[youessayyyaway]

I think this article might bury the lede a bit:

>Walmart is offering some workers with past warehouse experience as much as $25 an hour. An Amazon executive told Reuters in late 2021 that the company was bumping the average starting wage for new hires in the US to more than $18 an hour, attributing the decision to intense competition among employers.

People used to work for Amazon warehouses in the 2010s because $15/hr was a much better wage than they could find elsewhere in their geographic location.

After the pandemic and ongoing inflation, it's not difficult to find easier work which pays better. Amazon responded with a token raise that doesn't even cover CoL adjustments, but history shows that they need to pay well above market rates to hire the quantity of people that they need.

It's funny to see this dynamic at a time when the federal minimum wage is still stuck at $7.25/hr.

[FFRefresh]

>Walmart is offering some workers with past warehouse experience as much as $25 an hour. An Amazon executive told Reuters in late 2021 that the company was bumping the average starting wage for new hires in the US to more than $18 an hour, attributing the decision to intense competition among employers.

This is a common type of formulation in journalism that often reveals the bias of the journalist.

1. Walmart pays SOME workers with PAST experience UP TO $25/hr

2. Amazon's average STARTING pay for NEW hires is $18/hr

Whatever one's opinion on Amazon, when you see the two statements next to each other, it's very obvious that this isn't an apples-to-apples comparison. Whatever the future of journalism/information-sharing, I hope we leave tactics like this behind, as it does not lead to improved shared understanding.

[swatcoder]

I upvoted this for contributing a valuable and insightful clarification about how those two statements relate, but the part where you attribute "tactics" and "bias" to the journalist has no direct evidence and reads like a political meme.

You may be convinced of your interpretation, but it's also likely that the journalist isn't rigorous enough to notice the distinction themselves, didn't have access to perfectly comparable figures, or had a deadline to meet and cut corners because they needed to pick up their kid from school.

Never attribute to malice that which blah blah blah...

[FFRefresh]

Totally fair on the implying bias strictly on the journalist (which may or may not be there).

Regardless of the awareness/intent of the given journalist, I do hope that we can find leaders (whether people/orgs/software) that can help improve our information environment to improve shared sensemaking.

In an ideal world, non-rigorous journalists, arbitrary deadlines, and corner cutting because of school pickups shouldn't impact the clarity of information being shared. That's the world of today, and it leads to a very muddied/confused information environment, but I don't believe it's the only possibility for us.

[bsuvc]

> Totally fair on the implying bias strictly on the journalist (which may or may not be there).

But it's not.

You were correct to call out their bias and tactics, as journalists have written hit pieces on various companies in the past and have earned scrutiny over how they present data.

I don't feel like you should need to backpedal on your astute observation just because someone points out a bs excuse scenario like they might have kids to pick up from school.

It is literally a journalist's job to gather and present accurate data, hopefully without bias. I don't think it is too much to ask of them, no matter the circumstances.

[avgcorrection]

You went from a providing an astute observation in the first comment to providing vague platitutes about leaders (waves hands) in the next one. Way to go.

The deadlines of those poor journalists—and their kids!—is hardly the main problem with the Media. But you probably already know that.

[FFRefresh]

The content of my comments is highly context-dependent. The poster who replied that it may not be the journalist's bias which led to the formulation, was right. It may or may not be due to bias. I'm willing to cede that I do not know this journalist personally, to be able to confidently say it was due to bias. I would personally bet that there's some degree of anti-Amazon/anti-big tech bias somewhere in the chain that led to the production of this article, but it's something that's hard to know for sure. I can only observe broad trends that usually show these types of formulations always leaning in one direction. This broad 'bias' is a major reason the media has lost so much trust.

Formulation: MAX(Group A) > MIN(Group B) . I often notice that some types of groups/entities always find themselves having the MIN function applied to their case, and others always have the MAX function applied to theirs.

You are also right that deadlines/school pickups aren't the main problem with media. I don't believe that to be true, I was just using that as an example because the poster I was replying to did. When we think about what a better version of the media could look like, those shouldn't be excuses.

[jimmydorry]

You're right in pointing this out. If it's not obvious that there is bias involved in the article, then criticism of it should include the other option of the journalist simply being incompetenct.

[koofdoof]

I think you're correct that the statement isnt necessarily indicative of the writer having a specific bias. However misleading yet provocative comparisons like that are actively incentivized by the structure of journalism at the moment. Writing like that takes less effort and research yet it gets more views and shares. So perhaps its not malice or agenda pushing, but the writer also understands that being misleading is directly profitable. Why would they bother doing the work to make a more accurate or nuanced comparison if will hinder their own interests.

[avgcorrection]

What an incredibly myopic viewpoint.

That little “rule” sounds so smart, huh? That people are just dumb and there is no pattern to anything. It’s all random and people are just fumbling about, doing “stupid” or “random” shit. Their mind is distracted because they need to pick up their child froms school.

But it’s not even about malice or intent. It’s about patterns and analysis of how the media operates. You observe if things are slanted in a certain way. If they give one side the benefit of the doubt while the other not so much.

It’s not about finding evidence of the inner workings/mind of some run of the mill journalist. It’s about seeing what kind of output certain outlets put out. On aggregate.

This has been done before. It can be done.

And how do you disregard such good work? By half-quoting—it’s so cliche that you won’t lower yourself to finish the pseudo-quote—some smarter-than-thou, above the fray nonsense which fundamentally confuses individual intent (i.e. “conspiracy”) with aggregate analysis, all because you got hung up on the particular-sounding “bias of the journalist”, which could originally have been meant to be illustrative[1] and could have been taken as such in a charitable reading, especially since it’s not like any of us even remember the byline of this article.

[1] Although note that the original poster totally folded in a sibling comment, so whatever…

[labcomputer]

> Never attribute to malice that which blah blah blah...

I think we need to hold journalists to higher standard than "complete idiot".

I've noticed the same pattern, and I can't believe it's not intentional.

[zaptheimpaler]

You may be right that the journalist didn't notice the distinction. But at this point 10-15 years into the age of data, I'd think that's one of the most basic requirements for their job.

Maybe the blame should fall more on Vox and their work environment rather than the journalist, but we do have to draw a line somewhere on the basic standards for journalism. We don't excuse a bridge falling down or a web service failing because the engineers had to pick up their kids from school..

[Siira]

I believe in the opposite; systematic incompetence is no different from malice, and this is usually well understood by the people who have influence over the system.

[snowwrestler]

The journalist did their job by offering these statements with all the qualifiers that you used to make your comparison.

Journalists have to work with the information they get; they can’t force two employers to give them perfectly comparable figures. Their job is to accurately report the info they do get.

[FFRefresh]

There are plenty of websites where employees share their wages/salaries, which enable direct comparisons between companies. A simple google search reveals such data. Also, for a lot of these jobs, the companies post the pay ranges on the actual job description.

These wages aren't some super secret data point. Referencing a 2021 Reuters article as the source for Amazon wage data is an interesting choice, when you can find better comparable data by spending 5 minutes on Google.

[simonw]

When you're working as a professional journalist, a "simple google search" isn't enough: how can you be sure that the information you are seeing on those kinds of wage comparison websites is accurate, and comes from people who genuinely worked at those companies?

[FFRefresh]

Yours is a broad epistemic question. How can you be sure of anything? How can you be sure what the Amazon exec stated in a Reuters article last year is accurate?

We're dealing with uncertainty in all regards. My position is that it's best to be transparent with our uncertainty.

If the article had said "We didn't have good wage data to directly compare Walmart & Amazon warehouse compensation against each other", I would have loved it, because it'd show transparency/honesty/authenticity. Or if they did an analysis using data from job postings or wage sites and were very transparent on their methodology and admitted what you stated "These figures were taken from job postings on X.com, which can often have ranges. Consider there to be some degree of imprecision."

I totally get that it's not a norm in the media today to do that, and there are a lot of structural incentives that create that situation. I can empathize with each actor/individual within the broader system, and that they're doing their best within the world they live in.

[simonw]

"How can you be sure what the Amazon exec stated in a Reuters article last year is accurate?"

You can't. That's why the article says "An Amazon executive told Reuters in late 2021 that the company was bumping the average starting wage for new hires in the US to more than $18 an hour" - rather than stating as fact that "in 2021 the company bumped the average starting wage...".

[tomnipotent]

> it's best to be transparent with our uncertainty

Why is it best? I'm not interested in reading a bunch of gibberish disclaimer that I already know, and that all readers should know when consuming media. People can be wrong, facts are not black and white, and truth is a spectrum. It's not the job of a journalist on a deadline to spoon feed you critical thinking.

[frakkingcylons]

The point still stands: other employers are offering competitive wages for similar roles and are forcing Amazon to react. Otherwise Amazon wouldn’t be struggling to hire warehouse workers.

[FFRefresh]

Totally, but why do a MAX(Walmart) > MIN(Amazon) comparison to bolster that point at all? Why not exclude the comparison, since it doesn't really communicate what the actual wage options are for prospective new warehouse workers or experienced workers.

[unityByFreedom]

I read it the same way and completely agree with you. Grammar and the context in which statements are presented can be biased too.

I don't know whether they teach that in journalism school. My guess is that they do, and that this type of bias only leaks out now due to the overwhelming amount of citizen journalism that social media allows.

I think the other replies to you who won't consider this possibility are influenced by trying to take down Amazon, which in my opinion they will do to themselves if it is warranted. No media push is necessary.

We still haven't found our way back to trusted sources. Some day, we will.

[CPLX]

Well yeah, but that's a very very direct explanation of why people might LEAVE Amazon to go work at Wal Mart, since they fit into that category of some workers with past experience.

Turnover is the subject of the story, those two statements seem directly relevant.

[whiddershins]

I don't think that formulation is misleading, it is GP who put an interpretation on it that was critical of Amazon.

[barry-cotter]

> Whatever the future of journalism/information-sharing, I hope we leave tactics like this behind, as it does not lead to improved shared understanding.

Shared understanding is not and never has been the goal of journalism, possibly excluding the business press. Stories are more interesting with heroes and villains so journalists create them if necessary.

[chrisseaton]

> it's very obvious that this isn't an apples-to-apples comparison

Isn’t that a good thing? What’s your complaint?

[blagie]

Amazon does a lot to optimize employee productivity. This has two corollaries:

1) Working for Amazon is no fun. For the same income, employees would prefer an employer where they have more time to relax and have less extreme workloads. If Amazon paid the same wage as a lazy cafe by the beach, guess where workers would prefer to go?

2) Worker productivity is higher, so Amazon can afford to pay more while being competitive with other businesses.

This is a pure economic point. I am not trying to make a veiled moral argument (although I understand how many such arguments could be read into what I wrote).

[bsedlm]

It also has the consequence that from the perspective of the employee getting optimized, what Amazon is doing is exploiting them more, faster, better, and for less effort on Amazon's side.

Let's not forget that each of us the people are more similar to the employee than we're to Amazon. Though I suppose a lot of people who never have had to be an employee anywhere (e.g. due to being born into enough wealth) wouldn't see this as clearly as a more typical person; compound this into the fact that most law makers (specially senators) are from very wealthy backgrounds already...

[abakker]

Is paid labor, (historically) above market rate, entered into voluntarily, necessarily exploitative because it includes productivity measures?

look, I don't want to work for Amazon, but, I don't think it is exploitation to expect productivity concomitant with wage. I think Amazon has offered poor working conditions.

All that said, the market will solve this. I've been told recently by a company providing outsourced help desk services that they were struggling to compete for talent because target was paying more than they were. I told them that they were not paying enough. they responded that their clients wouldn't agree to price increases in the service...The answer is that either you will get underqualified people, declining service quality, or you will pay more.

[cupofpython]

If a universal basic income existed, I would agree with you. Since it doesn't, this employment model is exploitative. There is a limited amount of paid work to go around. Being able to avoid being one of the people who draws the short stick is inconsequential to the problem.

People like to say, "if you do X like me, youll get ahead or be your own boss or ___". It may be true for some people, but it comes almost directly at the cost of putting someone else in the bad place you were trying to get out of. So with respect to trying to improve the overall system, shuffling people around isnt going to help.

[Beldin]

> "if you do X like me,

Secondly, that very strongly suggests survivor bias. You almost never hear about all the people who did X and didn't make it. And the one time you do, those were unlucky, or didn't really do X (true scottsman fallacy).

[mbesto]

> the market will solve this.

I generally agree with this and if the leaked memo is true, then the market is basically solving this now.

In essence, let's say the pool of applicants for warehouse jobs is 1,000,000 million people. Amazon needs 250k of them to operate their biz and the average retention is 1 year. In 4 years, the people who left previously are now looking for jobs and the only option is Amazon. If a warehouse job conditions are that poor, then they will collectively argue for higher pay.

Said another way - Amazon's presumably poor work conditions eventually catches up with them and the market will respond.

If all of this is true, then the underlying issue is the more controversial one (and moral one), which is that the mental/physical damage to workers mind/bodies can't be repossessed.

[ruined]

i mean, if Amazon is getting more out of the worker than it costs to keep them around, that's by definition exploitation. it's silly to avoid the word, it's purely material.

how you feel about it is up to you, but the more it sucks for the worker the less they'll like it.

it's important that for most people, "voluntary" in this situation involves the threat of fairly immediate homelessness, hunger, and family separation.

maybe the market will solve this, but i think the market might have a larger appetite for hellish consequences than many of us would like, and we all have to live with them.

[SR2Z]

It's not, and the entire reason why markets exist is because two people can walk away from a trade better-off than they were before.

It's exploitation if Amazon is tricking workers into working for less than their time is worth, or if Amazon is breaking labor laws.

"Voluntary" means that out of the incredible number of open job postings these days, workers picked Amazon's. Acting like the alternative to Amazon is homelessness and hunger is hilariously wrong.

[ruined]

sure. if the relationship was 100% downside it would be hard to convince anyone to do it. everyone understands this. of course there is an element of choice.

but you are underestimating how immediate and real the threat of homelessness appears to the class of people who work warehouse jobs.

>It's exploitation if Amazon is tricking workers into working for less than their time is worth, or if Amazon is breaking labor laws.

these are both literally happening.

if Amazon wasn't getting more utility and value out of their resources than they spent, Amazon would not be profitable. it is okay to call that exploitation. it doesn't require tricking anyone.

as for labor laws, that's still under litigation, but the NLRB agrees.

[prewett]

> if Amazon is getting more out of the worker than it costs to keep them around

That's a pretty simplistic argument. For one thing, it assumes a zero-sum game. But in economic theory both sides need to gain something in order for a transaction to occur. Walmart is not exploiting its customers just because it gets more from the customer than it cost (i.e. profit). Both sides are benefiting: the customer gets thousands of products in one location at pretty much the lowest possible price. Likewise, Target is not exploiting its customers just because it has higher prices than Walmart; customers get thousands of products in one location with somewhat higher quality than Walmart and a good deal better style. Target has a fairly loyal following, in fact, indicating that customers derive value from Target, even though Target is turning a profit; they could always go to Walmart if they were unhappy.

My employer is (hopefully) getting more value from me than they are paying for. I do not see it as exploitative at all: I could be in business for myself, but I already tried it and I discovered I did not want to bother with a lot of the business stuff, and people were not interested in paying for my product. So I switched the (internally perceived) product I am selling: now I am selling my software engineering services. In return I get some money. I'm a lot happier now than when I felt like I was an employee.

The problem is not that Amazon is getting more perceived value from the worker than the perceived value that they are paying the worker. The problem is that Amazon is abusive; people work for them either because they pay enough to make up for the abuse (at least the initial perception), or the worker does not feel like they have other options. The latter is not a problem of companies making a "profit" on workers, though; that is required for any employment to take place. It is a problem, but it is a different problem.

[jholman]

> that's by definition exploitation

I think you're just factually wrong about this particular part. If I understand you correctly, you're claiming that the definition of "exploit" is "derive net profit from", but I've never seen any definition like that. Generally, I think there are two definitions:

1) use / utilize

2) use unfairly

The first is typical when describing resource exploitation. The second is typical when describing relationships between humans. In neither case does net profit come into it.

That's both my personal understanding of the word (but who cares what I think), and also what I see in three different online dictionaries that I just checked. So I ask you: where are you getting your definition from?

[andi999]

Then every non bancrupt company would be exploiting the staff. The definition is no good.

[ruined]

true. why does that make it a bad definition? it is a material relationship, it is okay to call it accurately.

[anotheracctfo]

Or you could band together and collectively withhold your labour. These are solved problems, its how the impoverished and exploited ended the gilded age.

Individualization is heavily pushed because capitalism requires fungible labour. But if you band together then capitalism breaks down, because pure ideology runs into the brick wall of reality.

[politician]

The employer is able continuously improve and iterate on their productivity systems, but the employee, broadly speaking, only has one opportunity to negotiate their compensation at the outset of the engagement.

This is problematic for employers like Amazon that ruthlessly optimize their workforce, and, is why structures like unions emerge to allow employees to push back.

[int_19h]

> Is paid labor, (historically) above market rate, entered into voluntarily, necessarily exploitative because it includes productivity measures?

No. It's exploitative because of the power imbalance between employers and employees - and market competition means that companies that don't exploit as much as they can lose to those that do.

Thus, the two obvious solutions are to get rid of the market, or to get rid of the power imbalance. The first one has a lot of undesirable side effects, though, so why don't we try the second?

[blagie]

I intentionally did not provide a moral argument, primarily because I did not think I could do it justice. I've never worked in an Amazon warehouse, and while I have strong opinions, those are better unvoiced to leave air space for people who have worked there, and therefore have better-informed opinions.

I can make academic statements like this one: From the perspective of capitalist ideology, income in an efficient, frictionless market would be proportional to contribution. If Amazon can drive a worker to move twice as many boxes, they ought to be paid double. However, I've never seen a perfectly frictionless, efficient market.

I don't believe there is a "typical" employee whose perspective I could take either -- a lot of this is incredibly context-dependent. Most of us see the world around us, and tend to underestimate the difference to which situations differ, both in other regions, and on the individual. More money=better is obvious, but whether:

- Minimum wage labor sitting in a Domino's idle most of the time; or

- Double minimum wage labor doing back-breaking hard labor

depends on financial needs, age, health, and a whole slew of other things.

[jppittma]

Seems to be what Larry and Sergey called penny wise and pound foolish. A few points in favor of the "lazy cafe."

1. Free food costs the company less to provide in bulk than it does for individual employees to acquire on the open market. The benefit to the employee is higher than the cost to the employer. The employee values this perk in their comp package against what it would cost him to acquire it if it weren't provided.

2. The marginal value of an employee's time is nonlinear and asymmetric. My weekly hours 0-40 are less valuable to me than hours 120-160, and the inverse is true for the company - my weekly hours 0-40 are more valuable to them than hours 120-160. The lazy cafe is again getting more value for its money than the sweat shop.

3. Hiring two people to work 40 hours/week instead of 1 person to work 80 reduces the labor supply for your competitors.

4. Hiring people so you can extract as much value as possible for them gets your a bad reputation and a company full for rubes.

[ComputerGuru]

> If Amazon paid the same wage as a lazy cafe by the beach, guess where workers would prefer to go?

You can really close to really identifying the issue but there’s more to build off of this point. Amazon does offer a (somewhat) comparable wage to “a lazy cafe job at the beach” but the catch is that Amazon has a warehouse or two in every major metro area, and each of those requires thousands of full-time employees while there are only handful of beach-side jobs to be had.

Previously, that meant that Amazon didn’t have to raise wages (much) beyond that (poor) benchmark because people need jobs and after all the easy, low-paying ones are taken then the hard, low-paying ones get filled. But with everyone hiring nonstop, everyone paying comparable-enough salaries, that’s not going to cut it, especially when you purposely don’t make employee retention a goal and treat all two-armed human beings as being fungible.

The only bad news is that the layoffs are coming and this historically-low unemployment we’re seeing is coming to an end, meaning Amazon may still get get their way.

[blagie]

I don't think that's fair. I just went to a random pizza joint. There were two teenagers hanging around behind shooting the breeze. They were polite, fast, and professional when a customer would draft in, but for the most part, it looked like a pretty chill job. I can almost guarantee they were making minimum wage. There are plenty of jobs like that everywhere. There aren't many jobs like that much above minimum wage, or anywhere close to Amazon's wage.

If I were a teenager, I'd take that job over Amazon's nightmarish warehouses.

That calculus changes with rent and family. 30k per year is probably the minimum needed to raise a family for a homeowner in a lower cost-of-living part of the country, which translates to around $15/hour. Someone with rent / mortgage needs a bit more.

[stevenwoo]

Homeowner seems optimistic - how or when are they saving for the downpayment?

30K per year is about poverty level in most of the United States for a family of four. https://www.census.gov/library/publications/2021/demo/p60-27...

But if both parents work at 15/hour, they could rent, though childcare would take a big bite out of their budget even at 60K per year.

Most places with lower cost of living in the USA have jobs closer to federal minimum wage work rather than 15/hour as well.

https://www.cnbc.com/2019/05/16/how-much-money-a-family-of-4...

[blagie]

> Homeowner seems optimistic - how or when are they saving for the downpayment?

In most cases, the scenario described involves families who have been in the US for several generations, who are poorly-educated, but own homes and land. One parent takes care of kids. One works.

It's not uncommon.

Wealth and income aren't as strongly correlated as people assume. A lot of immigrants are low-wealth, high-income, while a lot of American families have generational wealth, but little income. There are plenty of families with >$1M homes with $30k incomes where I live. And there are plenty of families with >$100k incomes, who can't afford to buy homes here too.

[president]

Solution to #1 is bringing in workers that care more about $ than lifestyle. Same situation in the tech industry.

[cameroncf]

> I think this article might bury the lede a bit:

When you read that quote carefully it doesn't say that Amazon employees get paid less. It's saying MAX pay at Walmart is $25/hr and MIN pay at Amazon is $18 an hour.

Apples and oranges. Meaningless clickbait.

[drewcoo]

> this article might bury the lede

That's the whole point of the "leaked" information articles. Getting media outlets to publish whatever insiders told them, ideally verbatim.

[burlesona]

There's a big regional disparity problem with the FEDERAL minimum wage. There's no dollar amount you can pick that is both fair in high COL areas like SF, Seattle, New York (median home price over a million), and also feasible in low COL areas like rural Ohio or Mississippi (median home price around 100k).

If you want a fun thought experiment, what if minimum wage was tied to local cost of housing? In the Bay Area you might need minimum wage >= $50/hour to offset the prices caused by gross artificial housing scarcity. That would force a lot of businesses to close, and would push jobs out of to lower COL areas where the jobs are sorely needed. It would also punish the NIMBYs by taking away their dog walkers and hamburger joints, which might finally change the politics to actually permit affordable housing to be built.

[brightball]

I guess Walmart decided to become a better employer.

[efitz]

> It's funny to see this dynamic at a time when the federal minimum wage is still stuck at $7.25/hr.

Why? It just sounds to me that the federal minimum is age isn’t needed; employers will set the wages necessary to attract the employees that they need and are willing to pay for.

[glmdev]

It's not needed right _now_, perhaps, but wait a few months or a few years. Next time the job market shifts back to the employers, the incentives will align the other way.

[SoftTalker]

Shows that a true minimum wage is not something the government can mandate. There is a natural minimum wage that the market determines. It depends on (at least) the nature of the work and the supply of potential employees. For warehouse work, it's apparently over 2x what the government says it should be.

[kzrdude]

The purpose of minimum wage is a floor, not that someone has to make that level. If everyone makes more, good.

[esaym]

>The purpose of minimum wage is a floor,

It goes deeper than that. There was a documentary that leaked a new Walmart employee going through their initial first day orientation. If you were a new hire and were married and/or had children, you got extra "orientation" on all the government benefits you now qualified for (welfare, food stamps, medicaid, etc) since you were now considered below the USA poverty line.

I am fine with letting the market regulate itself, but it is not ok that a company can pay employees low because the government will pick up the other half. That is not "self regulation".

[cbsmith]

If you're earning less than $130,000 a year, you are eligible for an FSA, which the HR team will discuss during almost any company's new-hire orientation...

There are lots of government benefits that are restricted to people below a certain income. That doesn't mean that it is unconscionable to pay people at that income level or to educate employees on what they are eligible for so that they can take advantage of it.

[sgift]

> That doesn't mean that it is unconscionable to pay people at that income level

If that income level is the poverty line: Yes, it is.

[cbsmith]

So then your problem is with the income level, not educating people about benefits they are eligible for.

[ghaff]

>If you're earning less than $130,000 a year, you are eligible for an FSA

Assuming you mean a flexible spending account (for healthcare out of pocket), you're certainly not capped at $130K/year in the US. Your broader point is of course true.

[cbsmith]

If you are single, the limit is 130,000/yr. After that you can have an HSA, but FSA.

[Scoundreller]

It makes sense, kinda. When your public and private social programs are numerous and disconnected, getting a job can mean losing a lot of benefits while qualifying for others.

e.g. my employer had a session about their benefits package: If I was on welfare, this would be a change in how everything works. It would have been nice if they had a session on our national pension scheme since I was now obligated to start paying into that.

[mbostleman]

>>but it is not ok that a company can pay employees low because the government will pick up the other half>>

I don't think this is a situation that applies to the idea of self-regulation. In this case, a distortion of the market is first created by the government subsidy. So the natural behavior of a business would be to leverage it. Just as the natural behavior of the IRS is to go after things like your company's paying for your cell phone and calling it taxable income.

I would suggest that the idea of self-regulation is best applied where there are no market distortions from the government that have already warped the context.

[Aunche]

That's not how economics works. Walmart is paying their employees low despite welfare, not because of it. Without welfare, people would be more desperate for work and would be willing to work for lower wages.

[abfan1127]

would you prefer they not tell those people about the available benefits?

[mirker]

I think the point is Walmart is able to pay at a low enough rate that it must be effectively subsidized by the government. Walmart then plays into it as a further benefit “they” provide.

[zdragnar]

The government is setting the price floor for wages. If that price floor falls below the point at which the government will offer benefits to people, then it isn't Walmart that is being subsidized.

[PaulDavisThe1st]

I would prefer that nobody who works 40 hours a week (tops! I'd be happy if the number was less) earns less than the US poverty level for a family with 1 or 2 children (undecided over which). As a matter of law.

[scarface74]

I’m sure my 16 year old son would have loved that.

And everyone arguing that a company doesn’t deserve to exist if it can’t profitably pay more, is posting on a site funding money losing companies that couldn’t exist if they actually had to make a profit.

[mbostleman]

>>The purpose of minimum wage is a floor>> There's the purpose and then there's the outcome. I have always found it useful to also keep in mind the perspective on minimum wage that recognizes that from a practical perspective, it makes it illegal for workers that create a certain level of economic value to work. Of course that's not the perspective that a proponent of minimum wage would use to pitch it because that certainly is not the purpose. But it's hard to argue that this other perspective is not to some extent, the outcome in terms of economic mechanics.

[hadlock]

Minimum wage is important when you have more people wanting to work, than jobs. Right now 1 in 300 people just died, a bunch retired, and 3-5% of the remaining workforce is out with covid and/or post-covid syndrome. So right now there are more jobs than workers.

Given people's natural inclination towards reproduction, at some point in the future, there will once again be more people than jobs, and minimum wage will once again become a flashpoint as quality of life begins to shrink. That's not even accounting for inflationary effects on the bottom 75% of wage earners.

[FredPret]

As long as people are even mildly productive, economic growth will handily outpace population growth.

This has been going on for a very long time now, which is why we’re all so wildly rich compared to 100 years ago.

My grandparents remembered a time when completely emptying a jar of peanut butter was essential and lavatory paper was counted by the individual sheet. Today I have homeless people refusing my gifts of food.

[suture]

The natural minimum wage that the market determines (absent all regulations) is $0 per hour and is called slavery. Enlightened people have moved passed the idea that the “market” alone should determine the minimum wage.

[LambdaComplex]

Exactly. Ever heard of scrip[0]? We have historical proof that companies won't even pay their employees with real money unless the government mandates that they do so.

0. https://en.wikipedia.org/wiki/Scrip#Company_scrip

[thaumasiotes]

> We have historical proof that companies won't even pay their employees with real money unless the government mandates that they do so.

Well, we have historical proof that nearly all companies do pay with real money in the total absence of such government mandates. We definitely don't have proof of the proposition you claim, which is immediately falsified by the most cursory examination of history.

Note also that scrip is denominated in currency and accepted at par. The problem was generally not that you had a lot of scrip and couldn't spend it; the problem was that the company store charged high prices. But the store charged the same prices whether you were spending company scrip or currency.

[suture]

Someone will want to enslave people. This has been so for almost all of history for sufficiently large civilizations. In general humans exploit one another when they can get away with it. In the absence of government/societal regulations slavery will occur and thus the “market” minimum wage is 0.

Government regulations can be good and they can be bad. In enlightened countries enough good ones are in place to prevent a minimum wage of 0.

[thaumasiotes]

> In the absence of government/societal regulations slavery will occur

Slavery cannot occur in the absence of governmental and societal regulations, because in that case there's nothing stopping the slaves from leaving. Any such obstacle would be a governmental or societal regulation.

> and thus the “market” minimum wage is 0.

Slaves are paid much more than zero wages. In every culture, a slave in a good position is much better off economically than a freeman in a bad position.

[int_19h]

There are countries in Europe which do not have a minimum wage mandated by the law - rather, it's the unions that negotiate them - and they still end up with more than people get in US. I guess you could term such negotiations "regulation", but it'd be really stretching it.

Regulating a broken system is an exercise in futility. We need a system in which the feedback loops produce the desired outcomes in the first place.

[suture]

I’m pretty sure slavery is outlawed in all European countries so that alone prevents a 0 minimum wage. That itself is a regulation. There are lots of “regulations” (government interventions) that prevent a zero minimum wage. Indeed the legal protections and regulations regarding unions, social programs for the unemployed, universal healthcare, etc. all contribute to an environment where the lowest wage isn’t zero. It is not a stretch at all to say that the legal infrastructure surrounding unions and requirements surrounding dealing with them count as “regulation”.

There are lots of instances where regulations fixed a broken system. Government regulations fixed the broke system of using child labor and fixed the broken system of slavery.

[Dracophoenix]

Does that mean open source work should count as slavery? You're right that the natural minimum wage is zero, but there's more to slavery than simply being paid nothing. I would think the enlightened you speak of would also know the difference between volition and compulsion.

[suture]

I do not at all understand the reason for your response. Do you really think that I was saying that doing something for free is always a form of slavery? I think it’s obvious the meaning and intent of what I wrote and only a disingenuous interpretation could have led you to respond as you did.

[Dracophoenix]

Please stop with the motte and bailey. I interpreted what you wrote and what you wrote was itself disingenuous. You stated that a zero-dollar income in a laissez faire market is sufficient to render anyone earning that amount a slave. You made no exceptions. As to the claim that the "more enlightened" are those who would reject the laissez-faire system, you've presented no credible evidence to that either.

[suture]

Obviously it was a whimsical way of saying “slavery is the natural minimum wage” in the absence of all regulations (which is a proxy for government/societal interventions). Some person/company will be willing to enslave people if they can get away with it. Clearly volunteering is not what people mean by “working for $0 per hour”. This is obvious to anyone who reads what I wrote without being disingenuous. Equally obvious is that a laissez-faire system is neither possible, desirable, or scalable. I won’t convince you of this and you won’t convince me otherwise.

You are free to desire to live in a world where a wage of 0 is a reasonable thing for an employer to pay. Fortunately for me people like you have little chance of seeing this desire come to fruition. There is no point in responding further but I will read and contemplate whatever response you decide to make.

[thaumasiotes]

> The natural minimum wage that the market determines (absent all regulations) is $0 per hour and is called slavery.

Slaves are paid much more than that.

[dragonwriter]

> Slaves are paid much more than that.

No, they aren’t.

Slaves have a higher total cost to employ than that, but none of it is wages.

[thaumasiotes]

That's wrong; much of it is wages. Sometimes those wages are paid in cash, but in the more common case where they aren't, the slaves still get paid in food, clothing, and housing. Each of those is a direct transfer of value to the slave.

[dragonwriter]

> the slaves still get paid in food, clothing, and housing.

If those are in the form of earned compensation to which the slave is entitled (which, sure, along with actual wages is common in some historical forms of slavery, but not really the norm in chattel slavery), they are benefits, not wages. If they are (as is typically the case with chattel slavery) discretionary items given at the pleasure of the employer based on the perceived future value to the employer of the worker having them now, they are just maintenance costs of the slave as an industrial machine.

[DoreenMichele]

I don't know where you get that idea. In the historical Deep South of the US, slaves had to work the plantation all day without pay, then go home and grow their own food on the worst strips of land not deemed worth cultivating by their owners.

Traditional African American foods, like hog jowls and chitterlings, were based on the discards that White slave owners would not eat.

[munk-a]

That's a pretty awful take - labour exploitation in America is rampant with theft by employer being our largest crime by value. It's probably fair to say that 25/hr isn't what the minimum wage should be set to - but it exists to prevent extreme abuse of employees.

[pessimizer]

> There is a natural minimum wage that the market determines.

The market "determined" this "natural minimum wage" because a patchwork of laws dictated (somewhere around) a $15 minimum wage in a lot of locations and as a policy for many state/city/county contracts.

[irrational]

Isn’t it? My sister lives in a state where the true minimum wage is federal minimum wage. My teenager and her teenager both work at the same fast food place. My son makes $16/hour, her son makes $7.25/hour.

[corrral]

This is nonsense unless you're ready to go deeper on what "true" and "natural" mean here. Beware: it'll be easy to run into tautology.

[dionian]

> It's funny to see this dynamic at a time when the federal minimum wage is still stuck at $7.25/hr.

If we raise min wage then they'll just fire people to make up the cost, not sure it's going to help

[idiotsecant]

When are they going to start firing people to make up for the actual effective minimum wage being above 15 bucks for some time now? where I live is not even a particularly high COL area but fast food places hire for 16-17 an hour. They aren't hiring fewer people, they are struggling to hire, in fact! There is so much demand for workers that those places can't convince them to work for double the minimum wage given the crappy conditions they require. The idea that a rising minimum wage will result in lower employment, given that the current wage is lower in real terms than it was 30 years ago, makes absolutely no sense - the real world evidence is literally all around us right now.

[fugalfervor]

Assuming an even distribution of COVID deaths throughout the 50 states, 20,000 workers per state have died in the last two years. I wonder if that has anything to do with the hiring difficulties fast-food restaurants are facing. The number of deaths is probably also higher among those who would be fast-food workers, since the likelihood of death from COVID was correlated with poverty.

[jimmaswell]

How many 80 year olds were working in fast food in 2019?

[heavyset_go]

Before the pandemic, there were a lot of retirement-aged people working in food service, like an uncomfortable amount. I certainly haven't been out to eat as much as I have before COVID, but what I noticed was a suspicious lack of those older workers I've come to expect working in food service. A lot of restaurants and fast food places are running on skeleton crews, now, some of them with one or two 16 year olds running the whole businesses alone even during dinner rushes.

[fugalfervor]

This kind of response is why I asked the question, I guess. I don't know the answer!

[irrational]

Most of the people who I knew that died from Covid were not old people. I literally did not know of any old people that died from it. Even my 99 year old grandmother got it and beat it (this was pre-vaccine). She said that she beat the Spanish flu in the 1920s so she would beat Covid in the 2020s, and she did.

[throw0101a]

> If we raise min wage then they'll just fire people to make up the cost […]

Dropping employment due to higher (minimum) wages has mixed-data in empirical studies:

* https://en.wikipedia.org/wiki/Minimum_wage#Empirical_studies

[surement]

While the comment you're replying to is wrong, these empirical studies are ridiculous. Every price has some elasticity, but the fact is that if a worker earns an employer $8 an hour in revenue, they're not going to pay that worker $9 an hour, and if the minimum wage was greater than $8 an hour, then that worker would be out of a job, thus making $0 an hour. The studies about the price elasticity of labor also don't bother to prove that there are real-world benefits beyond the fact that a higher minimum wage sounds good. Being unemployed is not better than making a low wage.

[dwallin]

Your analysis overly simplifies the matter. For one, this assumes that there is a replacement solution available for the role the employee fills with a cost less than the cost of an employee. This is trivially falsifiable in the large majority of employment situations, if so you would see these solutions already being implemented in places with higher minimum wages. Businesses prefer making some amount $x over $0.

So what actually ends up happening in reality is, in order to not be forced to shutdown, the employer needs to increase the amount of per-employee revenue, which can happen in a number of ways:

- Raising prices (Easiest move, and even easier when labor costs increase for your competitors simultaneously)

- Negotiate lower supply costs (the threat of losing a big customer entirely can motivate a supplier to give up some percent of their profits)

- Increasing employee efficiency (improved processes, additional training, etc). Theoretically the company should have been doing these already but an existential threat is an even larger motivator than marginal profits. This could result in layoffs depending on how the efficiency is realized.

Really what ends up happening in reality is increased costs just get passed along. Yes, consumers probably end up spending more, but less in taxes are spent on benefits programs, making it a wash in overall cost to society. In fact, people who believe that government spending is inherently inefficient should theoretically love the idea of raising minimum wage as it allows us as a society to move resources from government spending into the free market.

[surement]

An employee that earns an employer $8 in revenue but gets paid $9 is a net loss of $1 to the employer. If x is -1 then $x is not better than $0.

If the employer could raise prices and still be in business, then they would already be doing it. Same thing with lowering costs. As for employee efficiency, yes, if you're forced to pay someone $9 then you will want to get at least $9 out of them. That means you won't hire anyone that's not experienced enough.

> Really what ends up happening in reality is increased costs just get passed along

Not if the employer wants to remain competitive. There are plenty of bigger companies with greater economies of scale that will happily run them out of business.

This isn't a nuanced problem. If you raise the price of something, demand drops. Whether the price in question is for things or labor is irrelevant.

[hansvm]

> This isn't a nuanced problem. If you raise the price of something, demand drops. Whether the price in question is for things or labor is irrelevant.

There's a little nuance.

Some anecdata: When I tried charging $0 to get my feet wet in consulting I had zero takers. Raising my hourly rate to $100 drastically improved my success rate (nothing else changed, I was still just some kid in high school with a knack for programming at the time).

The real world doesn't have perfect information and is more than happy to use imperfect signals to save time and effort (in any constant-bounded time that's provably required to hit any fixed desired epsilon of error). The price somebody is asking for is often enough a useful signal that demand need not be monotonic.

[Dave_Rosenthal]

I tend to agree with this conventional Econ 101 wisdom, but your comment got me wondering if raising the minimum wage would have an effect of driving people to build skills and push harder. I.e. think of a minimum wage as the government saying to workers, ‘Hey, if you want to be part of this economy, you better be at least X productive.’

[cbsmith]

It can also drive businesses to develop models where people are more productive. Productivity isn't just a function of skills and how much people "push", but also how businesses operate.

[surement]

What about teenagers and young adults with no work experience? They are the age groups with the highest levels of unemployment.

https://www.bls.gov/web/empsit/cpseea10.htm

In fact, very few people earn minimum wage past early adulthood. I don't remember where I got this figure but it was something like 93% of people over the age of 24 make higher than minimum wage. In any case, income is highly correlated with age until retirement ages.

https://www.statista.com/statistics/233184/median-household-...

The motivation to earn skills to make more money is there regardless of minimum wage laws.

[cbsmith]

> Being unemployed is not better than making a low wage.

You're presuming it's a binary choice; consider the systemic effect might not make it a binary choice.

Let's accept that it is a binary choice, then no, it's not necessarily better to be making a low wage, because that presumes a value for your time that is effectively zero. In truth, with your own time, you can find ways to feed yourself, provide yourself with shelter, etc., and when you are working you can't do that stuff. Let's assume though that one wouldn't take a wage that was a net direct loss like this, there's still the possibility that a low wage might be tactically beneficial, but strategically & systemically quite harmful.

[surement]

> with your own time, you can find ways to feed yourself, provide yourself with shelter, etc.

You still have the option to quit your job if you're employed and don't find it worth your while.

> strategically & systemically quite harmful

How?

[cbsmith]

> > with your own time, you can find ways to feed yourself, provide yourself with shelter, etc. ? You still have the option to quit your job if you're employed and don't find it worth your while.

Yes.

> > strategically & systemically quite harmful > How?

If that's more than rhetorical, I suggest you do some reading.

If it is rhetorical, I'll just assume you think everything would work great if we had a minimum prevailing wage of one penny for a lifetime's worth of labour. You know, because less than that would be slavery.

[Hasu]

> Every price has some elasticity, but the fact is that if a worker earns an employer $8 an hour in revenue, they're not going to pay that worker $9 an hour, and if the minimum wage was greater than $8 an hour, then that worker would be out of a job, thus making $0 an hour.

One of the many fallacies here that hasn't already been pointed out is that it's impossible to determine the exact amount of revenue a single employee is responsible for in any real world employment situation.

[labcomputer]

> One of the many fallacies here that hasn't already been pointed out is that it's impossible to determine the exact amount of revenue a single employee is responsible for in any real world employment situation.

Sure. But if it costs $100/hr in labor to run a McDonalds (split between cashier, burger flipper, fry guy), $100/hr in ingredients, and the store only produces $150/hr in revenue, it's not hard to figure out that those wages are unsustainable.

Blah blah, businesses don't deserve to exist if they can't pay whatever wage. Sure, but I'm not saying McDonalds deserves to exist--I'm saying those people won't have jobs when it becomes very obvious that the store is losing money.

Just because you can't pinpoint the exact contribution of every worker does not mean that you can't have a pretty good estimate of the contribution from retail workers in practice.

[jedberg]

In most cases, and almost certainly in any minimum wage case, sure.

But sales people have a pretty directly attributable profit contribution.

[Hasu]

That's true, and there's going to be a spectrum of measurement, from very measurable roles to roles that are almost impossible to measure. I'd say even in the sales case, something that isn't getting measured is how much a good salesperson can rely on other parts of the organization to answer questions for customers that can make the difference in landing the sale or not. That attribution usually goes entirely to the salesperson, when someone else's knowledge was key to the transaction. It's a team effort.

This is most obvious when you take the extreme case of looking at the department level - sales and marketing are "responsible" for 100% of the revenue, but if you delete legal, support, R&D, HR, and finance, your revenue goes to zero pretty quickly.

[surement]

So what, an employer is gonna go on losing money and will never look into why? If they go out of business then the employee will also lose their job.

[Hasu]

If the aggregate across all employees is negative, the company is losing money. If the aggregate over all employees is positive, you have profit.

It's like that old joke about marketing budgets: half is wasted, but it's impossible to tell which half. The same can be true for employees, maybe half your employees lose money, but the other half make enough that you're profitable, but you can't attribute every dollar that comes into your company to the specific employee that generated that dollar.

[jwagenet]

However, a if the minimum wage is increased to $9, the collective spending power of the minimum wage cohort may increase enough to increase the per worker revenue to $9 or more. Likewise, if the employer cohort doesn’t believe this to be the case and fires workers, then X% of the workforce will no longer have the discretionary spending to support $8 in revenue.

[babypuncher]

If a position cannot pay well enough for the employed to sustain themselves then it should not exist in the first place.

If there literally are not enough jobs that can pay sustainable wages to everyone in need, then we need to rethink how our economy works on a fundamental level.

A system that requires some portion of the population to go hungry or even homeless is ethically indefensible.

[surement]

Not sure how being unemployed is better than making a low wage in terms of being hungry or homeless. Are you just trying to advocate for communism?

[babypuncher]

I'm not saying that being unemployed is better than making an unlivable wage. I am saying both outcomes are unacceptable.

And I am not advocating for any specific solution, just saying that the current system does not work. I don't believe in false dichotomies. Being unhappy with capitalism does not automatically make one a communist.

[Supermancho]

> Being unemployed is not better than making a low wage.

In the US, it depends on the programs that are available to you. For some people, a small part time job sabotages some existing subsidies. This is a critical component of the institutional poverty, that is now generational, in the US.

[surement]

I don't know about you but I think there's something wrong with programs that incentivize not working and gaining experience.

[scarface74]

> Every price has some elasticity, but the fact is that if a worker earns an employer $8 an hour in revenue, they're not going to pay that worker $9 an hour,

Unless they are a tech company funded by VCs…

[SecondTimeAgain]

So they're going to fire people to make up the cost of not being able to hire people? Maybe I'm not understanding you're comment.

[ipaddr]

The comment was insightful.

One part of the company raises wages the other fires to increase profitability and reduce headcount. Both groups get a bonus and the group in charge of productivity get culled. Welcome to 2022

[vlunkr]

But then the warehouses are understaffed... Not sure that's a win

[ipaddr]

That only matter for the productivity team and that group gets fired because they are below their metrics. The hiring group just raised wages and they are doing all they can. The profitability group needs to get the numbers back on track and does the firing.

Isolated the decisions make sense.

[macinjosh]

My understanding is that yes if their growth cannot be maintained because of labor shortages they will have to begin shrinking down to the size the labormarket can bear.