US workers are tired of being under paid and over worked!

[Ford]

Defense? You made an accusation: that I was bothered "quite a bit" that the market price for labour was higher in 2021 than it was in 2020. The accusation is false, and I was curious as to what made you make it. If you don't have a good answer, that's okay, but I do take exception to the idea that I am lying.

So then you're perfectly fine with workers demanding more for their services?

Do tell.

Of course I'm okay with it. Why wouldn't I be okay with it?

So we agree. Workers shouldn't have to settle for shit wages. Supply and demand works both ways. If employers don't offer up fair wages, their business should fail.

 

[Canard DuJour]

Employers in 2019: If you demand better pay and conditions, we'll automate your jobs.

Emloyers in 2021: Nooo! Come baaack!!

 

[Canard DuJour]

I got a bit of perspective from a friend who runs a bar/restaurant in Wisconsin with her musician husband. She's offering good pay, but is struggling to find people because the market is very competitive right now and her business is in an upscale area. I feel bad for her, but I wonder aloud if she'd be offering what she's offering if everything were like it was before.

Are you asking: would your friend pay a higher price for wage labour when instead she can get the same for a lower price?

I doubt she would. When I go to a store, I don't pay a higher price for a product than the store is asking. Would you?

Nor do you go the store and say 'this is what I'm offering, take it or leave it'

But that isn't what I asked. I asked if you think there is something wrong with your friend paying the market price for labour?

I dunno, but there's clearly something wrong with the idea that the market price for labour is the worker's marginal revenue product. We see that employers have been paying less than that due to asymmetrical bargaining power.

Given which, perhaps it's wrong to regard human labour as being like any old thing you buy at a store.

 

[Metaphor]

So we agree. Workers shouldn't have to settle for shit wages.

No, that isn't what I said. I said I have no problem with workers demanding more for their services. I also asked if you thought there was something wrong with employers like your friend offering a market price.

 

[Metaphor]

Nor do you go the store and say 'this is what I'm offering, take it or leave it'

Not for the majority of my shopping. I don't haggle at my local supermarket. But I do make offers at weekend markets and other places. The seller can advertise a price, and they can decide for themselves if it is take it or leave it.

I dunno, but there's clearly something wrong with the idea that the market price for labour is the worker's marginal revenue product. We see that employers have been paying less than that due to asymmetrical bargaining power.

Given which, perhaps it's wrong to regard human labour as being like any old thing you buy at a store.

So, it is wrong or weird to pay the market price for labour?

 

[Canard DuJour]

Nor do you go the store and say 'this is what I'm offering, take it or leave it'

Not for the majority of my shopping. I don't haggle at my local supermarket. But I do make offers at weekend markets and other places. The seller can advertise a price, and they can decide for themselves if it is take it or leave it.

Then in neither case does your 'price at the store' analogy seem apt, and especially not in the general case where the seller specifies the price.

I dunno, but there's clearly something wrong with the idea that the market price for labour is the worker's marginal revenue product. We see that employers have been paying less than that due to asymmetrical bargaining power.

Given which, perhaps it's wrong to regard human labour as being like any old thing you buy at a store.

So, it is wrong or weird to pay the market price for labour?

No, the idea that the market price for labour is the worker's marginal revenue product is patently wrong. Given which, I'd say it's wrong to bid wages down to as little as you can get away with.

To what extent any particular employer is thus wrong will vary case by case, since individual employers don't make the rules but often have to compete with the worst employers. I'd first blame those who make the rules based on false assumptions about labour markets.

 

[Swammerdami]

Here's an interesting and relevant article (from an Australian news source) I found in one of my tabs. (Perhaps it got there when I clicked on a TFT link; I don't remember!)

What do you think happens to unemployment when the minimum wage increases?
...
Well, the winners of the Nobel Memorial Prize in Economic Sciences this year [Card and Krueger] showed how to answer the question.

And they did it by looking at the real world. It's all about 'natural experiments'
...
In 1992, the minimum wage in New Jersey was scheduled to increase from $US4.25 to $US5.05.
... just across the border, in neighbouring Pennsylvania, the minimum wage wasn't going to increase.

They reasoned that, since eastern Pennsylvania had a very similar labour market to New Jersey's, they could run a natural experiment.
...
So, they surveyed 410 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum wage.
...
"Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 per cent."
...
However, their findings weren't welcomed by the establishment.
...
American economist James Buchanan, a Nobel Laureate himself (in 1986), was scathing of the suggestion that a core "law" of economics might not be universal after all.
...
"Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests.
"Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores."
...
In 1996, Australian Council of Trade Union economists Grant Belchamber and Tim Harcourt [wrote] "the evidence and argument assembled by Card and Krueger is so meticulous, exhaustive and well documented that it cannot be ignored by a discipline that proudly claims to be committed to rational thought."
...
As Nobel laureate Robert Solow once said: "The labour market is a social as well as an economic institution and the interaction between human beings cannot be interpreted in the same way as the supply and demand for dead fish."

 

[TSwizzle]

What's all the fuss about? If you don't like your job, or the terms, just quit.

Same solution as 10 years ago, 20 years ago.

Nothing new here. And if the employer is able to replace you with cheap labor, that's good for the economy.

The market fixes the problem -- profit motive, competition, supply-and-demand. If the demand is great enough, then the price (wage) increases as needed. But if the supply of replacement workers is sufficient, then the wage can stay low, saving on labor cost = good for consumers.

All that matters is getting the needed work done = better production = more wealth = higher living standard for all. Even if all the workers are replaced by machines. Whatever it takes.

Economics 1A.

The shortage of workers will be resolved fairly quickly judging by the number of people streaming across the border illegally plus the plane loads of refugees from Afghanistan. Or at least certain sectors.

 

[southernhybrid]

I got a bit of perspective from a friend who runs a bar/restaurant in Wisconsin with her musician husband. She's offering good pay, but is struggling to find people because the market is very competitive right now and her business is in an upscale area. I feel bad for her, but I wonder aloud if she'd be offering what she's offering if everything were like it was before.

Are you asking: would your friend pay a higher price for wage labour when instead she can get the same for a lower price?

I doubt she would. When I go to a store, I don't pay a higher price for a product than the store is asking. Would you?

Funny you should ask.

My father ran a small manufacturing outfit that made "foam packing products for industry" back in the day. You know...the stuff your television comes packed in? Yeah. Anyway, what with it being a factory in the rust belt, the unions would try to organize his shop. They'd send "ringers" in to get hired, they'd have "meetings" and demand the shop unionize.

So what did he do? Send in thugs to beat the union guys? Run ads on the local television stations? Buy some local politicians to write legislation? Band together with other factories in the area to fight the red menace?

Nope. His radical solution was to pay his employees as good or better than they could get from the local union, and treat them better as well. If someone needed a raise, they could walk into his office and make their case rather than go to their union rep and wait for collective bargaining to kick in. Without fail, whenever the union would try to organize his shop, the employees would throw them out.

Now here's the really crazy part. Did this "pay the employees a generous wage" thing tank the business? You might be surprised to learn that it didn't. In fact, his plant was so successful that the owner of the company used the profits from his plant to prop up the other two factories he owned.

From him, I learned that paying your people well and treating them well led to success, and paying rock-bottom wages and treating your employees like shit was a recipe for failure.

This is true. When I lived in South Carolina, there was a Michelin plant where people were paid very good wages along with excellent benefits. The plant had very little turnover and the workers were satisfied with their working conditions. Unions aren't needed when workers are treated well.

Most economists don't seem to think that the current inflation rate has anything to do with workers being paid more. It's more about the supply chain issues. Currently there are about 22,000 trucking jobs in the US, that aren't being filled, so it's difficult to get the merchandise to where it's needed.Naturally, decreased supply leads to increased prices.

Large corporations and many smaller businesses can certainly afford to pay their workers more without raising prices. Higher salaries might impact their investors and their upper level managers, but the increased cost of labor for the average workers doesn't have to mean higher prices, at least not in large corporations. It's obscene what most CEOs are currently receiving in wages and benefits. That was never the way things were when I was much younger. Pay upper management less and pay the average worker more, without raising prices.

I worked as a contractor for a family owned business. Because I loved the work I did, I stayed there for rather low reimbursement, but the lower level staff were treated horribly by the owners. They paid them slightly above the minimum wage, and the only benefits they received was 3 days of vacation and about 5 holidays per year. As one might expect, turnover was insane. I retired four years ago. Considering how difficult it is now to get people to work in health care, I can only imagine what's happening there. They are either treated the workers better or the turnover must be horrific.

And, it's not just pay. I've known people who didn't receive decent pay but their working conditions were good, and they were respected by management, so they didn't leave their jobs. That used to be fairly common, but these days, it seems that employers often treat their workers terribly, expecting them to work harder for the same low pay that they always received.

I worked in retail for about a year when I was very young. At least we were given a 40 hour work schedule and decent working conditions back then. It's good to see workers finally demanding better pay and working conditions. It seems to me that since government has been slow to raise the minimum wage, workers are getting higher wages due to worker shortages. I don't see this changing soon because a large percentage of people in my age range are retiring, the birth rate is dropping and a good percentage of women are simply leaving the workforce due to the high cost of childcare. Those who have degrees in nursing, or some other area that is in high demand, can always return to the work place once their children are old enough not to need supervision In the meantime, there will be shortages of workers in many areas. I've also read that there is a large shortage of teachers. In my area, the pay for teaching is very low and since we have no mask mandates or vaccine mandates, some teachers are leaving teaching out of fear of contracting COVID.

Just yesterday, I learned that farming is Georgia's primary industry, and most farms here are family owned. Some of these farmers want to make it easier for immigrants to enter the country to work in farming since they simply can't fill these positions with American workers. I strongly agree that we need to make it easier for immigrants to live and work here. Those who don't have specialized skills and education, are usually willing to help fill positions in areas that most American workers aren't willing to take.

 

[laughing dog]

When there is a shortage in a market, it means the prevailing market price is too low. So, when employers offer "the market price" and then whine they cannot find enough workers to satisfy their needs, they are simply engaging in "crybaby" economics. At some point, these employers need to balance their need for workers with the cost of hiring and maintaining them. It is not the duty of workers to accept insufficient (in their view) wages nor is it their fault that they will not accept insufficient wages.

For some reason, people are willing to accept the view that you get what you pay for when it comes to goods and consumer services but fail to see that applies as well to the labor market. If you want good workers (whatever that means to you), you will need to pay more.

 

[TV and credit cards]

Here's an interesting and relevant article (from an Australian news source) I found in one of my tabs. (Perhaps it got there when I clicked on a TFT link; I don't remember!)

What do you think happens to unemployment when the minimum wage increases?
...
Well, the winners of the Nobel Memorial Prize in Economic Sciences this year [Card and Krueger] showed how to answer the question.

And they did it by looking at the real world. It's all about 'natural experiments'
...
In 1992, the minimum wage in New Jersey was scheduled to increase from $US4.25 to $US5.05.
... just across the border, in neighbouring Pennsylvania, the minimum wage wasn't going to increase.

They reasoned that, since eastern Pennsylvania had a very similar labour market to New Jersey's, they could run a natural experiment.
...
So, they surveyed 410 fast food restaurants in New Jersey and Pennsylvania before and after the rise in the minimum wage.
...
"Relative to stores in Pennsylvania, fast food restaurants in New Jersey increased employment by 13 per cent."
...
However, their findings weren't welcomed by the establishment.
...
American economist James Buchanan, a Nobel Laureate himself (in 1986), was scathing of the suggestion that a core "law" of economics might not be universal after all.
...
"Such a claim, if seriously advanced, becomes equivalent to a denial that there is even minimal scientific content in economics, and that, in consequence, economists can do nothing but write as advocates for ideological interests.
"Fortunately, only a handful of economists are willing to throw over the teaching of two centuries; we have not yet become a bevy of camp-following whores."
...
In 1996, Australian Council of Trade Union economists Grant Belchamber and Tim Harcourt [wrote] "the evidence and argument assembled by Card and Krueger is so meticulous, exhaustive and well documented that it cannot be ignored by a discipline that proudly claims to be committed to rational thought."
...
As Nobel laureate Robert Solow once said: "The labour market is a social as well as an economic institution and the interaction between human beings cannot be interpreted in the same way as the supply and demand for dead fish."

Perhaps better paid employees made for happier employees which made for better service which made for happier customers which brought in more customers. This with restaurants having to pass these higher costs on to customers and the customers presumably were fine with this. Just can't solve for human behavior. I suppose there is a point at which the customer would balk at the price, break down and grudgingly prepare food at home. Though I think there's some room here. I think we can push that envelope.

 

[Toni]

Pre-pandemic, I remember listening to a radio piece about labor shortages in the oyster shelling market. One person who ran such a business was bemoaning that he couldn't get anyone to work for the minimum wage he offered. When asked if he thought he might do better if he raised the pay rate, he was simply speechless. That thought was incomprehensible to him.

I've spent a lot of time doing a lot of different kinds of jobs. Jobs where I was poorly paid and treated badly, I left at the earliest opportunity. Jobs where I was poorly paid and treated not great but had a great belief in the work--I stayed a bit longer. I had a job once with low pay but flexible hours and an interesting, fun atmosphere and I stayed.....until my boss left and wasn't replaced and my former boss's supervisor became my supervisor with way too much on his plate which caused him to be simultaneously a control freak and also to neglect some important functions which only he could do because he was a control freak. It became an unpleasant place to work and I left.

My last long term job was a job I never actually wanted, but it was for a terrific employer which treated its employees well. I was very well compensated (both wages and benefits) and my work unit was relatively flexible for healthcare (healthcare is notoriously inflexible) and supportive. In addition, my employer held high standards for itself and for its employees, and was extremely patient oriented. They are a premiere institution for very, very good reason. It turned out that my family got to know them when a couple of us were patients there and received excellent care--as did a number of friends who received care there after learning of our family's experiences. I found my job to be boring but I was treated well and well compensated and I thoroughly believed in my employer's mission and saw that they took their mission statement and mission very, very seriously. I stayed for a long time, until honestly, the long commute just got to me too much. My job was the second income in our family and my husband had no intention of retiring so I was able to take an early retirement. I'm still extremely proud to have been associated with my former employer and we're still patients there.

Loyalty comes from being respected which is reflected in compensation, opportunity for advancement, and reasonable work schedules that are predictable and fair and allow for some degree of flexibility. My husband needed surgery and needed to recover from surgery. My employer was happy to accommodate my requested time off and slight alterations to my schedule. My co-workers stepped up and offered to help cover shifts where I needed to be with my husband. Of course, I did the same whenever it was needed by other coworkers and of course, I was happy to put in overtime, adjust my schedule, do whatever was asked in return. It was a respectful workplace where everyone's ideas were solicited and listened to and when possible and practical, many were implemented. Everyone was held to high professional standards and everyone's professionalism was respected. I really wish I had started there earlier than I did. If I hadn't had such a long commute, I'm sure I would have lasted longer.

Some employers balk at raising pay for employees. I have a lot of sympathy for small employers who operate on very slim margins. But pretty often, those employers who are offering such low compensation are in fact, large chains with billionaire owners and many many layers of highly paid management types. Too many employers neglect to factor in the cost of hiring: finding suitable candidates, interviewing and screening them, and training them. Much of that cost can be eliminated through better retention which comes with better pay, and better work conditions. Happy employees are less likely to call in sick, disappear or steal or otherwise be bad employees. They are more productive and more reliable.

 

[Ruth Harris]

I am compensated very well in my job. I work for a very small company; it is only the owner and me. In Missouri, wages are typically low and most places used to start everyone at minimum wage. When I started this job 22 years ago, my boss started me at twice the current minimum wage at the time. I got my first raise after 3 months. I don’t even have to ask for raises; my boss gives them annually. I now make a very good wage plus very generous benefits. I also work remotely and have no commuting or extra clothing expenses.

Part of this is due to the fact that I have very specialized knowledge and experience in the field of construction accounting, and have solid knowledge of computer technology. However, I have talked to some friends who have the same expertise and work in the same field in this area, and they do not make nearly as much as I do nor are they valued as I am. I guarantee that if my employer had open positions, he would be overwhelmed by applicants. He has always believed that consistent reliable workers deserve to be treated well and rewarded. Unfortunately, this is a rare position among employers in my area.

And due to that attitude on the part of local employers, they are frantically begging for applicants. Our local population is fairly heavily weighted on the older side, and many people just retired when the pandemic hit. This has reduced the available worker pool noticeably. But unfortunately, some local businesses have not yet realized that they are not going to be able to continue to pay very low wages or treat their employees with no respect, and expect to have enough employees. There have been businesses who closed due to lack of employees, and they blamed the local workforce rather than accept the fact that they would need to pay more and treat people well to get someone to work. That seems to me like cutting off your nose to spite your face. The local employers who have read the writing on the wall are doing fairly well for the most part.

All that being said, I should also tell you that locally unions are not well regarded by most workers. I have no idea why this is so. Many of these people would benefit from union representation.

Ruth