Discussion in 'Economics & Trade' started by LafayetteBis, Jan 30, 2020.
From each according to their ability, to each according to the value of their work product.
You have opinion, nothing more. Labour economics confirms that wages are below worth as standard practice. We just have various reasons for it: monopsony power, discrimination, internal labour markets etc.
That underpayment is confirmed by empirical evidence (from decomposition methods to stochastic frontier) so you haven't got much of a defence for that opinion.
You do have some clever employers. Behaviouralists, for example, refer to reciprocation. In simple terms, care for your workers and your workers will care about your business. That can lead to obvious methods such as profit sharing. However, most companies aren't run by clever employers. They are run by people who adopt herd behaviour. If wage underpayment is the norm, they dont challenge it. They maintain it, creating inefficient wage norms.
Indeed. Unfortunately the American people tend to couple myopic economics and an innate conservatism. Perhaps Chomsky offers an explanation for that, with debt becoming a means to harvest compliance and acceptance of the status quo?
There is no way to come up with a definitive answer. Any attempt to give an answer would have to include the proviso that it depends on where one lives.
At the point where their skill-set(s) are sufficient to respond to the demands of the economy.
And, today, as the "economic data" is showing us, that "employment" is not just sufficient nowadays - there are two damn many earning at or around the basic minimum ($7.25/hour).
Mind you, I am all for a free-market that sets hourly-rates. The law of Supply&Demand must apply. But there are special-conditions where the hourly wage must be set at a minimum that meets basic requirements for a suitable lifestyle.
I expect that Supply&Demand will adjust to the new prices, and there will be no slacking of Demand. In fact, people with higher salaries will also be spending more and the economy thus becomes further invigorated.
Yes, it will - as I have suggested above.
"Doing something or doing anything" at the lower end of the pay-scale just doesn't work - unless that "something" enhances one's skill-set. Meaning, as one goes up the work-ladder, then, yes, skill-sets are key to better paying jobs. (Which is why access to training/education is key and should not be as costly as it today to too many at the bottom of the Income Ladder.)
But at the bottom - stuffing shelves at Walmart is no great skill-set challenge - and doubling salaries will also enhance income which also spurs Demand (for goods/services) which boosts the economy ...
Simply said, applying specific market metrics to the overall, is not 'empirical evidence'. Declaring an arbitrary line as to what actually is the value of labor, you are forgetting what created that line does not apply across the entire labor market.
Other factors you've conveniently dropped are external pressures by market, available labor, and cause for labor.
Most employers do provide incentives applicable to the labor pool they are drawing from. Standardized programs are not applicable for the entry level, nor the senior level, so trying to drop it all in a 'reciprocation' pot doesn't quite cut it.
You've also left out the driving forces of the current labor market here in the US, where positions that would normally easy to fill, are not. Wages have continued to rise for even the least experienced staff, to levels that drill some serious holes in your statement.
Some light reading for you.
Age. Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 8 percent earned the minimum wage or less, compared with about 1 percent of workers age 25 and older. (See tables 1 and 7.)
The empirical approach naturally takes into account human capital and compensating differentials. It naturally refers to the 'supply and demand' wage that should be paid. That wage isn't paid. Of course both orthodox and heterodox economics agrees that, under conditions of neoliberal labour markets, that wage will rarely be paid.
Nonsense comment. I referred directly to both supply and demand. Monopsony, for example, refers to labour supply elasticity. That of course describes labour availability and the extent that wages can fall below the level associated with productivity levels.
Guff! Most employers do not adopt incentives. They have no need. And when incentives are used, a cheaper version is adopted. Big business, for example, uses human resource management methods and 'internal labour markets'. They create compliance by ensuring promotion systems. Of course these systems also tend to encourage discriminatory behaviour...
I've referred to the evidence, both theory and empirical. Given the wage-productivity gap that infects the US, perhaps you need to do that too?
Compensating differentials? Those wages are most definitely paid. If they weren't, the employer wouldn't be in business very long, now would they? Especially when the position is a specialty base, your 'human capital' is a limited pool and will and can demand appropriate wages. The idea that people in specialty industries are underpaid can be answered rather easily, if one were to look at the prevailing wage for a rigger or sweep tech in the communications field.
I think you need to refresh yourself on what monopsony means because you've applied the word entirely incorrectly.
You have yet to provide any evidence of what creates your wage basis to be able to claim underpayment. Here's a hint: a wage basis for a particular field changes daily. That's why most individuals and employers go for an averaging of wage levels in order to define the 'going rate'.
There is no wage productivity gap, given the above statement. If you are trying to redefine the infamous 'income inequality' in the same basis as your 'underpayment of wages', they are not equal and never shall be.
You're not saying anything. I merely said that the empirical evidence took into account human capital and compensating differentials. Its a direct measure of underpayment that takes into account supply and demand consideration.
Sounds like you don't understand human capital. That is the orthodox analysis used to understand supply and demand (with human capital determining productivity and therefore labour demand).
Sorry, but this is ignorant. Traditional monopsony is based on one buyer. The same effect, with an upward sloping labour supply, is delivered through job search frictions. You haven't understood basic labour economics. I have no problem with that. We all have limits on our time. However, you need to understand your ignorance of these issues. That will allow you to construct more realistic comment.
I've gone further. I've referred to orthodox economics predicting it to the norm and referred to how you can measure it. If you need to catch up on the basics try this standard article: https://discovery.ucl.ac.uk/id/eprint/15468/1/15468.pdf
That you don't know about the wage-productivity gap shows that you are indeed speaking only from ignorance. As I said, you can put that right. Try looking up the concept and perhaps refer to an understanding that fits your agenda? Simply ignoring empirical reality really wan't wash!
I work with 'human capital' on a daily basis. I work with labor markets on a daily basis. I work with several economic levels of 'human capital' on a daily basis.
You aren't active in the actual labor markets, do not know how to apply the 'human capital' that is available in the appropriate manner according the best abilities, and you haven't proven a blessed thing according to your 'empirical evidence'.
Go out of your cubical and experience what the real working world is, what level of wage separation is currently in play in the markets, and discover what the metrics are for each industry, what is actually offered in the way of incentives to each level of the labor market based on needs/wants, and then perhaps a discussion can be had.
You may crank numbers for a living, but your knowledge (based on the words you use) show that you have no first-hand experience to understand the implications of the individual assets and how they can be applied in a particular industry. You being in the UK, all your 'evidence' may be applicable there, but it isn't here.
Silly comment, given human capital just refers to anything that increase productivity.
Rather than big yourself up, focus more on content?
This says naff all! First, human capital is just a reference to how orthodox economics understands both wage efficiency and equity. Second, that you don't understand any empirical evidence into the labour market just advertises your knowledge deficiency.
Bluster! You're the one ignoring the real world. You clearly do not understand human capital and therefore the basics of supply and demand. You clearly do not understand how labour economists have measured inefficiency created through underpayment. There's no excuse either as you're replying to a comment that gave you specific reference to monopsony.
This is empty whine. If you want to dismiss supply and demand theory then go ahead. If you want to dismiss the application of supply and demand to the wage equation then go ahead. Simply ignoring the supply and demand evidence, and pretending otherwise, is just a little cretinous!
Perhaps you'd like to make a rebuttal with that statement above. Try explaining what YOU THINK is a "rsponse".
This is after all a DEBATE forum. Not a Message Board ...
No doubt your explanations have a bearing on "employment".
But what I am getting at is the far more profound fact that the entire economy is changing ages. American industry now accounts for only 12% of the total active labor force.
Moreover, services are now the prevailing economic sector, and in that sector there are both McDonald's Dishwashers and Investment Firm analysts. The income and intelligence gamut is thus very large. (And of these two, the latter has most certainly a far higher salary than the former.)
We as a nation are, since the advent of the Internet, entering into the Information Age (and exiting the Industrial Age). The skills necessary are of a much larger magnitude. Yes, we still need street-sweepers and shelf-stuffers (at Walmart) - but the emphasis today is upon a higher level of professional career that ONLY a postgraduate degree can allow.
Which is why such tertiary-level degrees should be free, gratis and for nothing* - as they are for secondary-level schools. The fees should provided by the Federal government across the nation - and for any attendance at a state-school.
Meaning this: Instead of categorizing work (as you do in your comment), we must review the NEEDS of today with a much broader and thoughtful aspect. Namely very low fees for post-secondary level education at state-schools of higher-learning ...
*As they are in Europe, whereas in the US any state-school post-secondary program costs an average of $14K a year tuition-alone. Meaning effectively that the most poor are shut-out of any such educational program - the Poverty Threshold being just $24K/year of income. (And these "most poof" are 38 million in the US - that is, a significant 10% of the population.)
This IS an economics forum.
And I can aggregate my debate response to a national level if I care to do so. And I do, because that is where most of the key data are found. It is the factual evidence that is key in any debate of complex matters.
Besides, I teach the subject and I know very well where the information lies ...
A decent average salary for the USA would get you a nice car, to sleep in, in Manhattan.
Which is why Income Disparity is the real problem facing America today..
And not the destitution of Donald Dork, who should never have been elected. Because Americans thought he "turned on" the economy, when the economy actually started mending in the middle of Obama's second administration. And DD simply took advantage of it, so he can now tell the world that "rebuilding the American economy was all his work".
The US has the worst Income Inequality of any developed nation. See here.
Well, that's infantile.
I do hope that you are not really a teacher.
Yeah, but the parking garage don't come cheap, and it's a mite dangerous sleeping in a car on the street (if you can find a space). Plus you gotta eat, find water and a privy, and find a place to bathe once in awhile. Everything gonna cost you more in NY. It ain't gonna be like Wall Drug in South Dakota where they give you free water with a friendly greeting and a smile and tell you where to get free car camping at the National Grasslands nearby.
So just don't go to NY, unless you crazy, or been there all your life and have been taught how to survive by your elders.
In LA, San Franshetco, or Seattle you can drop your drawers right on the street and nobody will arrest you or think badly of you. It's just natural organic echo out in the open.
I'm not 'bigging myself up', I am giving you insight to what I do, and my knowledge and experience in dealing with labor, labor markets, and 'human capital'.
the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.
See above. Human capital, human assets are people. As employees they are an asset to the company under the right conditions, such as maximum pay for maximum return (production). It might support your argument to actually know what the terms mean.
ECONOMICS a market situation in which there is only one buyer.
Something tells me you aren't involved in the day to day activities of the labor markets, supply and demand, and the supply and demand IN the labor markets. Perhaps in the UK you have only one buyer for your product since the government controls a great deal there, things are wee bit different in the US.
Simple question: Why should other people pay for a advanced or teriary degree when it is for the monetary and social benefit of the receiver?
Ask that same question as regards Kindergarten, or Secondary Schooling.
You will find in the answers that EDUCATION up to a Tertiary-level of schooling is basic to the vitality of any real economy.
Except evidently for some who prefer to remain stoopid and incompetent - in which case they deserve the negative financial consequences ...
Yes, and employing it tends to induce the same response from those who do not believe that he is a sick man possessed by a well-diagnosed case of narcissism.
Just ask for the on-line source of such an accusation and I shall put it up for your edification ...
I find it amusing when people think they can understand economics via a dictionary
I've already defined human capital. It is anything which increases productivity. From that it is easy to critique the value of labour market flexibility. Take Britain. This is an excellent case study as Thatcherism stripped away most labour rights. What was the consequence? A shift to a low skilled equilibrium, characterised by low wage and low productivity. And what happens in countries where there isnt this market fundamentalism? See, for example, Germany's collective bargaining. You get high wage, high productivity relationship. Essentially human capital becomes an endogenous concept.
Now someone free of 'economics by dictionary' would also know that, to understand labour market outcome, we also need to factor in concepts such as social capital and cultural capital. The result? We aren't just talking about underpayment. We are also talking about inequalities in opportunity. Thus, inefficient wage distributions will naturally go hand in hand with class divides.
This neatly advertises the dangers of 'economics by dictionary'. Monospony analysis has long since recognised that the inefficiency isn't reliant on the assumption of the 'company town'. All we need to derive monopsony outcomes is for the firm to have wage making power (i.e. an upward sloping labour supply). Traditional monopsony derives that outcome by making no distinction between the firm and the market. The law of supply holds. Dynamic monopsony, in contrast, derives it by recognising job search frictions. Alternative approaches derive it by modelling worker differences (e.g. analysis that includes the impact of transportation costs).
Right wingers tend to be so so arrogant about supply and demand. They seem to think they can just crow "it's the law of supply and demand, so it is". The truth is that arrogance is really just the consequence of an innate ignorance of economics. Still funny though!
Basic education is for the betterment of society, but that is not the question I asked, is it. Above that, it becomes for the benefit of the receiver.
Not all people are geared for four years (or more) at University. I guess if you want to call them 'stoopid and incompetent' then perhaps you want to reconsider what use you have made of your own education, eh?
Separate names with a comma.