Re-Framing Capitalism

[Swammerdami]

I have frequently said "Economics should not be viewed as a morality play." This thread has good examples of contrary thinking.

Jeff Bezos earns more money than his workers. Duh! That's called ordinary capitalism. ("If you don't like it move back to North Korea!" )

Do be aware, by the way, that some small-business owners actually make LESS than their low-wage workers. They're struggling (gambling) in hopes of a turnaround. If they succeed, must they split the profits with those who "produced the goods or services"? If I bet on 22 at the roulette table, and 22 wins, must I split the proceeds with the croupier "who made it all possible"?

Emotionally I align with progressive Democrats. But some of their ideas are idiotic. I've previously mentioned watching Ted Kennedy on C-SPAN circa 1994 arguing with a bag of BigMac and Fries. "Don't you think you have a MORAL obligation to provide your employees with health insurance?" Who nominated that imbecile to be the Exalted Cyclops of the Democratic Party?

Obviously it's not just the Left that introduces "morality" inappropriately. If Amazon workers set up picket lines, the Right might chime in with "Don't you have a MORAL obligation to let Amazon hire scabs?"

What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer?

It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it

That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little?

I've heard the OPPOSITE argued! That if UBI (cf. Andrew Yang) were introduced, workers would be less desperate and companies like Amazon would need to offer more money to attract them.

Government-paid health care? Yes.
Government-subsidized child care? Yes.
Increase taxes on corporations and the rich? Yes.
Incentivize hiring by changing payroll tax schedules and insurance mandates? Yes.
Raise the federal minimum wage? Yes. It may be a good approach given political realities.
Government-mandated improvements in working conditions? Maybe.

But framing the discussion to label corporations and the rich as "Evil" or positing their "moral obligations"? This is nonsense. Count me out.

 

[DBT]

You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages.

If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate.

You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages.

I'm not assuming anything.

 

[Bomb#20]

Why did you write all that? Were you attempting to persuade anyone to see things your way?

Duh, obviously I was. That's why pretty much everyone here writes stuff (including you).

Whom were you trying to persuade, then? What person who did not already agree with you could plausibly have been persuaded by a claim as blatantly false as "The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware"? That's so ridiculous you surely didn't even believe it yourself. You're a very smart guy; I don't know why you feel the need in thread after thread to make transparently imbecilic claims like that. It looks like some cross between telling your own "team" what it takes pleasure in hearing, and performance art.

You, of course, decided not to do so, apparently because you share with many Americans an inability to distinguish between 'capitalism' and 'freedom'.

You, of course, should be dismissed by everyone, because you're a guy who makes baseless trumped-up racism accusations.

Whether I am able to distinguish between 'capitalism' and 'freedom'* is not an inch more relevant to whether we're trying to be persuasive and to the correctness of your "The only difference in governance between any large American corporation and the former USSR is the former's lack of military hardware" claim than your bad habits in overpopulation debates. When you brought up my alleged inability* you were making an ad hominem argument. Don't do that.

Yes, of course I was trying to persuade anyone. Specifically, I was trying to persuade you not to advocate lunatic-fringe positions that do nothing but throw gunk into what could be a rational discussion; I was trying to persuade DBT to apply critical thought to what people on his own side argue before reflexively "Like"ing their posts; and likewise any leftists reading your post similarly reflexively.

(* And of course I am able to distinguish between capitalism and freedom, and nothing I wrote suggests otherwise. You made that up out of whole cloth. There can be freedom without capitalism in any hunter-gatherer tribe with reasonable leadership; and as for capitalism without freedom, the SCOTUS just authorized it and it's the law of the land in thirteen states.)

If your thesis is that the only important difference between the USSR and a modern American corporation is that in the latter case, people are free to leave, then it's not communism, or socialism, but imprisonment that you oppose.

But of course that's not my thesis and you have no reason to imagine it is. You claimed the only difference in governance was military hardware, so I disproved that idiocy with a counterexample. This does not constitute a claim that imprisonment is the only counterexample. I was obviously not even stipulating that that's the only important difference in governance, let alone the only important difference at all. Duh!

Corporations are centrally planned economies, and many are larger both in economic terms and in terms of population than many nation states. Centrally planned economies clearly work,

That's ridiculous. A corporation is not an economy. You might as well claim an elephant is a biosphere. A corporation is one little component of a much larger economy. A centrally planned goods production operation's success is no more proof that a centrally planned economy would work than it's proof that an elephant would work without a forest generating tons of vegetation. Corporations work, among other reasons, because they receive and respond to external price signals from suppliers and customers.

In any event, for you to even bring up central planning misses the point altogether. lpetrich was implying that production and distribution should be treated as independent problems, as Marxism advocates. Central planning failed in the USSR not merely because it doesn't scale well from a corporation to a whole economy, but also because Soviet central planners tried to treat production and distribution as independent problems. Corporate central planners don't do that.

even (as you point out) without the use of force to keep people from leaving.

We don't disagree that people should be allowed to leave; We do, apparently, disagree on whether this freedom is an attribute of capitalism, or an independent variable that is unrelated to the choice of free markets vs central planning.

Central planning is a red herring; this freedom is an attribute of linking production and distribution. One of the ways corporations are individualist operations is, as I said, that corporate governance tries to ensure that the cooperative operation not only benefits the collective, but also benefits each individual participant. People being free to leave pushes corporations to govern themselves that way -- they have to distribute enough to every individual whose help they need to make it worth his while, or else go broke.

If the central planners were smart enough, central planning could in principle provide prosperity and freedom to everyone in a whole economy, while allowing people to leave, and give people enough reason to stay to keep the system afloat. Soviet planners and academics in the 60s and 70s had high hopes that they'd be able to do that by using computers to overcome their horrific scaling problems. The trouble is, for that to work the planners would need to plan distribution so as to duplicate the incentive structures that corporate planners evolved to persuade suppliers and customers to stay, instead of planning distribution to satisfy Marxist ideological conventions about who ought to get what. So if the planners are unwilling to do that, or if they've been trained since childhood to never be able to grok that that's what they need to do, then the people they need to stay will choose to leave. Then the governance structure will have to choose between letting people leave and losing its power, or letting people leave and abandoning its instinct to delink production and distribution, or leaving up its inward-curving barbed wire fences and deploying half its workforce to imprisoning the other half.

Making sure every individual benefits is a necessary step in a non-slavery production process; it's the step in the process that owners perform; when collectivists adopted the faith that owners are an unnecessary and parasitical part of the production process who can be dispensed with without negative consequences, that is the step they set themselves up to lose; when collectivists have historically taken power and gotten rid of the owners, that is the step they lost; that is why when collectivists have historically taken power and gotten rid of the owners production plummeted; that is why collectivists historically reintroduced slavery.

 

[Loren Pechtel]

You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages.

If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate.

You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages.

I'm not assuming anything.

You're not addressing my point.

 

[DBT]

You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages.

If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate.

You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages.

I'm not assuming anything.

You're not addressing my point.

You made no point to address. You made an assertion which has been addressed time and time again. I could explain again, but nothing would change. What I said about power imbalance and wage rate negotation is clear enough. The articles I posted on low pay and food stamps, etc, are clear enough.

 

[Bomb#20]

Having faith that production and distribution are separable problems just so one can feel self-righteous, by appeasing one's unexamined hunter-gatherer moral intuition, by forcing farmers to live by it, in the teeth of the empirical evidence that farmers living by hunter-gatherer rules is as sure a recipe for starvation as hunter-gatherers living by farmer rules is.

I agree with some of your views, but your view of Stone Age cultures is too reductionist and at best misleading.

I wouldn't have thought I'd said enough about stone age cultures for it to register on a reductionism scale. What specifically did I say that you think is wrong or misleading?

I don't think it's controversial to say hunter-gatherer societies are generally more egalitarian than farmer societies. The whole point of the "gathering" part of hunting and gathering is to take the plants you find back to the community base and share them with others instead of eating them on the spot like a chimp. And when a hunter brings back game, everybody gets some; the hunter doesn't sell cuts of meat off to the highest bidders.

We have a thread discussing The Dawn of Everything where IIDB experts may comment on the Davids' comparisons of early forager, farmer, and pastoralist societies. (My readings are as yet inadequate for me to post a summary.)

Haven't read it. Has the part you read said something that conflicts with what I said?

Anyway, why would one want to go back that far? For most of history, most unskilled or semi-skilled workers have endured barely subsistence income.

There is good evidence of English prices and wages. In the early 14th century annual real wages for labor in England...

I'm not following. Who is it who wants to go back that far? What point are you making, and how does it bear on the points I was making?

If you mean, why am I talking about stone age cultures in the first place, it's for context. A lot of people, especially leftists, make arguments that rely on zero-sum-game reasoning, even though it should be painfully obvious to everyone, from the fact that today eight billion people have a much higher standard of living than 400 million people had in the 14th century, that economies are not a zero-sum game, and haven't been a zero-sum game since people figured out you can bury a bag of grass seed, wait six months, and fill ten bags with new grass seed. So how should people react to hearing zero-sum-game arguments? Well, we could look back no further than the 14th century, see no fundamental change in the principles of production, assume history doesn't matter, and try to account for their arguments by saying "Leftists are idiots." But that doesn't get us anywhere.

It seems to me it's more useful to ask what accounts for the enduring appeal of zero-sum-game reasoning. And the answer that makes sense to me is that zero-sum-game reasoning was essentially correct in the era before people were taking deliberate action to increase the amount of renewable resources. If you hunt and eat two rabbits when you only need one, there will be one less rabbit out there in the meadow for the other people in the community to hunt and eat. Your prosperity impoverishes others. And that's how economics worked for 99% of mankind's existence on earth. Of course thinking that way got wired into our brains -- we evolve a lot more new DNA in a million years than in ten thousand.

It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it

That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little?

I've heard the OPPOSITE argued! That if UBI (cf. Andrew Yang) were introduced, workers would be less desperate and companies like Amazon would need to offer more money to attract them.

^^^^ That ^^^^ is a cause-and-effect mechanism.

 

[Loren Pechtel]

You are making the fundamental fallacious assumption that the work is somehow being subsidized. A look at history shows that's not the case--the worker not getting enough to live on doesn't raise wages.

If workers do not get a pay rate that is sufficient to meet their basic needs, therefore require assistance from the government, they are for all practical purposes being subsidized. The company benefits by not having to pay a higher rate.

You are assuming that all workers have the same needs. Look to the distant past--what actually happened is the workers with higher needs starved (or, more likely, their children starved) while the workers with lower needs barely made it. The lack of a government subsidy didn't force higher wages.

I'm not assuming anything.

You're not addressing my point.

You made no point to address. You made an assertion which has been addressed time and time again. I could explain again, but nothing would change. What I said about power imbalance and wage rate negotation is clear enough. The articles I posted on low pay and food stamps, etc, are clear enough.

Why does the past not show what would happen if you remove the government aid?

 

[Bomb#20]

What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer?

It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it

That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little?
...
Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs?

Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates.

Well, in the first place, the company isn't expecting the government to do anything here. The company and the employee trade money for labor whether the employee is covering rent with a government subsidy, or is crashing with a friend, or is living out of his car, or hasn't moved out of his parents' home.

And in the second place, why do you call the subsidy "part of their employee's wages"? Wages are what the buyer of labor pays for labor. When an Amazon worker gets food stamps, that's not payment for labor. The government gives him food stamps whether he's working or not. The government is buying an improved living standard for one of its citizens; it's not buying his labor.

You appear to be coming into this with the assumption that since we as a society have decided a person is worth "the basics of rent, food, clothing, transport", it must necessarily imply that his work is worth "the basics of rent, food, clothing, transport". How the heck does that follow? That's magical thinking. People are more than the services they do for others. We are ends in ourselves, not mere means to an end.

Act so as to treat humanity, whether in your own person or in that of another, at all times also as an end, and not only as a means.

- Groundwork of the Metaphysics of Morals, Immanuel Kant​

And the point being that without collective bargaining

That is a point, not the point. We're arguing about subsidies, not unions.

individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times.

Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer.

 

[DBT]

What logical justification do you have for claiming that a subsidy to a worker is a subsidy to her employer?

It's not hard to grasp, if workers are paid rates that are so low that it doesn't allow them to pay for the basics of rent, food, clothing, transport, where the shortfall is paid by government subsidy, the government subsidy enables the firm to keep paying their workers sweet ... all for their time and labour because, well, the government is taking care of it

That appears to be magical thinking. By what cause-and-effect mechanism does the government subsidy enable the firm to keep paying so little?
...
Not everyone knows how to increase an employer's income enough to cover the entire cost of "the basics of rent, food, clothing, transport". Why should such people be prohibited from covering as much of that cost as they can? And why should they be prohibited from learning on the job and thereby upgrading their skills to the point where they do know how to increase an employer's income enough to cover those costs?

Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates.

Well, in the first place, the company isn't expecting the government to do anything here. The company and the employee trade money for labor whether the employee is covering rent with a government subsidy, or is crashing with a friend, or is living out of his car, or hasn't moved out of his parents' home.

And in the second place, why do you call the subsidy "part of their employee's wages"? Wages are what the buyer of labor pays for labor. When an Amazon worker gets food stamps, that's not payment for labor. The government gives him food stamps whether he's working or not. The government is buying an improved living standard for one of its citizens; it's not buying his labor.

You appear to be coming into this with the assumption that since we as a society have decided a person is worth "the basics of rent, food, clothing, transport", it must necessarily imply that his work is worth "the basics of rent, food, clothing, transport". How the heck does that follow? That's magical thinking. People are more than the services they do for others. We are ends in ourselves, not mere means to an end.

Act so as to treat humanity, whether in your own person or in that of another, at all times also as an end, and not only as a means.​

- Groundwork of the Metaphysics of Morals, Immanuel Kant​

And the point being that without collective bargaining

That is a point, not the point. We're arguing about subsidies, not unions.

individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times.

Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer.

The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer.

A power imbalance that enables the employer to offer shit rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance, which serves to maintain the status quo.

 

[Swammerdami]

I agree with some of your views, but your view of Stone Age cultures is too reductionist and at best misleading.

I wouldn't have thought I'd said enough about stone age cultures for it to register on a reductionism scale. What specifically did I say that you think is wrong or misleading?

I don't think it's controversial to say hunter-gatherer societies are generally more egalitarian than farmer societies. The whole point of the "gathering" part of hunting and gathering is to take the plants you find back to the community base and share them with others instead of eating them on the spot like a chimp. And when a hunter brings back game, everybody gets some; the hunter doesn't sell cuts of meat off to the highest bidders.

We have a thread discussing The Dawn of Everything where IIDB experts may comment on the Davids' comparisons of early forager, farmer, and pastoralist societies. (My readings are as yet inadequate for me to post a summary.)

Haven't read it. Has the part you read said something that conflicts with what I said?

"At best misleading" was a euphemism for "WRONG." I'll trouble myself to type in words from the Dawn book now in front of me and opened to page 99.

. . . the Nambikwara lived in what were effectively two very different societies. During the rainy season they ... practiced horticulture; during the rest of the year they dispersed into small foraging bands. Chiefs ... during the 'nomadic adventures' of the dry season ... gave orders, resolved crises and [were] authoritarian. [During the wet season life was more anarchistic and socialistic]

I'm much too lazy to type in an entire paragraph, let alone the whole book. But even before I read Dawn I thought it was well-known that early farming societies tended to be collectivist, while hunters and especially herders were more likely to develop notions about property rights.

There is good evidence of English prices and wages. ...14th century...

I'm not following. Who is it who wants to go back that far? What point are you making, and how does it bear on the points I was making?

If you mean, why am I talking about stone age cultures in the first place, it's for context. A lot of people, especially leftists, make arguments that rely on zero-sum-game reasoning, even though it should be painfully obvious to everyone, from the fact that today eight billion people have a much higher standard of living than 400 million people had in the 14th century, that economies are not a zero-sum game, and haven't been a zero-sum game since people figured out you can bury a bag of grass seed, wait six months, and fill ten bags with new grass seed.

According to the website Measuringworth, the average annual real wage in England was £2682 in 1389, compared with barely half that level (£1449) in 1801. Even by 1867, 80 years after James Watt's perfection of the steam engine, England's real wage was only £2991, about 11% higher than the 1389 wage.

This suggests to me that the meme "A rise in productivity raises all boats" is an over-simplification of economic reality.

 

[Bomb#20]

Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates.

Well, in the first place, the company isn't expecting the government to do anything here. ...

And the point being that without collective bargaining individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times.

Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer.

The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer.

A power imbalance that enables the employer to offer ... rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance,

As has been repeatedly pointed out by multiple people upthread, the government assistance isn't what's causing the power imbalance, isn't what's causing the employer to offer low rates and isn't what's causing the employee to take them rather than leave. Quite the reverse -- the assistance gives employees more options, which improves their power and helps them negotiate higher pay.

which serves to maintain the status quo.

Are you talking about the effect on the whole society rather than on an individual employee and employer? If by "maintain the status quo", you mean the availability of food stamps and other government assistance to the working poor helps cause employees to be paid low rates because it helps prevent a socialist revolution, then no, that's ridiculous. If there were a socialist revolution then the current system of private employers competing with one another for employees would be replaced with a government monopsony: only one buyer for labor. Of course the state would take advantage of its lack of competitors to pay the workers even less than private employers pay them. When has there ever been a state-owned economy that paid the workers as well as they're paid in the free world? There's a reason the barbed-wire fences around the Eastern Bloc curved inward.

 

[DBT]

Magical thinking lies in a company expecting the government to pay a part of their employees wages because they can get away with paying substance rates.

Well, in the first place, the company isn't expecting the government to do anything here. ...

And the point being that without collective bargaining individual workers have little or no power unless they have skills that happen to be in demand. This has been explained numerous times.

Well, sure -- so if you want to unionize, unionize. But the circumstance that it would be prudent for workers to unionize doesn't magically turn a subsidy to a worker into a subsidy to the employer.

The issue is not whether the company expects the government to do anything, but a power imbalance between individual workers and their employer.

A power imbalance that enables the employer to offer ... rates, which the employee takes or leaves With no other option, many persevere by applying for food stamps and government assistance,

As has been repeatedly pointed out by multiple people upthread, the government assistance isn't what's causing the power imbalance, isn't what's causing the employer to offer low rates and isn't what's causing the employee to take them rather than leave. Quite the reverse -- the assistance gives employees more options, which improves their power and helps them negotiate higher pay.

You missed the point entirely.

I have never made the claim that government assistance is causing the power imbalance between management and workers.

The power imbalance existed long before government assistance and it is the reason why unions were formed in the first place. I've been through all this.

The point is that government assistance should not be necessary for full time workers.

which serves to maintain the status quo.

Are you talking about the effect on the whole society rather than on an individual employee and employer? If by "maintain the status quo", you mean the availability of food stamps and other government assistance to the working poor helps cause employees to be paid low rates because it helps prevent a socialist revolution, then no, that's ridiculous. If there were a socialist revolution then the current system of private employers competing with one another for employees would be replaced with a government monopsony: only one buyer for labor. Of course the state would take advantage of its lack of competitors to pay the workers even less than private employers pay them. When has there ever been a state-owned economy that paid the workers as well as they're paid in the free world? There's a reason the barbed-wire fences around the Eastern Bloc curved inward.

Isn't it clear by now that I'm talking about an inherent power imbalance between individual workers and management? That it is this imbalance of power that enables management to suppress wage rates in a certain sector of the economy, Walmart, Amazon, fast food industry, etc.

 

[Swammerdami]

The point is that government assistance should not be necessary for full time workers.

What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"?


When in a verbose mood I might propose 2 or 3 possible interpretations of your sentence, and discuss them in turn without further input. However I've expended my daily quota of unsolicited verbosity in another thread in a magnificent atomic-bomb counting post (and without garnering a single Like ).

 

[DBT]

The point is that government assistance should not be necessary for full time workers.

What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"?


When in a verbose mood I might propose 2 or 3 possible interpretations of your sentence, and discuss them in turn without further input. However I've expended my daily quota of unsolicited verbosity in another thread in a magnificent atomic-bomb counting post (and without garnering a single Like ).

I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy.

That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage.

Supply and Demand

“At the bottom end, there’s really no shortage of people that can do low-skilled work, and that’s true in rich countries as that work gets automated or offshored and sent overseas,” explained Hay Group’s Ben Frost, global product manager for pay products, during a March 2015 podcast on the report’s findings. “What that means is that there is very little pressure to increase pay for jobs at the bottom end, where there is more supply than there is demand.”

''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least $16 an hour. McDonald’s, Wal-Mart and T.J. Maxx also have announced increases for their lowest-paid workers.

“How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?”

 

[Swammerdami]

Do NOT think I am arguing against your position. I just find your choice of words confusing.

The point is that government assistance should not be necessary for full time workers.

What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"?

I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy.

That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage.. . .

''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least $16 an hour. . . .

“How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?”

The claim I asked about is, in effect, that the lowest-paid workers SHOULD get a wage higher than the present $7.25 minimum. And your first sentence in defense of the claim is that workers do NOT get such a wage. Do you see my confusion? I still don't know if your "should" refers to a logical, economic, or moral implication.

Seven years ago the Aetna CEO said he was raising wages to $16 minimum, and challenged other CEOs to do the same. Did this impose a moral obligation on those other CEOs? Since that was seven years ago and some wages are still low, it doesn't seem to have forced wages up by competition for labor.

If you were a powerful Congressman, what remedies would you propose? Higher minimum wage? Dictating labor representation on boards, as some European countries do? Some sort of UBI? I am open-minded about remedies; I just find words like "SHOULD" to be confusing and ambiguous.

 

[bilby]

What I think DBT is saying, is that if government assistance were not present, the business model would collapse because a large fraction of their workforce would be dead.

 

[Loren Pechtel]

The point is that government assistance should not be necessary for full time workers.

Take it up with whatever deity you think made the system.

It's not the responsibility of the companies to deal with the problem as they didn't cause it.

 

[DBT]

The point is that government assistance should not be necessary for full time workers.

Take it up with whatever deity you think made the system.

It's not the responsibility of the companies to deal with the problem as they didn't cause it.

The system is rigged by those in power and position to favour those in power and position, tax breaks, labour laws, poor minimum wage rates, etc.. Government looks after the big end of town and the little guy is left to rot....oh, wait, they may need food stamps to get by to prevent mass protests or a revolution.

 

[DBT]

Do NOT think I am arguing against your position. I just find your choice of words confusing.

The point is that government assistance should not be necessary for full time workers.

What exactly does this statement even mean? Is it intended to be a fact of logic, a fact of economics, a fact of morality, or what? Can you rephrase and explicate your point without using words like "should"?

I'm saying that pay rate is not necessarily set according market value or an employee's contribution to the running of a company, its profit margins or the national economy.

That without collective bargaining the average worker lacks the leverage, so is not in a position to secure a better deal, at least a livable wage.. . .

''Aetna CEO Mark T. Bertolini told the Wall Street Journal (April 6, 2015) that he expects a “groundswell” of wage increases for the lowest-paid employees at large companies in the coming months. In January, the health insurer said it would raise wages for its lowest-paid employees to at least $16 an hour. . . .

“How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?” Bertolini asked. “Instead of pointing at Washington,” he said, “why don’t we help everyone in our organization share in the economic recovery, and make this move, and ask other CEOs to do it?”

The claim I asked about is, in effect, that the lowest-paid workers SHOULD get a wage higher than the present $7.25 minimum. And your first sentence in defense of the claim is that workers do NOT get such a wage. Do you see my confusion? I still don't know if your "should" refers to a logical, economic, or moral implication.

Seven years ago the Aetna CEO said he was raising wages to $16 minimum, and challenged other CEOs to do the same. Did this impose a moral obligation on those other CEOs? Since that was seven years ago and some wages are still low, it doesn't seem to have forced wages up by competition for labor.

If you were a powerful Congressman, what remedies would you propose? Higher minimum wage? Dictating labor representation on boards, as some European countries do? Some sort of UBI? I am open-minded about remedies; I just find words like "SHOULD" to be confusing and ambiguous.

Unless workers adopt collective bargaining, unionize and lobby, increase their leverage, fight for a better deal, not much is likely to change.
Government tends to look after the big end of town and unless pressure for change is applied, nothing is likely to change.

I'm just pointing to the root cause of the issue, a power imbalance between individual workers (without special skills) and management, which allows management to get away with paying substandard wages and poor working conditions, ie, the government needs to step in and subsidize low-income workers.

Is that how a capitalist economy works?

 

[Swammerdami]

I think that IS how capitalism works. Production is always going to be divided among unskilled labor, skilled labor, land and capital. Today's pay discrepancy between unskilled labor and highly skilled labor is huge. And high populations naturally push down the amount of scarce land the average person can hope to own.

There has been huge increase in accumulated capital (factories, robots, etc.). Figure 6.2 in Piketty's book shows the split of income between capital (incl. land) and labor in France. In 1860 it was 57/43 — labor still got almost half the "pie." In 2010 it was 74/26 — capital's income was almost thrice labor's. And a lot of the labor income goes to highly-skilled labor. A lot of "capital" is intellectual or intangible property: I don't know how Piketty handles this.

In the olden days, wheat, barley and eggs were a large share of income; and the farm laborers who produced this food got a largish share of its value. But today a smart-phone is almost a necessity: people expect more than cereal, bread and eggs.

I hope the developed democracies come to their senses soon and realize some form of UBI is needed to cope with new economic realities. (Europe is already well along this path; in European countries both rich and poor tend to be relatively content.) Otherwise the gap between haves and have-nots will bring dystopia.