…move somewhere you can be in a union.
I will briefly respond to some of the more egregiously incorrect statements before shuffling off for the night. I can’t school you forever, certainly not for what it pays.
That’s not what the worker is worth, and I’ve already covered this.
What the worker is worth is directly related to what the worker yields for the company in terms of revenue. For example, a delivery driver accounts for about 70 percent of the business in a pizza place, and often delivers a hundred to two hundred dollars worth of pizza in any given hour. Sometimes less, depends on the size of the orders.
His actual value to the company is how much he, and the rest of the team at the store, yield to the company. That’s why we use the word yield. These are real terms with real definitions, as opposed to making up axioms on the spot and refusing to argue their merits.
In point of fact, unarguable, the worker is worth to the company much more than what the company pays them in return. In terms of real numbers. Even including after expenses profit. The company cannot generate those profits without those workers.
Therefore the workers, if properly able to leverage themselves, could force their pay closer to their actual worth, one example of which would be to threaten to strike en masse.
When the company realizes it won’t earn a dime without the labor force, and that the resulting costs of rehire and PR disaster and loss of revenue end up causing the company more misery than simply giving the workers more equitable pay, suddenly the worker is earning an amount that more closely resembles his actual value.
And at no point did the worker actually increase their value to the company. They are still generating the same productivity, they are just recapturing a greater percentage of their own productivity.
This is the simplest of the simplest aspect of economics: A better bargaining position yields better results. And prices are not always equal to value. You purchase a bunch of stock that ends up being worthless, then it wasn’t worth what you paid for it. You purchase a bunch of stock that ends up being worth millions, then it was worth more than what you paid for it.
That very difference in worth, and price, is what drives a big part of our economy. Otherwise investors wouldn’t exist.
So you can stop conflating the price an employer is willing to pay for a worker, with how much they’re actually worth.
In every demonstrable, factual sense, you are wrong. Completely in error. Indisputably.
Well, that’s not true. You can dispute it until you’re blue in the face. Doesn’t make you correct.
Much of the rest of your post was a bunch of “No it isn’t”, while I went through the process of demonstrating why I’m factually correct, you took the lazy way out. So most of it isn’t worth responding to. Particularly since I’ve already destroyed it.
You can keep building your house of tiddlywinks but I will get bored with pushing it over eventually. When I make my point that it’s made of tiddlywinks and prove it by pushing it over, that’s pretty much the end of the debate. I’ll not waste my time re-arguing points I’ve already won.
Again, hardly a comprehensive response, just going towards what meat I can find on these bones with the time I have.
The problem is that the companies actively work to remove choice, by disrupting attempts to form a union. Often using illegal methods, which is why many large companies get lawsuits on their hands due to unfair or unethical labor practices, and this happens often.
Your argument is predicated on fairness and choice, my argument shows that companies actively remove both from the equation, resulting in a disconnect between worker productivity, which is value derived by the worker, and wages, which they are entitled to collectively bargain to attempt to raise when the company does not offer a living wage.
When there are more workers than available jobs, there are not as many options as you think, and moving somewhere else is usually a very large financial burden, particularly on the poorest classes, where such an expense can be larger than their monthly wage by a long shot, and they don’t have the money to afford to pay all their bills as it stands.
One can not always conjure money out of thin air.
The point is, workers returning to the bargaining table with unions, or if not possible, mandatory minimum benefits (such as those allowed by the affordable care act) make it possible for them to both eat AND see a doctor on occasion.
What is actually horseshit is opposing a 14 cent increase in price because it’s too much to ask for a worker to be able to see a doctor when their appendix is inflamed.
So if we want to talk about horseshit, let’s talk about what is actually being asked for.
Are the workers demanding 15 dollar an hour wages? Pensions? Company provided vehicles? What are they asking for?
They ended up getting 14 cents to pay for insurance to cover doctor’s visits. And the only way this was able to occur was by government action, for many of these laborers. That’s because the “free” market doesn’t allow for workers of a certain income level or class or industry to be able to argue effectively for things they absolutely need in order to survive.
It’s not Mercedes-Benz in every garage that we’re talking about. But when workers cannot even see a doctor because they don’t get paid enough, they’re not paid enough. When they ask for more and don’t get it simply because they’re not in a leveraged position, that doesn’t reduce the inequity of the situation.
And given how the solution ends up costing the employer nothing, as it passes the cost onto the consumer, I find all this whining about the cost increase by folks like John Schnatter to be laughable, if it weren’t so intentionally deceptive and greedy. Which was ultimately the point of the debate.
Bricker has yet to return and answer my charge that by his own words, Schnatter has met his own definition of greedy.
As such, I’ve won that debate, hands-down.
I will return to play with the rest of the kids in this sandbox later. But spoiler alert: So far, you’ve not a single bucket full of sand.
Well, shouldn’t an employee’s value to a company be based on how much he produces (which I think you are calling his “worth”) minus what he costs the company (in this case, his wage?). Ie. if an employee can produce $40 worth of value to the company at a cost of $8, isn’t he more valuable to the company than producing $40 worth of value at a cost of $10?
Why do you feel that only with collective bargaining is a worker getting “fair market value” for his services? Do you think the only way that oil companies get “fair market value” for their oil is by colluding to set the oil price? After all, it seems people are willing to pay much higher than the current price of oil, even if they don’t like it. Just because companies could conceivably still operate with higher labour costs doesn’t mean that they need to pay higher.
That being said, I understand that labour markets are sticky and it is possible for companies to exploit that. Personally I think the ideal situation is where sufficient social safety nets exist for people so that “wage slave” situations cannot occur - there should never be a situation where a worker is unable to walk away from his job lest he die. I don’t see unions as being a necessary component to implementing said safety nets.
[QUOTE=Askthepizzaguy]
The problem is that the companies actively work to remove choice, by disrupting attempts to form a union. Often using illegal methods, which is why many large companies get lawsuits on their hands due to unfair or unethical labor practices, and this happens often.
[/QUOTE]
Can you show me some examples of Papa John’s using illegal methods to block unions from being formed? Or why Papa John’s has to allow unions to be formed by their employees, legally?
My argument is that you always have a choice…if your labor is worth more than a given company is willing to pay you can always take your labor somewhere else. If you can’t take your labor somewhere else, then that’s not the companies fault (unless they are keeping you at work at gun point), but a problem you will have to overcome yourself…or not.
Just generically, in a given labor market, companies, especially companies such as Papa John’s that seems to be mostly local franchises with fairly low margins, an employer is going to pay the minimum for labor that the market allows…i.e., within the law (minimum wage), how much is the lowest I can pay for labor and still attract sufficient staff to maintain and operate the business? If you take such a job, then you have agreed that your labor is worth what that local franchise is willing to pay…if you think your labor is worth more, then don’t take the job and instead take your labor somewhere else.
Again, none of this is the companies fault. Labor is just another commodity, regardless of the emotional aspect. Whether there is a glut or dearth of labor, companies, within the confines of the law, will pay the minimum for that labor that they absolutely can and still meet their needs for that labor. That is simply reality.
You say that the answer to this is unions…and that Papa John’s has illegally (your word) blocked the formation of such unions. I have to admit, I don’t know the reality here, so if you want to make your case present your evidence (or if you’ve already done so, merely give me the post number and I’ll go back…I have to admit, full disclosure, I haven’t kept up with this thread, and was merely responding to the one part of your earlier post when I came back in). WHY is Papa John’s (well, the local franchises I suppose) obliged, under the law, to allow unions to form? How have they illegally blocked their formations? What do you suppose would be the effect on their bottom line if their employees were unionized (I don’t even see how this is possible, to be honest, since we are talking about franchises here, but again I’m no labor expert so maybe it is)?
Proclaiming yourself victor is generally a silly thing to do, and merely opens yourself up to scorn and derision. Just some friendly advice…it’s generally not done around here. YMMV though.
You may, of course, make any declartion you wish about this thread.
However, we are under no compulsion to accept your declaration as anything more than the posturing that it clearly is.
I’m not compulsed to, but as a person with half a brain I have no choice but to declare Pizza the victor due to Bricker conceding the debate with his semantic copout.
You already said this, and it is still wrong. The worker’s labor is worth whatever he can get for it.
Suppose worker X can generate $50 an hour in revenue for a company. X therefore wants $49 an hour. However, applicant Z for the job can also generate $50 an hour for the same company, but only asks $40 an hour. Maybe worker X wants $49 an hour, but he isn’t going to get it. Nobody in their right mind is going to hire X, since he will only create $1 an hour and Z will create ten times more profit per hour.
You think both X and Z are worth $50 an hour. They aren’t. Z is worth $40 an hour, and X is worth nothing. Because he isn’t generating any revenue for anyone.
The company can generate those profits with other workers, however.
So, they all go on strike, they all get fired and replaced with scabs. How much is their labor worth now?
Actually, the ones who got fired aren’t earning anything. And the scabs don’t get a raise either.
And that’s why they don’t get raises.
Exactly. The price of labor is not the same thing as the value of a worker, and every time you asserted it was, you were mistaken.
Hmmm…
Not as far as I can tell. You asserted that companies have an employment monopoly, and then helpfully provided an example of why that wasn’t true. You asserted that the worth of a laborer and the price of his labor were the same thing, and then denied it. You seem to assume that only unions are the way for workers to get a raise, and that’s obviously untrue.
Good, that leaves pretty much everything you have asserted open to discussion.
And this is why an unregulated free market is horribly inefficient at producing an optimal economy. Any time there is a labor glut, the free market solution is for wages to race to the bottom until laborers receive just enough resources survive and glad that they aren’t unemployed and starving but no more than that. This in turn reduces demand since the majority of the population doesn’t have any excess capital to spend beyond what they need to survive, which in turn reduces employment and increases the labor glut. End result a much lower standard of living for everybody with masses of valuable labor left underutilized. Eventually the revolution comes and a bunch of rich people find their heads on pikes, but hopefully with a little regulation and redistribution we can avoid that eventuality.
We don’t have an unregulated free market, wrt labor or anything else. That’s why we have minimum wage laws, yes?
There is a labor glut right now, mostly in unskilled labor or in skilled labor that isn’t in demand (such as building contractors…though that might be changing)…why aren’t wages racing to the bottom across the board then? Answer…it doesn’t work that way. UNSKILLED labor is going to always be the low factor, especially since with automation verse paying minimum wage, companies are going to game out the best deal they can. Now put in forcing companies to buy health care or pay a penalty and you’ll see even more of this. But skilled labor, especially in categories that are in demand is always going to be able to command top dollar, especially if companies have to compete for that labor.
To put it another way, if you have a thousand folks who can make pizzas with 30 minutes of training then you can pick and choose, and offer the lowest price you can (within the limits of the law), because of that 1000 you’ll be able to find the 3 or 4 people you need to make those pizza. But if you have skills that are in demand, then companies have to compete against each other to attract you. I have head hunters calling me all the time and asking if I’m available to interview. I have a friend that’s a plumber, and his services are ALWAYS in demand.
:dubious: That’s a load of horsehit. The majority of the population in the US does have excess capital for things like iPads, cell phones and going out to dinner every week. The majority of Americans do not make minimum wage nor work in minimum wage jobs.
The real issue though is that if you distort the labor market, as you and the OP are seemingly bent on doing, you price out labor in semi-skilled positions, and companies either automate or move offshore (where offshore could mean moving to another country with cheaper labor or moving to another state). That’s what’s happened to the (American) auto manufacturing in the US…the drive to maximize pay and benefits have killed the industry from a labor perspective. Companies have highly automated everything they can, or they have moved their manufacturing to other countries.
And that’s going to be the future trend. Push for more money than the labor is worth to a company and companies will simply shut down, automate or offshore/outsource.
Most of this is BS, but you are right…there is certainly a lot of labor in this country that COULD be being utilized but isn’t. Why do you think that is? Evil corporations wanting to stick it to the people? Or, perhaps, because US labor is costly and high priced, and there isn’t sufficient value add to it to make it attractive to many corporations? I’d say the latter is the case. Companies have options such as high levels of automation or moving their manufacturing to other places (other states or other countries) with lower labor costs (i.e. with people who are willing to sell their labor for a price that companies are willing to buy it for).
You and the OP see this as a bug in our system, obviously. Honestly, I see it as a feature. To backstop the unrestrained capitalism thingy, we already HAVE things like minimum wage laws, which while they definitely distort the market and probably cause a certain number of jobs to be un-offered by companies that use unskilled labor, keeps things from going too low.