What should jobs pay?

[dannno]

So if we lower wages- particularly the minimum wage, the standard of living will improve? Especially for those at the bottom (who are more likely to be minimum wage workers)? This is one of those conflicts I want to look at. The economy has been expanding low wage jobs the most (helping those at the bottom the most) since the recession started so we must be getting better off, yes? Increasing our standard of living?

(and thank you for returning to the topic!)

The minimum wage stifles economic production. The goal is to make the 'pie' as big as possible, then even the people with the smaller slices will have more.

 

[CaptUSA]

Zippy. Quit thinking about it collectively.

What should a job pay?

Well that depends how much value you are adding to it. You see, it is not the "job" that determines the value, it is the person doing the job. If you want a higher paying job, put more value into the job you have. You will be more valuable to the employer and he will have to pay more to keep you. I once had a minimum wage job scooping ice cream. Within weeks, they paid me more because I scooped the ice cream, cleaned the shop, engaged the customers, and was there when they needed me.

The very idea that the job determines your value is ridiculous.

 

[heavenlyboy34]

"What should jobs pay"? is an "ought" question. Economics does not deal with "oughts". As you know, there is no such thing as "objective value", so questions of wages have to be left to employers (or a central planner, depending on your worldview).

This question belongs in the philosophy forum, if you really want this discussion.

 

[Zippyjuan]

The minimum wage stifles economic production. The goal is to make the 'pie' as big as possible, then even the people with the smaller slices will have more.

The pie has gotten bigger- we produce more both per capita and in total volume than ever before. But the slice going to workers has gotten smaller. (see earlier post #19)

http://www.nytimes.com/2013/01/13/s...ductivity-climbs-but-wages-stagnate.html?_r=0

Wages have fallen to a record low as a share of America’s gross domestic product. Until 1975, wages nearly always accounted for more than 50 percent of the nation’s G.D.P., but last year wages fell to a record low of 43.5 percent. Since 2001, when the wage share was 49 percent, there has been a steep slide.

“We went almost a century where the labor share was pretty stable and we shared prosperity,” says Lawrence Katz, a labor economist at Harvard. “What we’re seeing now is very disquieting.” For the great bulk of workers, labor’s shrinking share is even worse than the statistics show, when one considers that a sizable — and growing — chunk of overall wages goes to the top 1 percent: senior corporate executives, Wall Street professionals, Hollywood stars, pop singers and professional athletes. The share of wages going to the top 1 percent climbed to 12.9 percent in 2010, from 7.3 percent in 1979.

Some economists say it is wrong to look at just wages because other aspects of employee compensation, notably health costs, have risen. But overall employee compensation — including health and retirement benefits — has also slipped badly, falling to its lowest share of national income in more than 50 years while corporate profits have climbed to their highest share over that time.

From 1973 to 2011, worker productivity grew 80 percent, while median hourly compensation, after inflation, grew by just one-eighth that amount, according to the Economic Policy Institute, a liberal research group. And since 2000, productivity has risen 23 percent while real hourly pay has essentially stagnated.

 

[acptulsa]

Oh, so the new Zippy 2.0 is a negrepper?

First time I ever saw anyone on this account advocate deflation...

The pie has gotten bigger- we produce more both per capita and in total volume than ever before. But the slice going to workers has gotten smaller. (see earlier post #19)

Well, yes, Z2.0--that tends to happen when you use funny money. Employees will get upset if the numerical amount of pay they get is cut. But they hate to go ask for a raise every single time the Fed devalues the dollar a little more.

Zippy 1.0 had a handle on this simple fact...

 

[PRB]

Just some thoughts I came up with while replying to another post in this section. Decided to have a discussion separate from it.

I hear conflicting ideas about jobs.

Some from libertarians, some from liberals/protectionists.

First, that we don't want a minimum wage. That will lower labor costs for employers and mean lower priced goods. Companies will be able to hire more workers. "Living wages" is a bad idea.

Living wage is not a bad idea, lower wages is not a good idea. Mandating wages without regard to supply and demand and market determined value is a bad idea, it stops the poor and weak from being exploited, which hurts businessmen, and ultimately hurts consumers.

On the other hand, we need more well-paying jobs so people can "make a living". Living wages are good. High wage jobs tend to be union jobs or government jobs but we don't want unions or government workers- they are bad.

Ok, this is a conflicting statement. A person can't want high wage jobs, but then complain he doesn't like a certain job. Such a statement essentially says "I want an easy job but I want high wages". It's true that high wage jobs tend to be either high demand, or union, or government, and we can see what's bad about them.

Unemployment is too high- people have given up on looking for work.

Only because the government still feed them. I bet if the government stopped handing out food stamps and unemployment, more people would beg for low paying jobs.

Well, some have given up because they are unable to find a job which pays the income level they were accustomed to. If you worked for the same company for ten or 20 years, you earned seniority and higher pay and benefits. If you can find a similar job in the same industry, they are going to start you out at entry level pay- not senior pay. "Well, I got $xxx at my old job- no way am I taking this one."

too bad, nobody owes them anything, they can take their entitlement mentality to somewhere else where somebody is willing to pay more. employers will gladly hire the cheapest person if all else equal. if you want higher pay, you need to justify it to your employer.

Nobody is forced to work, nobody is forced to live, so if you want something, you better be willing to work for it. Nobody is owed anything in this country but the right to quit.

Jobs HAVE been getting created- we now have more jobs than we did in 2007- granted still not enough but things have been improving on that front.

"Enough" is totally subjective. Jobs being created while jobs being destroyed, people who had jobs selling mortgages now are likely to be selling solar panels.

"But they don't pay enough".

I'm just preaching to the choir here, if you're replaceable, you're paid fairly, that's "enough" according to the market. You only need to pay enough that you're not going to quit and we can't find another person, otherwise, quit, somebody else will take your place and STFU.

"But we need more low wage jobs so employers can hire more people and more people can find work".

Well, that'd be nice for the employers, but we don't "need" it. Lower wages is no guarantee that more people will be hired, employers will save money every way they can.

But people aren't as willing to take a lower paying job so they instead drop out of the labor market. Things contradict each other.

Nobody is forced to take any job, if they can feed themselves, they're free to sit on their asses. People today only stopped looking for work because either they don't find the need for it thanks to assistance, or they changed their spending habits, in either way, they don't see the need and nobody is forcing them to work, not even debt can force you to work.

We want low paying jobs for people making the things we buy so we can get them cheaply but we don't want lower paying jobs for ourselves.

Correct, i want people to be hard workers, but I don't want to be a hard worker myself. I want to be rich, but I don't want other people to be rich. It's called liberty, I am a selfish asshole who only cares about myself. You nailed it, I only want high wages because I WANT TO BE PAID MORE, I would not want anybody to be well paid but myself. I want cheap goods, but I don't want other people to buy things cheap UNLESS it means they'll save money and spend it on me. I think in terms of ME ME ME because that's what being a libertarian is all about ME ME ME, not society, not other people. I can't possibly be a libertarian if I stopped and think about others, that would be socialist, i need to be a heartless sociopath to be a consistent selfish libertarian.

Hence the conflict. Getting rid of the minimum wage is fine if we aren't in a minimum wage position. If you ARE in a minimum wage job, you would definately like an increase in minimum wage.

Yeah, and I want to be Superman too. I just don't want other people to be Superman.

 

[dannno]

The pie has gotten bigger- we produce more both per capita and in total volume than ever before. But the slice going to workers has gotten smaller. (see earlier post #19)

Has it? Do they have iphones and flatscreens?

 

[Tod]

Is there some reason jobs should not pay whatever the employer and the employee agree upon? I can't think of any reason.

 

[acptulsa]

Meanwhile, for newbies like Z2.0 who haven't seen this discussed a dozen zillion times already...

I think what the newcomer to this discussion has the most trouble understanding is the dollar is not a dollar--it's a nickel.

What do I mean? Well, my old man got out of the Army Air Corps after WWII and got himself a good job paying a dollar an hour. How is that a good job? Easy--it was 1946 and the dollar was still a dollar. As in, when he wanted a Pepsi he paid a nickel for it--now it costs a dollar. When he wanted to ride a bus, he put seven cents in the meter, or a nickel and a half--now it costs a buck and a half. When he wanted to sit down and have a cup of regular old coffee, he paid a dime, or two nickels--now it costs two bucks. When he put gas in the car (it was always cheap in Oklahoma), he paid 14.9 cents per gallon, or three nickles--now it costs three bucks. When he was hungry for lunch, he bought a deluxe double hamburger with all the trimmings for a silver quarter, or five nickles--now it costs five bucks. When he wanted to go to a movie, he paid thirty-five cents or seven nickles--now it costs seven bucks. And when he shopped for a new top of the line Dodge Custom with heater and radio and other options, it would set him back two grand, or forty thousand nickles--now it costs forty thousand dollars.

The Pepsi isn't any wetter, the gas doesn't burn any brighter, the double burger isn't any more filling, and the movie doesn't last any longer today (with no newsreel, serial and cartoon, it actually doesn't last as long). So, there's only one explanation. The dollar is no longer worth a dollar. The dollar is worth a nickel. Period.

Why do you think all the five and ten cent stores have been replaced with dollar stores?

 

[heavenlyboy34]

Is there some reason jobs should not pay whatever the employer and the employee agree upon? I can't think of any reason.

None whatsoever.

 

[VIDEODROME]

Is there some reason jobs should not pay whatever the employer and the employee agree upon? I can't think of any reason.

What bargaining power does anyone have if you're one applicant out of hundreds that applied to flip burgers? You try to bargain and you will be laughed at and dismissed.

 

[kcchiefs6465]

What bargaining power does anyone have if you're one applicant out of hundreds that applied to flip burgers? You try to bargain and you will be laughed at and dismissed.

I wonder what the start up cost for a burger operation is.

 

[acptulsa]

I wonder what the start up cost for a burger operation is.

These days?

Doesn't matter if you're a startup or McDonald's--everyone needs seven lawyers and nine CPAs to do business in the U.S. today.

That's what the bureaucrats call a 'level playing field' don'tcha know...

 

[Zippyjuan]

Has it? Do they have iphones and flatscreens?

All levels of society today have more than people at the same level did 50 years ago. Nobody had iPhones or flatscreens back then. (the iPhone which is common today has only been around for about ten years). But wealth of those at the top has grown exponentially faster than those at lower levels. They have taken most of the gains from higher worker productivity.

 

[VIDEODROME]

Isn't the Iphone up to version 5? So what if people have the Iphone4 that some Apple fan threw out?

There is actually a lot of really good second hand technology being discarded today every time people upgrade.

 

[Zippyjuan]

So do we want more jobs? It seems we probably do. "Labor force participation is at a modern low- Lowest Level Since Carter". What if we had more jobs but lower wages for those new jobs (the situation we seem to be in now)? What if those new jobs don't pay enough to give people who have chosen not to work an incentive to take them and get paid a little instead of getting paid nothing?

"We need more higher paying jobs". Are we willing to pay higher prices for goods to get and keep them? (no, we aren't).

Should we care about people who choose not to work- those who have left the workforce?

 

[CaptUSA]

"We need more higher paying jobs". Are we willing to pay higher prices for goods to get and keep them? (no, we aren't).

This is straight up BS. Higher-paying jobs don't make the price of the product go up if the person who is receiving that higher pay is really earning it.

If an employer has to raise his price to cover the value that the employee is providing, then the employee is not providing enough value in return. If the employee was really earning more money, then the employer may even be able to lower his prices.

You are talking about artificially raising people's pay without them raising their value. You just don't get it.


ETA:

Central planning arrogance at its worst. You think you can dictate the value judgments of each individual better than they can. You must be a god, Zippy, to have all that knowledge about which employee is providing which value to their employer.

 

[Brian4Liberty]

Is there some reason jobs should not pay whatever the employer and the employee agree upon? I can't think of any reason.

That's pretty much the answer. Pay is based upon what is negotiated.

Talk of minimum wage and working wages is socialist utopian idealism. It's collectivism. No one is an individual. All must be exactly the same.

What bargaining power does anyone have if you're one applicant out of hundreds that applied to flip burgers? You try to bargain and you will be laughed at and dismissed.

Exactly. Now we get into factors that go into negotiations. Supply and demand is a big factor, possibly the biggest.

But then we have other factors in negotiating:

- Poor folks (or not so poor anymore) have Big Mommy government making a competing counter-offer. Welfare, child support, EBT, food stamps and whole host of other benefits for free. Employers have to compete with that.
- We can't forget that our standard measure is fiat currency. Monetary inflation reduces the value of wages paid over time. Either you renegotiate, or your wages fall.
- Underground economy: when negotiations are stifled by government interference (such as the minimum wage), the underground economy grows, where negotiations will function without government interference.

 

[Brian4Liberty]

Just some thoughts I came up with while replying to another post in this section. Decided to have a discussion separate from it.

I hear conflicting ideas about jobs.
...
Comments?

I hear conflicting ideas too. Why do those who are activists for minimum wage also activists for increased immigration? Those are directly contradictory positions. Increase the labor pool, and wages decrease.

 

[VIDEODROME]

- We can't forget that our standard measure is fiat currency. Monetary inflation reduces the value of wages paid over time. Either you renegotiate, or your wages fall.

I sometimes wonder if the lower classes get hit by inflation harder. Or is the end result that their wages are stagnant so that the Executive do actually have income that keeps pace with inflation? Is that why Executive compensation often seems so outrageous? Maybe that's because inflation is so outrageous and they just happen to be at the top where they can insulate themselves.

Also, if "New Money" comes into the system, do the very wealthy get it first?