| I'm going to pose this question more in the context of their analysis and without consideration to anything else. There have been a myriad of studies which try to link minimum wage to worker productivity and the default assumption is always that the worker should bear the fruit of all productivity gains. Why is this the case? Often, it is not the worker who was responsible for the capital investments that increased his/her productivity. A couple crude examples to illustrate my opposition to this notion:
- My employer pays me to create web applications. We agreed on a rate (could be 10 money units per hour OR 100 money units per application). My performance is assessed throughout my employment to see if my productivity is satisfactory for my rate. Maybe my employer refuses to invest in any tooling for me and I have to use vim to write all my code. If they then invest in an IntelliJ license for me (thanks employer!) and I am more productive, should I be paid more? Debatably, my job didn't get easier/harder. Now if I invest in the tooling myself, and am paid per application, I should get paid more; this often isn't the case. - In 1956 if my laundromat employer paid me to wash clothes, I was probably doing it by hand and maybe getting 3-5 pounds of clothes done per hour. My wage (likely minimum) would be $1/hr. In 2020, we have laundry machines that can do 20 pounds of clothes every 30 minutes. $1/hr (of 1956 money) would be roughly $10/hr in 2020. No one would suggest that we pay someone upwards of $100/hr to run a laundry machine (unless the worker was paid per pound of laundry done and personally made the investment in the machine). It likely wouldn't even be a job if the minimum wage was $24/hr today. It seems like these analysis of what the minimum wage should be should take into account that technology and capital investments have made a lot of jobs either lower skilled or less valuable. I'm not sure how to quantify the lack of job creation in sectors that would warrant $24/hr. Another option would be to pay workers directly for their output but this would have other consequences. Starbucks invests in making baristas efficient so they can handle the morning rush but pays them just the same for the afternoon lull. Caveat that I am pretty ignorant to this so I may be wrong but I do not believe a low floor is what is driving wages down. |
Wage aligns with replaceability - how easy is it to replace you? Professional athletes are hard to replace, doctors less so, cashiers even less.
Wages are driving down because, unless you get lucky, there’s not much to do. Big companies chop up specialized roles into a hundred “dumb” ones so people can be easily replaced.