- The article in the WSJ presented facts from the Labor Department. Rejecting facts because you don’t like who presents them is a recipe for a closed mind and ignorance. (The WSJ firewall is easily gotten around.)
- Current law is that if a union when an employee vote then the company must recognize them. It is not up to the company whether to negotiate with the union at that point. Some companies may have invited unions end and negotiated with them without the law but other companies only negotiate with unions because they are required by law to do so.
Why is there a difference between $10 and $15?
Okay – I was thinking of things like the Arlington Memorial bridge, which connects Arlington to DC, and (according to my local news) will have to close in 5 years if it doesn’t get $250M in repairs. From my reading, there are many, many bridges in the US like this, as well as many, many improvements and modernization that could be made to electrical and communications grids.
Isn’t that bridge part of the park and therefore on the park service budget? Most likely that’s why it hasn’t been fixed. Been a while since I was in the DC area, but aren’t they redoing the Woodrow Wilson, expanding it to (IIRC) 6 or 8 lanes.
There are a lot of roads and bridges that need attention in the US, but there are a lot that are getting attention as well, and I’m unsure whether pouring a ton of additional funds into infrastructure will really buy us all that much. For one thing, like I said in the past, this is pretty vertically specialized work today, unlike in the past when things like the WPA could just hand unemployed and desperate folks a shovel and they would start building roads. The people who would be doing this work are, by and large, the ones who are already employed to do it. Oh, you’d have to expand, but it would take specialized people to do it, and what you’d REALLY be buying is all of the machines and vehicles needed to do it, not millions of unemployed Americans looking for work, most of who aren’t qualified or probably even desiring to do that sort of job.
Not exactly - the bridge will have to close in three years if it doesn’t get $5 million in patchwork, which it is going to get. And I don’t think this is a good example of something that we could do but aren’t going to -
So it appears that most of the spending is from current infrastructure funding, not new and extra funding.
What we have been discussing is infrastructure projects that would give an ROI, and wouldn’t be done without new spending, and that would employ significant numbers of currently unemployed people. How many of the currently unemployed in Washington DC are qualified to work on bridge-building?
Regards,
Shodan
Point of order: the value of labor is what the market pays for it. A minimum wage sets a floor for the *value *of labor just as much as its cost.
There are things that are difficult for machines to do, and the investment wouldn’t be worth it for the some particular industry. Why doesn’t every cashier in America get replaced with a screen and a self-check out counter? Because sometimes you need to talk to a live person. For these jobs, maybe the machines are too expensive to replace people with, so you stick with hiring living humans to do the job, or the job is too difficult for machines to do.
You might be tempted to say that machine costs will come down, and that these jobs are dead ends anyway that will be replaced eventually. That’s not an argument against minimum wage either, as a low minimum wage would only delay, but not stop, the automation. So if the answer is we’ll replace people with machines eventually wherever we can find it, then we should still have minimum wage to allow people to move beyond poverty level sooner rather than later.
Automation is a problem, but the solution isn’t to pay people poverty level wages that requires the government to subsidize industries. The problems you list will happen anyway with increased automation and more advanced robotics. So in the meantime, the poor should just…what? Work 3 jobs? Have no savings? You don’t posit a solution to that which an elimination of minimum wage can solve.
Let’s take a look at it this way, which is worse: government giving private industry money so they can pay their laborer’s crap thereby spreading the cost of the company to the taxpayers, or government telling companies they need to pay their workers a minimum wage?
Both are bad in a sense that it requires some intrusion, but you’re making it seem like the former is worse. I’d rather have the former because we’ve lived though the latter and it was horrible.
Another choice, what’s worse: having a low or non-existent minimum wage so that companies can continue to exploit people legally, or having a higher minimum wage that pushes companies to automation faster?
Both are bad but I’d rather not legalize exploitation. Yes, there are robots and automation now, but I argue that such a thing was likely to happen anyway with or without minimum wage. Get rid of minimum wage, or have lower minimum wage, and you’ll still have automation. You know why? Because machines don’t need days off, they don’t complain, they don’t get hurt and file lawsuits. In your perfect world, people can be paid $1 an hour and probably have no worker protections all for the fear of losing their job to a robot. I’d rather risk that but give people the right to sue, to have vacation and sick days, and a higher pay. If the robotic revolution is coming anyway then in the meantime we need to make sure people have the resources to move beyond picking up the scraps.
For the record, I don’t think there will ever be a time that all minimum wage jobs will all disappear. Therefore, we need to make sure Americans are taken care of properly, though a decent living wage, benefits, and the protection from employers. The fear of robotization shouldn’t be to let employers treat employees like robot slaves
I’m just recalling the newscast, but from what I remember, the patchwork just extends the life for a few years, and I thought they said that for it to last past 2021 it would need a $250M overhaul.
Don’t know, but it’s a good question. I’d like to see research on stuff like that (delivered for my convenience :)).
[QUOTE=YogSothoth]
There are things that are difficult for machines to do, and the investment wouldn’t be worth it for the some particular industry. Why doesn’t every cashier in America get replaced with a screen and a self-check out counter? Because sometimes you need to talk to a live person. For these jobs, maybe the machines are too expensive to replace people with, so you stick with hiring living humans to do the job, or the job is too difficult for machines to do.
[/QUOTE]
This might have been a reasonable argument 5 years ago, but they are already replacing check out and cashier jobs with those machines, and it’s accelerating. Both the Walmart near me and the Smiths have over half of their old check out space devoted to automated machines, and I don’t see that trend reversing. Eventually you’ll have a few check out or cashier positions and the rest will be automated checkout. At some point it will be just like gas stations today…you have one clerk and a bunch of automated pumps, with the clerks main job being to see the soda or hotdogs, and customers pumping and paying for their gas at the pump. At some point even that clerk will be superfluous, though I concede that perhaps companies will keep that one guy on the job just in case. This isn’t pie in the sky, it’s freaking happening now.
The costs of the machines HAVE come down, and the technology and UI has gotten better…vastly better. We ARE replacing people with machines in these low end, unskilled categories, and that trend is accelerating, and will accelerate more if we try and force through higher and higher minimum wages. At the current levels we are already seeing more and more automation of these jobs…it boggles my mind how anyone could look around and thing that pushing for higher minimum wage wouldn’t accelerate that trend and basically result in fewer and fewer actual jobs doing that work. Granted, folks like me will get more work putting in the networks and infrastructure to support it, so I guess that’s the silver lining, but I fail to see how this would or could help the folks who are presumably your target audience for this.
How does forcing through increases to MW help? And I DO posit a solution that would disconnect people from this issue, though I concede freely that it’s got other issues, will cost a lot and would be a hard sell (plus open to abuse). I just don’t see how pushing MW up more would do anything except have the opposite effect to the one you and others touting it are going for.
Um, neither? Again, however, I don’t see how the government telling companies they have to pay higher minimum wage will actually have the effect you think it will. Will you also force those same companies to keep all the employees they currently have on those salaries? If not, how does this help anyone but those left with the few MW type jobs remaining??
I disagree that automation is necessarily bad, though obviously it’s going to cause some labor disconnects in the short term…it’s been doing so for over a century after all and that trend is also accelerating.
In what bizarro world would Wal-Mart actually hire a person at $15/hr and only get $12/hr worth of value out of them?
The real issue in this example is that there is a surfeit of presumably unskilled people willing to work for $10/hr, even though that’s below the $15/hr threshold that would allow them to not need government assistance. And, this is important, the other industries/retailers/businesses in the area are either hiring at the same rate for similar jobs, or aren’t hiring people with that skill and experience set at all. After all, why would someone work for $10/hr when there’s someone else nearby offering $13?
Ultimately, the problem is that there are a lot more fairly unskilled people out there chasing fewer, and less well paying jobs than in previous years. Part of this is the shift of manufacturing out of the US, part is due to automation of existing tasks.
I do wonder how the greater participation of women in the workforce affects all this in comparison with decades past; what would all the wage and unemployment numbers have looked like in 1960 had women been competing for jobs like they do today?
Santa Clara, for instance. $9 an hour to $11 an hour. San Jose is at $10.30.
As for the dime, it is around what I’ve seen quoted. But all you have to do is compute how much product each person in a store sells every day - total product divided by staff. Including almost pure profit things like soda. Is the price going to go up a buck? If so, each person sells two items an hour, and the store has real big problems.
If they are price constrained, some might come out of profit - but every store is in the same boat. And there is some talk of coordinating wage increases so as to not hurt stores in more generous cities.
This calculation does not include any consideration of increased retention and efficiency and other benefits like that.
do you have a reference for that? I do recruiting (for jobs significantly above minimum wage) and every minute I spend on it is part of turnover cost. So I believe it, but I don’t think I’ve seen any analysis of the cost.
Correct.
It’s one of those questions Bernie Sanders doesn’t wan’t to have asked.
Regards,
Shodan
Nope. But what it might do is to inspire companies to initiate procedures that get more out of workers. It makes more sense to train a higher paid worker. More money means you can get better people and give them more responsibility. More money might also mean less absenteeism because there is more to lose. Maybe they can afford a car so they can work later if needed and not be at the mercy of bus schedules.
Now one company does not automate in East Asia because wages are so low it makes no economic sense. But we don’t want to go there, I agree.
No, we can just go back to the labor laws in force in the '50s and '60s. Fair elections. And no free rides - if the union negotiates better wages for everyone, you don’t get to take advantage while not paying union dues - even if they don’t force you to join.
It was hard enough to get the current funding passed at a decent level. I agree that projects should be sorted by ROI. I suspect Bernie Sanders would also. We don’t want any Republican proposed bridges to nowhere, after all. But there is enough of a backlog of projects that I suspect there are penty of high ROI projects to suck up extra funding.
As for the unemployed in Washington, even assuming there are 0 who can work on bridges (unlikely) if you bring in workers who are qualified they stray in Washington, spend money there, and create demand for jobs the unemployed can do.
That is where a lot of benefits START to kick in if you have a family of 4. The limits are even lower if you have a smaller family.
Wal Mart is paying the minimum wage, they aren’t doing anything wrong. Its not their fault that we have systematically gutted unions over the last 4 decades. Thats on US, not them.
Right and wrong is ambiguous, and up for endless debate. The best you can say is it is not illegal. But I can say it is, in my opinion, wrong, and you can’t rebut it, except with your opinion to the contrary. Stalemate.
Walmart gives a poor person a job. I do nothing for the poor person. Who is worse me for doing nothing or Walmart for providing a job?
If you want to figure out how to raise wages, the first thing you need to do is try to understand why the vast majority of people make more than minimum wage, and why some industries pay more than others.
For example, why do auto workers make so much more than other unionized factory workers? Why don’t unionized T-Shirt sewers make $30/hr?
It has very little to do with unions or organized labor. It’s all about how much value a worker adds to a product or service. And in modern manufacturing, multiplying the value of a worker requires capital.
Auto workers make the money they do because auto workers have their labor greatly magnified by the huge capital investment that goes into modern factories, into processes and procedures that improve quality and efficiency, by global sales teams that move the products, etc. In short, financial and intellectual capital, along with worker specialization.
Let’s say you decided you didn’t need those rich fat-cats and their capital, and you decide to make cars for a living all on your own. How long do you think it would take you to make a car, even if the government granted you all the raw materials for free? What do you think the quality of that vehicle would be? How much do you think it would be worth, and do you think you’d make more or less money doing that than you would working on an auto assembly line?
The answer is that you’d probably spend a good chunk of your life building that car, and in the end it would likely be a pretty bad car. You’d have to learn how to do car design, you’d have to hammer and bend and weld using simply tools since you can’t afford multi-million dollars robots and fancy drilling/welding machines. In the end, you’d probably make pennies per hour.
So the next time you think a worker is always ‘exploited’ by those greedy fat-cats, you might want to reflect a little on how much time, effort, and money it took to build the kind of organization that gives you the possibility of making $20-$40 per hour.
But why doesn’t the company do all that, and then just hire people for minimum wage? Is it the union that stops that from happening? Nope.
From here:
First, salaries for UAW workers:
On the other hand, foreign auto workers in right-to-work states often have workforces that aren’t unionized, so they pay market rates for labor:
Those numbers are right in line with the others, and may even represent higher standards of living since Detroit is pretty expensive, and the other states typically have lower costs of living.
How come none of them are paying much lower? Say, $15/hr, or even $7/hr? Because wages are set by supply and demand, not by how much a business really wants to pay. Businesses would LOVE to pay all their workers minimum wage, but the market simply won’t allow for it if the worker’s productivity is high enough to warrant much higher wages. Employees simply won’t take the deal. Or, the types of employees that would take that deal will turn out to be less valuable, and when you are magnifying the value of their labor with millions of dollars of capital, small differences in worker skill or productivity can make a huge difference in the bottom line. A bad worker that screws up and causes a line to shut down for an hour can cause more damage than he’d make in a year. So auto workers are better off paying more for higher-quality workers.
So if you want to permanently increase the wages of workers, you need to advocate for policies that increase worker productivity and which increase the competition for labor, and that generally means policies that encourage capital investment, easier business startups and more rewards for entrepreneurialism and investment.
Trying to raise worker’s salaries through wealth redistribution or by raising minimum wage laws might work for some, for a while. But eventually you’ll just hurt worker productivity, causing stagnation, unemployment, or a slower increase in salaries from that point forward. There are no free lunches.
As for why worker salaries are stagnating: Not all of them are. Dealing in aggregates in this case is not helpful. You have to go industry by industry if you really want to understand what’s happening. In some salaries might be going up fine, and in others they might be declining or stagnant. The reasons could be different in each case.
But don’t forget that an analysis of salaries has to also include benefits, and it also has to include worker costs. Government mandates to increase benefits or which add costs to employment will be taken right off the worker’s paycheck. Sometimes explicitly in the form of FICA taxes or health care insurance mandates, and sometimes implicitly through indirect costs added to each worker to comply with various health and safety regulations. To the company, it doesn’t matter if an employee’s salary is $30,000 in cash, or $20,000 in cash, plus $5000 paid to a health insurer on his behalf, plus $1000 for an ergonomic desk chair, an increase of $1500 per employee for renovations required to meet some new employment standards act, and an increase of $2500 per worker in costs for the tools and automation because of new tariffs slapped on imports to ‘protect jobs’. Costs are costs. If every business incurs the same cost increases per worker, then the productive value of all workers decreases, and the amounts employers are willing to bid as pure salary are going to decrease.
In the south, I have no doubt that the large numbers of undocumented workers is seriously degrading the salary potential of unskilled laborers. Increase supply of workers without increasing the demand for them, and the bid price for those workers is going to fall. If there is widespread illegal labor being used, then expect minimum wage laws to drive even more citizens out of work, since the illegal workers don’t have that wage floor.
In terms of manufacturing jobs, we have a problem: Today’s young people apparently don’t want to do that kind of work any more, even at good salaries. Factory managers have been complaining about how hard it is to find labor any more, even at decent salaries. The average age of factory workers is going up rapidly as a result. One factory I visited recently had an average worker age well over 50, and they had numerous open jobs that they just couldn’t fill. They were offering over $20/hr. Millennials in particular seem to balk at these jobs, and the manager I talked to said lots came in for an interview, but when they saw what the work was they never came back, even when offered the job. They didn’t even need a college degree. That manager said his biggest labor issue was the looming retirements of many of his workers, and no one willing to replace them.
A related problem may be that new workers in general are valuing other things more than salary, in proportion to what they did in the past. You can make a really good living as a plumber or an electrician, but there are shortages in these fields because every kid now thinks the right path is to go to college, take a degree in anything that catches their fancy, then come out and get a nice white-collar job at high pay in a nice area with lots of facilities and amenities.
If more people are willing to trade off salary for better conditions or better location, then the market will adapt to that and it will look like there’s a problem with salaries declining, when in fact what you’re seeing is a change in preferences away from more salary and towards other intangibles. If a company has to locate its office in an expensive part of the city because workers don’t want to drive to the industrial area where rent is cheaper, that’s going to depress salaries. If employees demand a company lounge, fitness center membership, time off for paternity leave, a nice break room with a pool table, lots of green space and other perks, that raises the infrastructure cost per employee and depresses salaries.
There could be millions of reasons like this. This is why looking at aggregate numbers like average pay across the economy is pretty useless. And why national solutions like taxing capital more, putting tariffs on imports, or increasing minimum wages is going to be far too coarse a tool and likely to help some while hurting others.
Hypothesis:
If healthcare benefits are an increasing portion of compensation, especially for those with lower compensation, then some sort of scheme that decouples healthcare from the employer will result in higher cash wages.
It shouldn’t be too hard to find some data on compensation breakdowns. But the second part sounds tricky, since I’m not sure what the possible schemes are, and if they’d have different effects.