Elizabeth Warren: Why Isn't The Minimum Wage Today $22/Hour?

[TaftFan]

What real wage is depicted here? U.S.? Average? Median? College educated? High school education? Etc. Thanks.

I know it is U.S. but I am not sure how the BLS calculates those things. My observation was that it coincided with the ending of Bretton Woods.

 

[jbauer]

Or maybe the obvious answer is obvious: there is a much bigger demand for CEO skills than low-end labor skills. Managing a company in the 80's was much different than managing a company today due to a myriad of factors.

Putting a nut on a bolt for 8 hours a day? Not so much. If anything, it's easier what with all the high tech tools and government work standards that CEO has to adhere to.

ANd of course, allowing unfettered transmigration increases the supply of labor, which also drives wage down.

Thats so bullshit that even you can't possibly believe what you typed. The skill set hasn't changed one damn bit since the 60s. The rat race might be a different course but the rats still race. Now days exec pay is taken from the common man by board rooms buddies, government under the table deals and pure and simple bullshit. Heck I drove by the powerball billboard today it was for $220 million or some big number like that. Its record is somewhere in the middle of the $300m's. Micheal Jordan over the course of his carreer plus his ongoing endorsment deals has been able to amass a fortune of $460M.

You're telling me that the proper demand for the most highly skilled CEO in the world should be double the record powerball and more then all the wealth Michael Jordan amassed? PER YEAR!!!!!

 

[amy31416]

If they raise the minimum wage, wouldn't the dems just tax 'em back into poverty?

 

[Humanae Libertas]

Translation: Let's raise unemployment even more!

 

[jbauer]

But her solution perpetuates the problem.

Go back and read my posts. None of them has said raising the minimum wage is the correct answer. All of them say that Warren is pointing to the EXACT undermining problems that we are. She uses minimum wage to illustrate the devaluation of our currency, Ron Paul used precious metals.

T

 

[jbauer]

Sure there's lobbying involved. No major corporation can survive without lobbyists, because, as Google and Microsoft found out, if you don't go after the government they will come after you.

But just think how the markets have changed, and how many old corporations have gone under or been bought out by bigger companies. All of these happen at lightening speed compared to a generation ago, and the pressures from international competition is much greater than it ever was in the past. Keeping a company alive despite the endless needs of everybody else - consumers, customers, employees, government, suppliers, banks... takes as much art as skill.

Meanwhile, sweeping the floor after everybody goes home is still pretty much the same job as it ever was.

Again complete BS. There is no CEO out there that has it any rougher then their comparable counterparts did in the 60s. The only reason "deals" move faster now is because information does. You're also not taking into account the massive middle management that helps do ALL of the operations the CEO does. I completely understand what I'm saying sounds socialistic maybe even a bit Marxist. But the cronyism that is America today is just that. We're slaves in our own filth because we've let the world get away with to much for to long.

 

[jbauer]

If they raise the minimum wage, wouldn't the dems just tax 'em back into poverty?

Well....it would kick all the "working poor" off government programs......again I'm not saying this is the right answer.

 

[anaconda]

The skill set hasn't changed one damn bit since the 60s.

It's changed light years. Where were Cisco networking certificates in 1960?

Now days exec pay is taken from the common man by board rooms buddies, government under the table deals and pure and simple bullshit.

angelatc affirms above that there is indeed government induced corporate cronyism. This is a different issue from a vast demographic of Americans failing to update their job skills.

You're telling me that the proper demand for the most highly skilled CEO in the world should be double the record powerball and more then all the wealth Michael Jordan amassed? PER YEAR!!!!!

I don't believe angelatc used the "should" word. I think what angelatc was saying is that, in the pervasive corporate cronyism environment of the U.S., a talented and well-connected CEO might literally cause the revenues of a given company to increase by far, far more than the salary paid to them by the board of directors. In other words, if the market rate for a brilliant person who is well connected to government is $500 million per year and that person can increase your profits by $600 million per year, it's something the board of directors will certainly do. And, yes, this can easily exceed Michael Jordan's current wealth, given consumer's preferences and disposable income, and their demand, or lack thereof, for an ethical form of government.

 

[malkusm]

Production has two inputs - labor and capital. It is a misnomer to assert that gains in productivity are due completely to the increased productivity of labor. In fact, I think it's a highly flawed argument when you consider how capital-intensive our economy has become. Productivity is increasingly capital-based, from the machines that have replaced assembly-line workers to the infrastructure that supports the internet and information systems, telecommunications, and so forth. Contrast this with the industrial revolution, which mostly revolved around the advent of the factory and its rapid acceleration of labor value.

Insofar as the productivity value of labor has increased over the past 30-40 years, it has mostly come in the form of increased knowledge, data, and information. Very little has been done in most industries and markets to increase the value of labor. Where labor has become markedly more productive (such as agriculture), you can thank the government for taxing and regulating the ever-loving crap out of it. Anecdotally, it seems to me that the areas where labor value should have increased the most in the last half century have been precisely the areas where the government has been the most involved.

 

[amy31416]

Well....it would kick all the "working poor" off government programs......again I'm not saying this is the right answer.

Thank god, we'll have more money for war, foreign aid and Michelle Bachmann wouldn't be able to gripe about that 50% that don't pay taxes.

 

[James Madison]

And workers should get a 5 day weekend.

Give me an 8 day weekend, and you've got yourself a deal!

 

[anaconda]

Again complete BS. There is no CEO out there that has it any rougher then their comparable counterparts did in the 60s.

The real wage for workers increases with their productivity increases. So, if you give a worker a computer and they are willing to learn UNIX, C++, networking, etc., they can be enormously productive and command a very high wage. CEO's, too, have the tools at their disposal to be more productive in 2012 than in 1963. Many of these are information related tools which require deep understanding and creativity in applying to business situations. I'm not sure where people get the idea that CEO's do nothing.

 

[angelatc]

Thats so bullshit that even you can't possibly believe what you typed. The skill set hasn't changed one damn bit since the 60s. The rat race might be a different course but the rats still race. Now days exec pay is taken from the common man by board rooms buddies, government under the table deals and pure and simple bullshit. Heck I drove by the powerball billboard today it was for $220 million or some big number like that. Its record is somewhere in the middle of the $300m's. Micheal Jordan over the course of his carreer plus his ongoing endorsment deals has been able to amass a fortune of $460M.

You're telling me that the proper demand for the most highly skilled CEO in the world should be double the record powerball and more then all the wealth Michael Jordan amassed? PER YEAR!!!!!

Indeed I am, although it's really none of your business how much somebody else makes. If you want to start a company and pay a CEO less than that, then you go right ahead.

But if you think that the working man will make more money if the CEO makes less, you're horribly mistaken. Executive pay is taken from the common man? Socialist bullshit. That money never belonged to the worker. Their labor is for hire, nothing more.

Go look at the profits those corporations are making, and tell me they're not also up significantly since the 60's. Corporations are much bigger now, too. A CEO back in the 60's probably had 4 - 5000 people under him. Now it's not uncommon for them to have 10 times that amount.

It takes less people though - when I first started accounting, there was a person whose only function was write checks. That's basically it. People brought the invoices up, already approved and totaled up. She did nothing but cut the checks, find a manager to sign the big ones, and mail them. Then the company bought a computer. In a decade, the company quadrupled in size, but my department stayed at the same staff level. One guy managed all that change - taking a company from the 60's to the 90's was a huge feat, and the only bullshit is that you think that running a company today is exactly the same as it was 20 or 30 years ago.

This class warfare bullshit has no place in a free market. I can't believe this is coming from Ron Paul Forums and not The Daily Kos.

 

[angelatc]

Well....it would kick all the "working poor" off government programs......again I'm not saying this is the right answer.

No it would not. It reduce supply of everything that people would buy, which would drive prices up, which would lessen demand, which would result in higher unemployment.

At that point wages should start to fall to correct the problem, but thanks to the idiots who think minimum wages help poor people, it can't. So prices stay high, and people stay unemployed until inflation corrects the over payments by devaluing the dollars.


Is this your first day here or what?

 

[malkusm]

The real wage for workers increases with their productivity increases. ... CEO's, too, have the tools at their disposal to be more productive in 2012 than in 1963. Many of these are information related tools which require deep understanding and creativity in applying to business situations.

This class warfare bullshit has no place in a free market. I can't believe this is coming from Ron Paul Forums and not The Daily Kos.

+rep all around

 

[anaconda]

It is a misnomer to assert that gains in productivity are due completely to the increased productivity of labor.

Capital increases the productivity of the labor that uses it and is added until the diminishing marginal product becomes less than the cost of that capital. The labor must have the skills to operate it, however. And herein lies our national problem. We have an increasingly poor segment that cannot effectively use the ever evolving and improving capital.

 

[angelatc]

And another factor that's being ignored is buying power. Back in the 50's and 60's, a television cost 6 months worth of wages. People made and mended their own clothing to save money.

Today, I can drive around on garbage day and pick up working electronics off the curb. A new TV costs about a week's worth of wages.

Household spending on food, housing, utilities, etc. has fallen from 53% of disposable income in 1950 to 32% today.

That whole article ^ is desperately in need of reading, it seems. Here's another excerpt designed to make some liberal heads explode:

A favorite progressive trope is that the middle class has stagnated economically since the 1970s. This trope is wrong.

 

[malkusm]

Capital increases the productivity of the labor that uses it and is added until the diminishing marginal product becomes less than the cost of that capital. The labor must have the skills to operate it, however. And herein lies our national problem. We have an increasingly poor segment that cannot effectively use the ever evolving and improving capital.

I completely agree. I was alluding to the fact that some of the productivity gains caused by capital must be reinvested into capital, since the value of capital depreciates overtime (systems must be maintained). Overhead also goes up - companies didn't have to worry about what their internet bill was in 1970. But yes, the labor productivity that can be achieved by using this new capital can only be obtained if labor is able to use it. Unfortunately from my experience, a lot of those qualified individuals are from overseas, these days.

Edited to add: Note, none of this changes what the value of a fry cook at McDonalds should be. I'm sure their equipment has been modernized, but their productivity is largely unaffected. So, the minimum wage is really a very bad proxy for labor productivity - the more reasonable question is, have average wages increased at the rate of productivity? Largely the answer is yes. The distribution of that wealth is growing more disparaged, for some legitimate reasons and other illegitimate. But none of this should lead a person to conclude that the minimum wage is the solution.

 

[Deborah K]

Go back and read my posts. None of them has said raising the minimum wage is the correct answer. All of them say that Warren is pointing to the EXACT undermining problems that we are. She uses minimum wage to illustrate the devaluation of our currency, Ron Paul used precious metals.

T

I wasn't trying to imply that you agreed with her. I was implying that it doesn't matter that she recognizes there is a discrepency between the cost of living and wages, because her solution is the wrong one - utterly.

 

[anaconda]

Note, none of this changes what the value of a fry cook at McDonalds should be. I'm sure their equipment has been modernized, but their productivity is largely unaffected.

You make an interesting point. I am going to guess that the average McDonald's restaurant is pumping out way more product per unit time than in the 1960's, and that the workers' productivity has exploded. If this is the case, it is likely due to capital improvements used directly by the minimum wage staff (better designs, drive-thoughs, wireless headsets, computerized point of sale, fryers that use less energy, etc.etc.). Yet (and you may have alluded to this) the prerequisite skill set may not have changed much, if at all. I suspect that a good minimum wage worker is capable of being quickly trained in the efficient use of this new capital, and the ease of use is probably a significant design issue. This would be a departure from capital that is enormously complicated to use.