As great as seeing workers get better wages and working conditions would be, I observe that Amazon and other companies (let's just call them "employers") simply have the upper hand in having a surplus of global labor wanting to work for the wages and conditions offered. (see the other story about "what happened in 1971" and the general stagnation of wages for the last few decades)
It's not like Amazon or others are forcing workers to take these jobs. This is voluntary, inevitable, equilibrium supply and demand of labor -- where willing labor is in great surplus lately compared to what was a previously stable pool of middle class jobs seeking employable bodies, leading to a very weak bargaining position. The floodgates of global labor competition were opened with a lot of underdeveloped countries' peoples willing to take up jobs at low (but high for them) pay, and that has rippled through every developed country's labor economy.
Until there is a relative shortage of willing workers, the situation will not change hugely I fear. (Aside from pockets of shortage due to education, credentials, monopolies of labor, other barriers to entry, etc)
Unionisation and collective bargaining does achieve progress, as does regulation. Minimum wages are a great example of the latter. I'm not quite sure what is driving your passivity here.
Minimum wages are the very textbook definition of protecting some workers at the expense of other workers, are they not? They don't solve the underlying problem.
And I don't know where you come up with the notion of passive, I'm just stating an observation.
> Minimum wages are the very textbook definition of protecting some workers at the expense of other workers, are they not
I guess so, if you assume that the total salary envelope is fixed. In which case, minimum wages protect lower-paid workers at the expense of higher-paid workers. Which is fine in of itself.
But on top of that I think we have to assume that the salary envelope has some elasticity. Maybe minimum wage increases the total salary cost, and decreases returns on capital - so helping lower-paid workers at the expense of investors. Again, why not
> In which case, minimum wages protect lower-paid workers at the expense of higher-paid workers. Which is fine in of itself.
Um, no, actually the complete opposite. Minimum wage protects the workers who are able to get the job at the minimum wage, at the expense of those even lower-paid -- the ones who would've been employed if the wage had been less (and now are not employed).
This would be true if there were a direct line correlation between employment levels and minimum wage. There isn't. See Dube, lester, Reich.
Instead, profits take a hammering and some businesses get replaced by others with no overall reduction in employment.
If you analyze who lobbies for minimum wage hikes (labor groups) and who protests them (business) it ought to be plain as day who really gets hurt and who benefits from the narrative of "wed only hurt workers by paying them more".
In addition of assuming that minimum wage is directly correlated with unemployment, which it isn't, there's another hidden assumption here.
The hidden assumption is that lower-paid positions are less important. They aren't. There are many minimum wage positions that are more important than higher wage positions.
They're not lower paid because they're less important, they're lower paid because they're more replaceable.
So, when you force the employer to choose between not having a janitor, or paying 3.5$ more per hour, they will certainly decide to pay 3.5$ more per hour.
Assuming that there is profit, which is a good assumption as the average surplus value rate is of around 5-7%, then what will happen is that profit will decrease, and employment will stay more or less the same.
It's very important to realize that the market values replaceability, not importance.
The employer may have another choice: contract out that janitorial position to be shared across multiple companies or some other way to extract more efficiency from it.
Maybe they end up with 60-80% of the janitorial coverage that they had before.
But the janitors will still have their pay increase. It's not as if getting a contractor to do it actually decreases the amount of janitorial jobs, it actually increases them for the same amount of work. What it supposedly does is increase administrative efficiency.
I think these are two separate discussions. Indeed the floor effect of a minimum wage can have a negative impact on very low-value jobs, that's one of the issues to be managed.
One way is to try to orient your economy around more high-value jobs, with a generous safety net for those who can't reach it. It's a very difficult question
You mean those studies about Seattle airport employment zone and such small scale examples of raising the minimum wage? I don't think it applies in general, or it would be a big mistake to think that you could replicate that widely.
But maybe I'm mistaken. Maybe we don't send work offshore to lower cost countries to take advantage of wages lower than ours.
> Maybe we don't send work offshore to lower cost countries to take advantage of wages lower than ours.
Labor costs in the US are higher than in China, so this should and has happened anyway. You think it would happen to a larger degree and it could be correct. But it is a restricted perspective aside from the fact that not every work can just be outsourced to low wage countries.
> Maybe we don't send work offshore to lower cost countries to take advantage of wages lower than ours.
it's not like lowering the minimum wage would change this much - if the cost of living is an order of magnitude lower in a third-world country, the labour costs are going to be an order of magnitude lower too
Couldn't tell you. Never heard of that study. It sounds like one study among so many that all indicate the same.
Maybe we don't send work offshore to lower cost countries to take advantage of wages lower than ours.
People DO send work offshore for that reason, and you know it. Why so childish? Why such pointless passive aggression? Why come out with that kind of nonsense bullshit? Grow up and have an adult conversation.
I am, and I guess I need to spell out the point more explicitly. The point was that raising the minimum wage demonstrably affects employment by the fact that we every day choose to send work overseas instead of using people here at home at higher wages.
So the notion that raising minimum wages doesn't affect employment just doesn't hold water unless you study it in a very isolated environment, where the effects of it get washed out by the larger absorptive capacity of the broader labor market.
The point was that raising the minimum wage demonstrably affects employment by the fact that we every day choose to send work overseas instead of using people here at home at higher wages.
You're going to have to work a lot harder to prove that those two facts are related than just saying them.
Perhaps you mean that the very lowest paid jobs are those that are outsourced? Are you talking about very low-wage factory jobs, such that people in China may be paid a few dollars an hour where the same in the US would be many dollars an hour? Or are you talking about IT outsourcing, which happens at values much higher than minimum wage?
If I have to guess your arguments and make them for you, then I don't really need you in this conversation at all, I suppose.
You have not actually demonstrated this though. No evidence you provide won't be just as good of evidence for alternative causes of sending work overseas, like cost of living.
Northern Europe haven't had significantly more unemployment even though the labour costs and regulations are much better than in the US. How would you explain that?
That is false. Example: unemployment rate of youth in Spain for 2019 was 32.9%, the rate for same period in US was around 9%. Similar situation in other Northern Europe countries, with high unemployment rate especially among youth, as they are the most vulnerable to minimum wage laws which limit their ability to acquire skills and experience needed to move to higher paying jobs.
No. I never said anything about Spain and southern europe.
Overall unemployment isn't worse historically. Not sure why you cherry-pick youth as if it invalidates the overall stat somehow. But even that stat isn't worse historically.
That is hard to measure. However, it is fairly easy to measure another likely drawback of minimum wage: acting as an anchor (or even an opposite magnet) on salary growth.
> Minimum wage protects the workers who are able to get the job at the minimum wage, at the expense of those even lower-paid -- the ones who would've been employed if the wage had been less (and now are not employed).
What's the point in working if you're going to be paid in breadcrumbs?
Do we really want to race towards another Dickensian society?
> What's the point in working if you're going to be paid in breadcrumbs?
Being able to eat. "Breadcrumbs" for you or me might not be worth it, but for someone else it could be the difference between buying food that the supermarket or stealing ketchup packets from a fast food store.
People on the federal minimum wage are already struggling very hard to make ends meet. What makes you think that they'll be able to afford food on an even lower wage?
People were able to afford food in 1950, when wages were lower and poverty was rampant.
I recommend rereading “The Grapes of Wrath”, to get a taste of what poverty in this country had actually looked like, and what it actually was like to not be able to afford food. Then compare that with what currently passes as “poverty”: you get much more than that already on SNAP benefits.
I am very sympathetic to people in poverty, having grown up in it. However, let’s not pretend that poverty in today’s America is about “affording food”: everyone, no matter how poor, is able to afford food, and poverty today is less about the hunger, and more about the lifestyle you can or are forced to carry out.
But on top of that I think we have to assume that the salary envelope has some elasticity.
I suspect but cannot prove; a lot of elasticity. Those graphs showing productivity and wages decoupling; all that wealth is going somewhere. It's going to rich people. As you suggest, we could "just" (ha!) change where it goes; instead of to rich people, to workers.
You would change where some of it goes. You also force companies to either not employ some people or to employ them on a basis that loses the company money every week.
Imagine someone today capable of creating $1 of variable gross profit for their employer every 5 minutes before they were paid. Under a free labor market or a $10/hour minimum wage, that employee has stable and good employment prospects. Make the minimum wage $15/hour and change nothing else and that employee is on shakier ground. Either they must hope that their employer doesn’t know their individual productivity (likely somewhat true), that there is so much money being generated elsewhere that the company doesn’t care if they lose some here, that their job is practically required structurally (no one will close their shop from 10-12 and 2-4 just because the foot traffic drops off and those hours lose some money), or that their employer feels charitable but wants to dress that charity up in work clothes.
Total wages have some elasticity. I have to believe it’s not generally beyond what is advantageous to the employer and their customers (who are paying all the wages ultimately).
Apple is making $435,000 profit per employee. There is clearly some slack there. Under your arguments, shouldn't that profit per employee be significantly smaller?
If Apple had a clear path to make even more money by expanding and employing more people, I think they would. As it stands, they’ve got expansion opportunities fairly risk-free by having millions of devs 30% working for them, so that might be their focus.
I’m not saying companies will invest right up to break even, but that they will attempt to avoid going beyond that point.
A minimum wage as currently practiced redistributes money from capital owners to labor.
If you assume that the market clearing price for non-minimum wage labor is set, as all market prices are set, by the interaction of a supply and demand curve, then it becomes clearer that there’s no mechanism by which the redistribution from one worker to another would happen.
With enough free trade agreements without statues for worker protections, you can forget unionization to a large degree.
And the mechanism to break them are easily available. Just insert special interests for local conditions or identity politics like race or gender and the union is as good as busted, you don't need to do much. Unions need unity and that won't stand for 10 minutes in todays world. Current civil liberty movements were often driven apart by this.
You still need to be competitive because someone needs to be able to pay the minimum wage. If there is a discrepancy in wealth between countries, you need either taxes or let the worker class fall down to some international level for cheapest labor.
This seems like baseless conjecture, unless you have an example of a union (literally any union in history) being busted by "identity politics".
Where I am from (the UK) unions are relatively commonplace, I have even been in one in the past (the university and colleges union), they seem like very stable organisation to me. I've never even heard of a union closing in the UK, although I guess it happens occasionally.
They have been slowly dying. They resist in the public sector (like the one you joined), in manufacturing (a shrinking sector in itself), and in call-centres. Everywhere else, they don’t really have a meaningful presence anymore. Part of the reason is the atomization of work in smaller and smaller companies, and temp-agencies being normalized; traditional union practices and laws struggle to fit these conditions. This is absolutely on purpose and effectively government-encouraged since the Thatcher years.
> I’ve never even heard of a union closing
They don’t “close”, they merge when membership falls below sustainable levels. You can look at the statistics on union membership to see the actual story.
I agree with everything you wrote here, when I wrote "relatively common", I meant relative to the USA. I didn't mean to imply this was the golden age of union membership in the UK at all.
It was an example for a union needing unity on issues it wants to improve.
A tactic of union busters is to seed such strive and there are countless approaches to that. For example, if a group A forms a union against working conditions at X, X makes concessions to a subset A' of A by highlighting arbitrary differences. This can result in conflict between A and A'. If A and A' cannot reconciliate, X wins. The standard divide and conquer tactic.
You can pick your example yourself, but race, sex, age, nationality, religion are prime examples of arbitrary differences not relevant to the topic or goals that brought a group together in the first place.
We evaluate public political discourse differently and I am not saying I am correct about it, but I do think that "identity politics" has caused massive rifts between political camps formerly working together.
I don't have or want to produce formal evidence because it would just be counterproductive against my political position, but I think the picture is more clear than blurry.
Of course, I agree in principle at someone could try to use "identity politics" to try to break up a union. I think in my country all or most of the arbitrary differences you list are "protected classes" and a company seeking to bust a union with such a method would find get in legal hot water pretty fast.
I have no idea how producing formal evidence can ever be counterproductive to your political position. That statement does not make sense to me.
The would not discriminate a protected class, they would elevate one above the other to create the strive, it is irrelevant which one, in most cases the focus would be the smaller one.
The rest of the group would feel put aside and would direct their anger towards the preferred group. That is a basic "flaw" in human psychology. Being called names by a friend hurts more than from a bystander and the same effect is abused here to direct anger from the former target to your own group.
> I have no idea how producing formal evidence can ever be counterproductive to your political position.
I presented it as I see it. I think unions can be very important and it is in my interest that people don't mangle themselves on superficial differences. That happens a lot lately. I am no tycoon to likes union busting.
What happens as industries reduce is that multiple unions which are becoming smaller merge together. This is very different to what the guy was writing above about unions fragmenting due to political differences.
History disagrees. If you look at the paid leave in France in 1936, and look at the various direct and indirect advantages (salaries + paid leave +...) obtained between 1920 and 1940, you’ll notice that the huge strikes of 1936 to obtain paid leave played almost no role in obtaining this perk. And a lot of companies had started doing so 1 to 5 years earlier, and it was developing at the same time in other countries which didn’t have strikes.
Salaries and indirect salaries are a direct consequence of the context.
Puzzled by this. France is exactly the country most people would think of an an example of the effectiveness of collective bargaining and unionisation for shorter working hours and better working conditions (and maybe the Nordics too).
Check out the hours worked per worker, for one. Working hours per year are a lot shorter and French people enjoy much greater leisure time and quality of life as a consequence.
And are « poorer » than in US. It’s only recently that French people started enjoying frequent worldwide travels, whereas it has been affordable for Americans for several decades. We also have smaller houses (90sqm in average vs 140sqm in USA, but also our interiors are generally less renovated, and anyone with a kitchen that would be average in USA, looks like an aristocrat here). It is quasi-impossible to be paid 140k$ in France. We get less money for less work, it is entirely proportional, the difference is, it was collectively bargained.
> It is quasi-impossible to be paid 140k$ in France.
It is also essentially impossible to be paid less than ≈$22k (minimum wage of 18 473 € annually [1] at current exchange rates). Collective bargaining helps those who'd have a hard time bargaining individually, not top earners for whom frequent international travel appears perfectly affordable. (40% of Americans have never left the country, apparently. [2])
It is absolutely possible to be not paid at all. The minimum wage law mandates salary ~$22k, but the real minimum wage is always zero. Many businesses will decide to hire less instead of hiring employees for higher rates than free market could propose. Hence the differences in unemployment levels among youth especially: ~20% in France, ~9% in US.
I have a friend who lives in Paris as a hotel worker. He was able to take two weeks off to visit his girlfriend in NYC and enjoy his time here. It wasn’t a huge event he had to save up for.
Correct me if I’m wrong, but I believe there is no universe where an American worker could do the reverse (fly to Paris for two weeks to enjoy themselves, without needing to plan it for years).
The point is, the basement standard of life in France is not close to the basement standards of the US.
The issue is your friend might have 45 days of vacations but perhaps not enough funds to spend in vacation. In France high skill jobs pay 35k. Also, your friend is one of those lucky ones having a job: these nice policies typically come at a cost to others, in this case a high unemployment rate and a dual job market protecting those in the system.
These are well known features of a rigid unionized labor laws.
The less fortunate in the USA are poorer than less fortunate in France. There is no weeks of holiday, there is no 1 year of parental leave, and much higher job stability in the US. Many might have a higher nominal income in the US, but the floor is much higher in France.
Choosing leisure over a larger McMansion isn't being "poorer".
What is the point of having an advanced economy if you don't use it to make people's lives easier, fix poverty, and provide decent public services and pleasant public spaces?
Most Americans have health insurance. Of the ones that don’t:
1/3 are illegal immigrants. Those folks would be excluded from the universal healthcare system of nearly every EU country. France and Spain are the exceptions, but France is under a lot of pressure to scrap that.
1/3 are eligible for Medicaid but haven’t signed up.
1/3 can afford Obamacare premiums but choose not to buy insurance. The Obamacare premiums are capped at 9.5% of income. That’s about the same as the employee-side healthcare tax would be in France or other countries with universal healthcare.
Migrants are not excluded from healthcare in most EU countries. They are on special schemes, A.M.E. in France. In fact, as an Australian resident I came back to a French hospital (after expiry of my SSN / a consultation is cheaper in France), and after seeing the doctor, they said they couldn’t establish the bill without current SSN and would have to... call me back. I’m the kind of guy who really wants to pay (It was just 120€, on an Australian salary), so I did give them my real name, email, phone, but the scene was surreal. “I want to pay you. Here is money to pay France, please take it.” —“No”
As I said, France and Spain are the two exceptions. In the U.K., for example, illegal immigrants can access the NHS only for urgent care, similar to the situation for hospitals in the US.
Yes, but vastly different. Universal health care certainly won't come with a dozen pages of fine-print. It doesn't have pricing levels either. You won't hear: "Oh, you should've chosen our premium plan for that!".
That's true. The tradeoffs are different. There will be procedures you can't readily get, and more complexity in getting others. Some of those are procedures you shouldn't be getting in the first place. You'll have far less control over your own care, but most people weren't taking advantage of that control in the first place.
I guess I misunderstood you? Because that's what I'm saying. That it would require substantial wealth to be able to have significant control over your own care.
Workers pay for the medicare in Europe, it's a collective (and compulsory) insurance. You also have to work to qualify in most of the countries (unless you're disabled etc). In America you often talk about the mysterious billionaires that shall pay it (Sanders etc) but in reality is that in these so called model countries its literally a workers tax paid by employees.
I wonder if this isn't a question of who bears the responsibility. For example, in the US you make more money but are expected to save, and make sure you have something to fall on in case of difficult times. In France, you expect the state to take care of you in such a situation. Spoiler alert: depending on the state is not a good situation.
Some people may therefore prefer to be able to spend all they've got without having to think of hard times. Because they may think "it won't happen to me" / "I'll save tomorrow".
As such, I would be very curious to see some actual numbers to be able to do as objective a comparison as possible. Because indeed, if in the US the prices are overall higher relative to the wages, the deal might not be as good in a bad situation. From France, this doesn't seem to be the case, mostly because (outside of SF) pretty much everything looks cheaper. Housing, food, entertainment, cars / gas, electronics, etc. The only issue seems to be related to healthcare. So I'd like to have that actually quantified.
The issue in France is that in addition to the fact that "having a 140k salary is impossible", taxation is very, very high.
If an employer pays 100k in total for an employee, the actual, cash in hand, after income, social security and medical insurance (1) for the employee is around 55-60k. Once said employee has his 60k in hand, practically everything has a 20% VAT [2]. Oh, and since this is France, you also have taxes on taxes. For example, VAT is levied on some taxes related to electricity.
So out of a 100k USD total paid by the company, how much would a US employee have in hand after tax?
I've also noticed that for similar positions in the US (outside of SV) a software engineer can expect twice the salary compared to Paris. And mind, Paris is very expensive for the basics (food and housing).
It would be interesting to see how this compares to professions other than IT. In France, you're mostly barely above minimum wage for blue collar jobs. And minimum wage is nation-wide, the same in Paris and in some village in the middle of nowhere.
[1] Only "basic" health care is actually "free". If you need anything more "advanced", such as dental work or glasses, you better have a "mutuelle", which is basically private insurance. This is usually provided by the employer, but what is actually covered varies.
[2] Food, "necessities" and some other items have a lower VAT, 5.5% I think. There's also a 10% VAT for restaurants in some cases.
In France like in other countries like, e.g., the UK, what played the most important role is that people simply voted for a left-leaning government that enacted these laws.
The lowering of working hours and new paid leaves in 1936 where enacted by the newly elected left-wing government. The lowering of working hours to 35h per week in France was also voted by a left-leaning government.
Healthcare systems in France and the UK were also setup by left-leaning governments.
Collective action may work within a single company but if your after general social measures then the action is to be taken at the polling station.
In France unions in private companies are very weak these days, and overall the protections and rights of employees are extensive so people no longer have strong needs for this, anyway.
The key point is that in a democratic country things happen if the majority wants it and votes accordingly.
Norway effectively does as union collective agreements apply to everyone, Sweden again uses collective bargaining, Finland again covers effectively every employee with collective bargaining. Germany does have a minimum wage as of 2015 so that’s just wrong. I’m not going to fact check the others but I imagine it’s a similar situation. It’s not like these countries are lawless and allow rampant employee exploitation.
Several Swiss cantons have minimum wage (Geneva starting from this month for instance). Also collective bargaining is pretty common as well (e,g, in the watch industry).
Sweden does have minimum wages, negotiated by their unions. Basically everyone is a part of them, so it makes sense for them to negotiate the wages instead of the government. Effectively there is no difference though.
There are people working for very little, but it is very rare. For example you make at least $15 an hour at McDonalds in Sweden since that is what the union agreement is for that sector. McDonalds isn't forced to sign it, but if they do they are protected against strikes. However you can have a small company without union agreement and pay whatever you like, but if your employees are in a union they might use it to start a strike action if your conditions are too bad.
Note that in Sweden unions aren't company specific so there is no way to prevent people from joining one.
Sometimes it's not about what the law says, but about what society does. In practice, these are the minimum wages. Perhaps you can diverge from them for a while without punishment, but that doesn't make them not the minimum wages. It just means that the enforcement is different.
Arguing about the legality is a harmful modern fetish that especially in contexts such as these does not help us move along.
This argument only makes sense if you are not ideological about minimum wage laws. Which most people are. This whole thing does not stem from the desire to help others but from the strict ideological position that any regulation that _seems_ to favor the worker must indeed favor the worker.
There is a reason Europe moved past min-wage laws, but Americans seem to be hell bent on not listening. Like most children, they have to make the same mistake on their own in order to learn from the consequences. I have personally given up on trying to reason with people about this.
"Employers" as a group have the upper hand currently, but only because they were willing to kill to get it. Union busting up to and including a bunch of murders got us where we are now. In a democratic system with one vote per person, workers would have much more power than employers.
It's voluntary on some level sure, but it's also true that in any single 'negotiation', Amazon has an enormous advantage by virtue of size.
Corporations bargain collectively automatically, because they're already collectives. This is especially true in the case of enormous corporations with many thousands of employees.
When someone is getting hired by Amazon, it's literally a million versus one. That's a lot of leverage to bring to a negotiation, so it makes sense that a union would be necessary to even the odds for unskilled labor.
One of the greatest PR successes of the modern era has been the effort to convince the masses that an unacceptable relationship between labor and the owners of capital is inevitable.
It is not. As should be no surprise to anyone with a knowledge of history the inherent tension between these two groups has formed the basis for nearly all political competition.
When confronted with an example of that conflict persisting, such as today’s labor action described in the article, it’s not particularly good analysis to assume away the basic premise of what’s happening in step one.
What happens when an owner of capital manufacturers a product in a country where people are willing to earn 5% of an American salary, and then sells it in America for 50% of the cost that an owner of capital who chose to manufacture in America?
The root cause is consumers will purchase from the sellers that offers the lowest price, and so the sellers that drives down labor costs to offer the lowest price will survive.
The same thing that happens with any action that people take in their own narrow self interest that society deems detrimental. The society, in the form of its government, regulates it.
People will also show up and harvest your crops and sell your daughters into slavery without government intervention. The fact that a lot of people want to do something and will do so without the government stopping them doesn’t prove the inevitability of that thing happening.
That isn’t part of the relationship between an owner of capital and labor. And good luck getting votes by pushing a policy that will cause prices to rise causing people to be able to purchase less (even if it is in most voters’ long term interests). Voters will focus on the fact that they need to reduce consumption in the immediate future.
It's not like Amazon or others are forcing workers to take these jobs. This is voluntary, inevitable, equilibrium supply and demand of labor -- where willing labor is in great surplus lately compared to what was a previously stable pool of middle class jobs seeking employable bodies, leading to a very weak bargaining position. The floodgates of global labor competition were opened with a lot of underdeveloped countries' peoples willing to take up jobs at low (but high for them) pay, and that has rippled through every developed country's labor economy.
Until there is a relative shortage of willing workers, the situation will not change hugely I fear. (Aside from pockets of shortage due to education, credentials, monopolies of labor, other barriers to entry, etc)