On price increases re. minimum wage increase

[jderimig]

When you destroy free market forces by subsidizing demand and punishing supply you get the mess we are barreling towards.

 

[boomtube-mk2]

On the topic of automation, one of the best options I've seen put forward is a federal tax on automation so companies are forced to pay for the retaining or long term unemployment costs of displaced workers.

I've read about "Productivity taxes" and the like to address the costs of displaced workers along with the idea that people can buy into automation much like they can buy stock in a company.

Federal mandates ensuring housing for low income folks should also be considered IMHO.

The problems with that idea are; 1: Housing for the low, low income people inevitably degenerates into something pretty squalid. 2: There are so many locals in so many cities these days where "Low income", with regards to local housing prices, is anything under six-figures.

 

[jderimig]

Automation doesn't displace workers. Government policies that increases the cost of labor displaces workers.

 

[Rocketjunkie]

Recent history has taught me that we need term limits. We need fresh blood in Washington.

Politicians and diapers need to be changed often - and for the same reasons.

On the flip side, automation make each employee more productive (output per employee), enabling companies to pay more per employee. Automation also requires more work in the design space, configuring and coding to develop the automated workflow.

More work for techs. I was the one who had to repair the robots when they failed. This was in addition to the failures of the die cast machine itself. Robots also did things an operator knew better such as keeping the trim die flash free. A robot just tries to put the part on and faults out, needing another trip into the cage to clear the jam. 2 robots did save 4 operator salaries as an operator could run 2 machines instead of 1.

 

[Dipstick]

When you destroy free market forces by subsidizing demand and punishing supply you get the mess we are barreling towards.

Haha, ain't that the truth. But it seems all we are barreling towards is another way to twist things around to make it all work again for a little while. The bailout bucket is magical!

 

[boatgeek]

On the flip side, automation make each employee more productive (output per employee), enabling companies to pay more per employee. Automation also requires more work in the design space, configuring and coding to develop the automated workflow.

Large employers won't pay employees more for more productivity unless the employment market or government requires it. Why would they? Their duty is to return value to shareholders, not to provide for social welfare. You saw that in the last few decades, where average wages for the lower tiers were stagnant, but executive pay increased because executives convinced their boards that they were worth it.

Where I get hacked off is when you have restaurants and/or retail paying managers with several years of experience a few bucks above minimum wage and then not paying them overtime because they're management.

 

[ep29030]

The problem here: we all love cheap products that come from those efficient, automated processes. Compound that with companies that can get it made for less by going to the ends of the earth.

 

[ThirstyBarbarian]

There’s been a lot of reporting in the last week or so about how many people are quitting their jobs and looking for better ones. Bargaining power has shifted to employees for now, and they are demanding better pay, better working conditions, and more flexibility. The pandemic really shook things up in ways we don’t even fully understand yet, and one thing that came out of it seems to be that workers have really reevaluated their jobs and what they should be able to expect from them.

Here’s one article everyone should be able to access, but there has been a lot on this lately. https://www.cnn.com/2021/10/12/economy/jolts-job-openings/index.html

 

[Kelly]

When I worked for minimum wage many years ago (fast food industry), looking around me, I didn't see anyone that was trying to support themselves, let alone a family, on that wage. It was all high-school or college/tradeschool students, people just trying to make a buck or two while they prepared to get a 'real' job. People who actually wanted to make a living at it were in the management track jobs. So, it's not at all obvious to me that ANY job - no matter how unskilled, no matter how menial - should pay enough to allow someone to support themselves. Jobs should pay what they're worth to the ones paying for them - not what the government sets the price at. Basic economics tells us that if the price for something is set above its market value, demand will drop. Artificially setting a wage above what the market will bear will just result in more unemployment.

 

[boatgeek]

When I worked for minimum wage many years ago (fast food industry), looking around me, I didn't see anyone that was trying to support themselves, let alone a family, on that wage. It was all high-school or college/tradeschool students, people just trying to make a buck or two while they prepared to get a 'real' job. People who actually wanted to make a living at it were in the management track jobs. So, it's not at all obvious to me that ANY job - no matter how unskilled, no matter how menial - should pay enough to allow someone to support themselves. Jobs should pay what they're worth to the ones paying for them - not what the government sets the price at. Basic economics tells us that if the price for something is set above its market value, demand will drop. Artificially setting a wage above what the market will bear will just result in more unemployment.

I think that one of the side effects of the college entrance arms race has been that a subset of high schoolers aren't doing minimum wage jobs in favor of more sports, activities, etc. that "look good on college apps." I don't know if there's an easy way to quantify that though.

 

[ThirstyBarbarian]

Here’s another article on the record number of people quitting their jobs to take better jobs or look for something different. Almost 3% of the nation’s workforce quit in August. That’s 4.3 million workers. There are 10.4 million job openings in the country.

https://www.washingtonpost.com/business/2021/10/12/jolts-workers-quitting-august-pandemic/

 

[NateB]

I don't know how many times I've heard people say "if they don't like the (pay, hours, conditions, etc...) they're free to find another job!!)

So they did.

And now the same folks who told them to find another job are shocked people left jobs where they are treated like crap and shocked they can't find more people who are willing to work for exploitation wages.

 

[ep29030]

Large employers won't pay employees more for more productivity unless the employment market or government requires it. Why would they? Their duty is to return value to shareholders, not to provide for social welfare. You saw that in the last few decades, where average wages for the lower tiers were stagnant, but executive pay increased because executives convinced their boards that they were worth it.

You mean, executives were able to get more by automating and shedding jobs? True. Part of the issue is the laser focus on shareholder value. When people punish companies that don't increase price per share to match or beat other firms in that space then they either compete or become part of another company that will compete. Of course, we create that when we insist on 10% annual growth in our mutual funds and stock portfolios in our retirement funds.

 

[ep29030]

I don't know how many times I've heard people say "if they don't like the (pay, hours, conditions, etc...) they're free to find another job!!)

So they did.

And now the same folks who told them to find another job are shocked people left jobs where they are treated like crap and shocked they can't find more people who are willing to work for exploitation wages.

Market forces are like making sausage-not pretty to watch, but the final product is good.

 

[ThirstyBarbarian]

I don't know how many times I've heard people say "if they don't like the (pay, hours, conditions, etc...) they're free to find another job!!)

So they did.

And now the same folks who told them to find another job are shocked people left jobs where they are treated like crap and shocked they can't find more people who are willing to work for exploitation wages.

I completely agree.

 

[jderimig]

Normally about 2% of labor quit their jobs per month. August rate was 2.9% so this is a modest increase. I am sure that government printed money of $300 per child per month independent of need has nothing to do with this....

 

[ThirstyBarbarian]

Normally about 2% of labor quit their jobs per month. August rate was 2.9% so this is a modest increase. I am sure that government printed money of $300 per child per month independent of need has nothing to do with this....

Going from 2% to 3% is a 50% increase in the number of people. It’s millions more people per month quitting their jobs to go to other jobs.

I don’t think the child tax credit has much to do with people changing jobs, but maybe it does. In which case, it sounds like another reason it’s a good thing. The articles described what is happening as workers quitting their current jobs and moving up to better jobs with better pay, better working conditions, and more flexibility, so if you are saying the child tax credit is enabling that to happen, it seems like a good thing to me.

 

[NateB]

I don’t think the child tax credit has much to do with people changing jobs, but maybe it does.

I can't imagine the child tax credit had any effect whatsoever on people leaving jobs. It isn't new, the monthly payments are only a replacement for the credit thst is available when you file your taxes. Unfortunately, I think some people are on for a rude awakening next Spring if they are expecting a larger refund and have been claiming this credit as monthly payments instead.

When I look at people leaving in my industry and where my wife works, it is all because of working conditions and how they are treated by employers and the public. Mandatory overtime gets old quick and makes it hard to have a life outside of work. My wife (911 dispatcher) is forced in to work 4 hours early or forced to stay 4 hours late once or twice a week during her 4 day rotation. Add to it how the public treats them day in and day out and people find other places to work, even if it is a pay cut.

 

[jderimig]

So government checks pumping into households has no affect at all at the margin of affecting peoples need to work?

I agree it may not be the real driver but we do not know if those that are quitting are upgrading or just dropping out. Do we?

 

[jderimig]

Also, since there are 10mil unfilled jobs don't we think we can stop with the stimulus and fed money printing by now? Maybe have real price discovery on debt and assets.

A hard rain is gonna fall. What's in your wallet?

 

[Banzai88]

Also, since there are 10mil unfilled jobs don't we think we can stop with the stimulus and fed money printing by now? Maybe have real price discovery on debt and assets.

A hard rain is gonna fall. What's in your wallet?

Hard rain for sure. Unless the FedReserve stops quantitative easing, uncontrollable hyperinflation and unimaginable devaluation will be a reality for the rest of our lives. Unfortunately, that threshold was passed several years ago. It'll be like the Weimar Republic all over again, taking wheelbarrow loads of cash to buy the rare loaf of bread. Won't matter a single bit that someone is making $15/hour when that money only has $3 effective purchasing power.....and gasoline, heat, and food become more necessary than cheap crap from China.

 

[PeterK]

McDonalds here in northern Michigan is offering $21/hour to start. Some fast food places are offering sign on bonuses and paid college tuition. Others are giving paychecks daily. Obviously food prices have really increased as a result. The problem is that these pay rates are higher than many of the local small manufacturing facilities. Total employment nightmare here as people jump jobs for more money.

 

[Back_at_it]

Automation doesn't displace workers. Government policies that increases the cost of labor displaces workers.

Agreed. Government polices that increase labor cost drives the demand for automation that ultimately displaces workers.

My company continues to get more and more requests from our clients on ways to cut labor. Some of the demand is that these companies simply can't find people to fill the positions. It's a sad day when you're offering $18+ and hour and can't get people to show up for an interview for an entry level warehouse position simply because people are being paid to stay home.

I'm also hearing across multiple industries that the plan is to staff only until they can automate the process. Another issue is that companies are hiring at these inflated wages and are planning to keep people until the increased "stay at home money" runs out and the job force starts to return to normal. Once that happens the plan is to do wage cuts or dump all of these people that were hired at the inflated rates.

When this happens you're going to have a lot of people that have gotten use to living on those inflated wages suddenly faced with the fact that they can't find another job at those rates.

 

[Back_at_it]

McDonalds here in northern Michigan is offering $21/hour to start. Some fast food places are offering sign on bonuses and paid college tuition. Others are giving paychecks daily. Obviously food prices have really increased as a result. The problem is that these pay rates are higher than many of the local small manufacturing facilities. Total employment nightmare here as people jump jobs for more money.

These rates are temporary. As soon as the free money to stay at home runs out people will be forced to return to work. At that point all of the $21 an hour people will be let go and replaced with workers at lower wages.

Problem is that the damage to small businesses will already be done.

 

[jderimig]

McDonalds here in northern Michigan is offering $21/hour to start. Some fast food places are offering sign on bonuses and paid college tuition. Others are giving paychecks daily. Obviously food prices have really increased as a result. The problem is that these pay rates are higher than many of the local small manufacturing facilities. Total employment nightmare here as people jump jobs for more money.

Need to get a few Haitians up there. Connect the dots.

 

[Bill S]

When this happens you're going to have a lot of people that have gotten use to living on those inflated wages suddenly faced with the fact that they can't find another job at those rates.

Yes, and I think we can all figure out what sort of govt they will be agitating for, and it isn't capitalism.

 

[Back_at_it]

Yes, and I think we can all figure out what sort of govt they will be agitating for, and it isn't capitalism.

You can only control a population though fear, threats and money. They have already succeeded with fear and they are pushing the threats.

Now it's time to get everyone dependent on the governments dime.

I think we know where to point the finger.

 

[Wally Ferrer]

When will we begin discussing a maximum wage? Why isn't there a proportional wage tied to how well or poorly the business does that applies to every employee? Or would it be considered a form of communism/socialism if everyone working to generate capitalist profits were to actually share in those profits rather than be exploited to squeeze as much work as possible out of someone for the least compensation possible? Why are we blaming those who are just trying to pay basic bills for wanting a wage increase? No individual really needs a billion dollars, let alone a hundred billion, especially if their full time employees need food stamps to survive. Balance is called for.

 

[boomtube-mk2]

Part of the problem we face is that America is built around a lot of really big cities. These really big cities came about in large part to provide for the needs of a labor force that worked at really big businesses and industries.
Chicago: Railroads.
Detroit: Auto Manufacturing.
Pittsburg: Steel.
It goes on and on and you wouldn't believe how many big cities in the U.S. are the result of various industries and business dedicated to one or another aspect of the U.S. Railroads.
Now the downside of this is that a huge percentage of America's workforce prior to WWII lived in boarding houses, or if they were married and had a family, a company owned "Shotgun shack" or the big city equivalent, a four-story walkup, in other words, they had a standard of living we today wouldn't put-up with these days.

Now for nearly a century one in four non-farm worker ware employed by one or the other RR and this doesn't even take into account all the additional people employed by the industries that provided materials and services for the RR's.
For nearly 100 years railroads were Big business" in America, nothing even came close. The in less than a decade those numbers fell to a point where RR's became background noise in the employment figures.
Now as it happened, WWII was raging at this time and a lot of displaced workers went overseas and a bunch of them never came back.
But when they did the auto-industry and commercial aviation industry was waiting to hire them in droves.


So here we are today with a bunch of really big cities and no really big businesses and industries to keep their populations employed in jobs that pay a living wage.
Instead we have thousands of little businesses and industries each going its separate way and a population of people that have come to understand that just staying employed is a full time job and people are getting worn-out from all the effort of staying employed.
I read somewhere that today's employee will switch careers multiple times not just jobs but careers with each new careers often requiring a totally new set of skills and knowledge.
This is like a professional basketball player playing a few years in the NBA and then being forced to go into Major League Baseball for a couple for years and then go play professional soccer then football then . . .
Now the companies out there seem to expect that the pool of people looking for jobs not only have work ex

 

[ThirstyBarbarian]

I don’t think the hiring problem is “free money to stay home”, because that has already ended. Some states ended it early. Having that money end hasn’t changed the hiring problem, and there’s no difference between the states that ended it early and those that ended it later.

Whenever a new jobs report comes out with surprising or unusual data, there are a lot of hot takes that are filtered through the biases of people making them. We don’t really know what is going on here, but it will be important to find out, and it’s going to take more data and research.

My own hot take is this is pandemic related. I think people have gone through a pretty traumatic time. There’s a lot of anxiety and depression, so maybe it’s a mental health crisis, and people are leaving their jobs over it. Maybe it has to do with people reevaluating their job in the context of how their employers and the public treated them during the pandemic. Maybe it has to do with lingering problems with things like school closures and childcare that pulled a lot of women out of the workforce. Maybe it has to do with people getting a taste of a BETTER life during the pandemic, with no commute, remote work, more time with family, and they decided to find a way to make it permanent. I don’t really know, but it will be important to find out.