All of which points out that the employer and the employee are not on a level playing field.
Businesses won’t accept prices that don’t cover their costs, no one expects them to. If they do, they’ll eventually go out of business.
Yet employees are regularly expected to work below costs. It’s expected. Yet, if an employee is forced (and yes, they are often forced regardless of protestations to the contrary) to work at below cost, he can’t go out of business (unless he’s willing to live under a bridge or simply die). All he can do is go deeper and deeper into debt, or not pay his bills at all (bringing us back to the bridge or death).
The consequences of failure for a business and the consequences of failure for a person are different. It’s not a level playing field. This is where unions and minimum wages come in, in an attempt to level that field.
Really? How much would you pay a janitor? Knowing that you can likely find someone to perform the work for minimum wage, why would you pay more? Why would anyone invest in your company if you’re spending more on labor than you have to spend to operate?
[QUOTE=spark240]
This is pretty key to me. I think of it every time mandatory minimum wage is debated. In short, if you can’t formulate your business and its constituent jobs in a way that every employee is worth more than minimum wage to you, you’re a pretty crappy businessman.
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And the practical side effect of this is that either you heavily automate and eliminate the jobs that ARE worth less than minimum wage, you use illegal immigrants who are willing to take less for those jobs or you move your production or services offshore to some place where the workers are willing to work at those wages. Which means that any way you slice it, you don’t keep those jobs anyway, or if you do (and you are in fact paying more for labor than whatever good or service you are producing with that sub-minimum wage job is worth, price wise) you have to raise your prices…and be subject to the other companies who take one of the other alternatives.
Why wouldn’t the employee be the one to decide if the job pays enough to accept?
ISTM that any time someone accepts a job, he is deciding that the job, overall, is better than all the other choices available. Including, I guess, no job at all.
But these kinds of living wage proposals founder on the same problem as they always do - you cannot, in a global economy, raise the value of someone’s labor by fiat.
If your work produces $10 per hour in value, an employer can hire you at anything up to $9.99 an hour and still make a profit. If there is a law in place saying that you must be paid $10.01 per hour, because that is a living wage, you are not going to get hired.
Or suppose you pass a law saying that, if you have children, you have to be paid at a higher rate than singles. Very well intentioned, no doubt. The first thing an employer does in that case is fire all the single mothers working for him, and hire someone cheaper.
Good intentions are a fine thing. But they don’t generally overrule the laws of supply and demand.
The vast majority of minimum wage jobs are not able to be automated. They are cleaning, service and other jobs like clerking. If it could be automated , it has been or will be.
You’re right, it’s not a level playing field at that level. However, it is a level playing field in that everyone has the opportunity to become an employer, rather than an employee.
We live in a competitive world. Some will win. Some will lose. Some are born to sing the blues.
When the bell rings, you come out with your hands up and defend yourself at all times. Maybe you beat the other guy, and move up in the world. Maybe you get knocked flat on your ass. If so, you get back up and fight some more. Or you lie down and get counted out.
That’s what I’m advocating. I’m saying that the only reason that there could be jobs worth less than minimum wage (for non-disabled adults) is that the employers have done a poor job of formulating them.
If cleaners and clerks aren’t worth more than minimum wage to you as a businessman, you’re doing something wrong.
[QUOTE=davidm]
All of which points out that the employer and the employee are not on a level playing field.
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It’s more a buyer/seller dynamic. The seller doesn’t HAVE to sell at a given prince point, and is free to try and get the buyer to pay more if they can. However, it’s ultimately up to the buyer as to whether or not they are going to buy.
No, it’s not ‘expected’. Again, think of it in terms of buying and selling. The buyer might ‘expect’ to buy at a certain price, but there isn’t anything forcing the seller to have to sell at that price. It’s up to the seller to DECIDE if the price offered is acceptable.
Horseshit. No one forces anyone to work in the US. It’s illegal since it’s basically slavery. Even if you live in an area where your options are limited and you have no legs and no car, you still have the option of federal assistance. Or working multiple jobs.
Exactly. Labor can pool itself as a collective resource and attempt to demand higher prices for what they are selling…labor in this case. This may work, or it may not, but it gives labor some leverage in negotiations.
Which just illustrates the whole problem with our current way of doing things. You’re making my argument for me.
We end up with businesses being able to play individuals against each other, either in the same town or around the globe. It ends up being a race to the bottom for the worker while the businesses prosper.
Before anyone accuses me; God knows I am NO communist. Free enterprise is the way to go. But something needs to change in the way we do it. We have a system where it’s expected that people will work at jobs where their basic costs aren’t even met.
That is wrong. I’m sorry, but it is. All the arguments against that that I’m seeing here consist basically of saying, “oh, but that’s just the way it is”.
The employer has to balance the needs of the worker with the needs of the shareholder. I’m not necessarily eager to put my money into a business that makes a habit of overpaying employees, to my financial detriment. It also does not help to treat your employees like chattel, you get high turnover, lose your best workers, have high cost to hire and train new people, it can be a bad business decision. Go into your local Circuit City, and see how trashing their highest paid/highest skill staff worked out for them.
The morality / greater good issues should be handled by the government, applying appropriate constraints to the labor market, all we should demand of companies is that they abide by the law.
[QUOTE=spark240]
That’s what I’m advocating. I’m saying that the only reason that there could be jobs worth less than minimum wage (for non-disabled adults) is that the employers have done a poor job of formulating them.
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But it’s not the only reason. In fact, I’d say that the driving reason for jobs that are worth less than minimum wage comes down to price. People WANT to pay less for stuff. They like fruit that is cheap, or manufactured goods that are cheap. And at a certain price point they aren’t willing to pay more for them. Certainly not if they can get that same good or service cheaper somewhere else.
If a job and the labor it value adds to a specific good or service is actually only worth $4/hour and you force businesses to pay $8/hour then you are decreasing value…especially if in fact there are folks who would take that job for $4/hour. And we all know that there are plenty of folks who would jump at $4/hour, especially in other countries.
I think that’s the disconnect here. People are thinking of the US as an isolated entity or a closed system. We aren’t. Companies today can literally get labor anywhere in the world, so if you want to compete for jobs you are competing with folks in India, China, Central and South American and everywhere else that someone COULD build a services or manufacturing center. The only balance point there is the cost to ship goods and services from where ever you are making them to someplace like the US. If the labor+logistics costs more than labor in the US, then you are going to use US labor. If not…then not. And if you aren’t willing to allow low end jobs in the US below some arbitrary minimum wage then you have a accept that a lot of jobs are going to move somewhere else, or be automated (which means the same thing in terms of jobs for people wanting to work).
Again, wrong. It’s not me, as a businessman, who decides this…it’s the consumers of my goods or services who decide. If my competitors are selling goods and services at X, but my costs are X+Y (where Y is a higher labor cost) then wrt price I’m at a disadvantage, so I’d need to convince the consumers as to why they should pay a premium for my goods or services, instead of pay less for my competitors. Businessmen don’t set arbitrary costs for labor, and don’t decide what a job is ‘worth’…they load their costs in whatever it is they sell, and then have to look around to see what other companies producing competing goods or services are charging. THAT’S what ultimately sets the ‘worth’ of labor…the loaded cost of the good or service being offered, and what the consumer is willing to pay for it.
[QUOTE=davidm]
Which just illustrates the whole problem with our current way of doing things. You’re making my argument for me.
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So, what you want to do is to tear down the whole capitalist system and replace it with…?
Let’s say, for the sake of argument, that you are correct here. What’s the solution? If you want to pay people more then it means that goods and services are going to cost everyone more. That’s the reality. Unless you plan to nationalize all business and run it at a loss (or at least not at anything as dirty as a profit). What’s your plan to make this work? How will you pay people a ‘living wage’? Will you impose this globally or just in the US? Will you disallow imports or set high, heavy tariffs on any imported goods and services? How will you make people buy goods and services for more than they want to pay for them? How will you make them buy goods and services that attach a ‘living wage’ on the price?
I don’t think you are a communist, but what’s your solution? You have to factor in some reality here. If you want to pay people a ‘living wage’ then surly you realize that this is going to increase costs…right? So, who is going to pay those costs?
No…people are attempting (badly in my case, obviously) to explain the reality of the situation to you. You can’t simply wave a magic wand and give people a ‘living wage’…especially if the cost of their labor is beyond the value their labor adds to the good or service they are using that labor to achieve. And the US isn’t a closed system…there is a whole wide world of folks willing, even eager to work at prices far below our own minimum wage. So, what’s your solution? Just saying that the status quo sucks isn’t really enough if you don’t have a viable alternative.
Unnaturally low wages might be detrimental to productivity, and not just for the obvious reasons of high turnover and low commitment. I heard a presentation about factory automation projects. Many projects which would make sense here don’t make sense in Asia because salaries are so low that it is cheaper to hire lots of people to screw screws in than to capitalize a machine to do it for you. But in this case you are giving up on quality improvements, riding the curve to even better machines, and reducing the need to simplify your products.
I can not legally ask during the hiring process about someone’s expenses to feed their family. This would make it a bit difficult for me to alter the living wage that I would need to pay someone, or to fiscally make any plans.
Living wage for a single, non-drinker, shares an apartment with a buddy? Or is it a home of their own, with enough cash for Xbox, cable, and a couple of premium channels? Do I need to pay enough to cover their stay-at-home spouse and 2.1 kids?
Screw that - I offer competitive market wages. I give raises when someone gets more skills, shows more ability, or they acquire enough institutional knowledge that replacing them would be a bitch. Replacing workers that leave costs me 3-6 months of pay, easily.
I do try to pay the minimum I have to, so that I can either pay myself more or expand. But I will pay what someone is worth, plus a bit to keep them from looking for another job.
I don’t know. We’ve automated vacuuming at our house, thanks to our Roomba. You can’t eliminate clerking jobs with automation, but you can make them more productive and thus better paying, assuming the employer is willing to share productivity gains with employees. If people like bank tellers now handle primarily difficult transactions, they deserve more.
Please give a cite that the total number of unfilled jobs in the US today is anywhere close to the number of officially unemployed plus those who have dropped out of the search and are no longer counted. And don’t bother to link to managers complaining about the shortage of people meeting some very specific requirements and able to start right this second, trained by another company, since these managers don’t want to train anyone.
I’ve got an opening, but it requires several years of post-graduate education in a very specialized area. It does nothing to help the laid off carpenter to find work.
Except that bank tellers used to have to be able to count fast and accurately. Then we had cash counting machines, so they are more productive but also less skilled and more easily replaceable, so maybe their wages should go down, and the guy who invented and produced the cash counting machines should share the gains in both productivity and lower wages.
Bank tellers used to have to know a lot of procedures and rules, that are now implemented into the software they use. Most of the goof-ups they could have made in 1960 are caught by the system now. So again they can be less educated and more easily replaceable. Again the employer can and should pay them lower wages than (say) a janitor, whose job is at least less pleasant and maybe no more taxing intellectually. So the gains from higher productivity and lower wages should go to the software companies/developers and the banks that employed them, not the tellers.
Which is why we need government. Businesses can maximize profits by dumping their sludge in our rivers, hiring child labor, colluding with competitors, as well as paying the absolute minimum the market will allow. Or selling mortgages to people who can’t pay them off. Someone needs to look at externalities and prevent businesses from doing things in their short term best interests but against the interest of society as a whole. If a business can’t make a profit without screwing the rest of society, it needs to change its model or go out of business..
But by counting faster (and only once) they serve more customers, and so make more money for the bank. This is a good example of employer bought productivity, since the bank needs fewer tellers (and the machine inventor of course makes money too.)
In my bank the ratio of specialists who open new accounts and such to tellers has climbed a lot over the past 20 - 30 years. You can get a better class of teller if you need to hire fewer of them, tellers who not only count money but who also sell bank services and deal with the kinds of transactions ATMs can’t deal with. I almost never use a teller, except to get into my safety deposit box, but the better paid checkers at my Safeway versus the nearer Lucky’s are a big reason I spend my money there. They are empowered to take care of the little problems that the Lucky’s checkers have to call managers for, speed the line, and make us feel they actually care about our business.
Low ball pay for customer facing clerks, and you get the stereotypical fast food worker who clearly doesn’t want to be there. Pay decently, leverage productivity, and you build sales and keep customers.