Hindsight is 20/20. Most black swan events can be easily prevented, if only we could travel back in time to avoid stupid decisions.
1 Like
The reality of manufacturing yesterday, today, and tomorrow always has been, and always will be, to improve productivity. Make more stuff for less cost. Over and over and over again.
Which jobs do you think should pay less than median wage?
All of them, obviously, now that I have climbed out of the working class and into the investing class.
8 Likes
The better question is how should the productive output of labor and capital be allocated to labor and capital?
Seems the long forward trend, especially with automation and AI, is towards 100% to the latter.
Iâm innovating, referencing a future post in an earlier post.
About that labor:
Is this time travel?
2 Likes
What I think is not relevant. What is happening is. Manufacturing has broken all of the secondary unions and is now able to push wages down to âillegal immigrantâ wages. Until the wages come up, there will be a shortage of workers.
In my Condo here in Florida, the prices of condos climbed 50 percent in 3 years from 2020 to 2023. Since 2023 there have been few condo sales. The people selling lament that there are no buyers. The fact is, there are a lot of buyers. They just will only pay a 25 percent increase over 2020 prices. Which isnât bad. A 4 or 5 percent a year increase.
I mention this because people tend to ignore changed situations and then lament that there are no buyers, or no sellers.
Cheers
Qazulight
9 Likes
I can go back 20 years to a machine shop that hired all Ecuadorians to save money. When you pay people less, you also begin to brag that they are the best workers. Ironic that.
Which is, of course, zero increase in real dollars. However, a lot of people have gotten used to ever increasing real estate prices.
DB2
1 Like
Yes! All workers should make more than the median wage. Especially if they canât do math.
Mike
2 Likes
Half?
Hawkwin
Pendant
5 Likes
Pendant??
The median wage needs to be something a person can live on. If it isnât, thereâs really no point for the person to do the job. And the job is probably necessary, or it wouldnât exist (corporations are not charities; they donât make up jobs except maybe some VP positions for people that have no shot at President/CEO). In the USA, and much of the first world, that wage is expensive compared to -letâs say- Bangladesh. Or India. Or Vietnam.
2 Likes
Only half of them can! This is nearly as bad an answer given right here on MF about 20 or 25 years ago (ânobody should be paid less than median wage because itâs not a living wageâ).
Maybe. Maybe not. But would you still think that is the case if the very process of âallocatingâ caused BOTH the amount âallocatedâ to labor and the amount âallocatedâ to capital to decline?
As far as I can recall, statistics show that wages have generally been rising (especially in the 2000s) over time, do you have different information?
Letâs say the 10% (roughly) that work in manufacturing have their wages increased to above median. Which other 10% of workers do you thing should/would be pushed under median?
The condo market here in south FL is terrible for more reasons that just 2020 prices. The primary issues are fear of insurance premiums and fear of condo special assessments. Just last month a guy at the gym lamented that his condo levied a $38,000 special assessment, but they are allowing him to pay it over 3 years. Thatâs still over $1000 a month out of his budget that suddenly appeared. He says he expected things like a $3000 assessment to rebuild a wall on the eastern edge of the property, and a $1600 assessment when they repaved the parking lots, and even a $6000 assessment when they have to re-roof. But never in his wildest imagination did he plan for a $38,000 assessment.
When a property comes with the risk of sudden additional payments required, then the value of that property goes down. Nowadays, most buyers in the condo market prefer new condos (usually up to better code, and wonât need major maintenance for 10+ years) unless they can get a significant discount on an older condo. Hence, the paucity of buyers unless the price is lowered. The other thing about condos is that there is always a steady stream of them available at very negotiable prices - because when the owners die, the heirs often want to just âget rid of itâ and split the money quickly.
This is EXACTLY the case regarding condos here.
The minimum wage needs to be something a business can earn something on. If it isnât thereâs really no point for that business and job to exist.
You canât repeal gravity, and you canât repeal the laws of economics.
Also, by definition, the median wage is something a person can live on ⌠because THEY ARE living on it.
3 Likes
Not necessarily true. Many times they are falling further and further behind.
You are correct that a company needs to make a profit, or they cease to exist. The median wage needs to be something someone can live on. If those two conditions arenât met, there will be problems. The company will move manufacturing overseas and/or automate. Thatâs also a law of economics: reduce costs.
3 Likes
Then we are seeing a market failure, as legions of âJCsâ cry âno-one wanna workâ at what they are willing to pay. So a compliant government uses qualifications for government assistance programs to force people to take âjobsâ that donât pay enough to live on.
Steve
3 Likes
That sounds very theoretical.
How about the data?
Do you remember the below chart?
Which law(s) of economics explain this chart?
It tells a story about how economic benefits are distributed between labor and capital.
2 Likes
By definition, the median is the value where 50% are above that and 50% are below that. So why would you choose an income level where half the people couldnât live on. Why not set it to a value where 40% werenât making that muchâŚor 60%?
The entire premise seems odd. Is every job suppose to support a familyâŚor a single person. Is there no such thing as a starter job? Obviously not since high school kids used to get jobs to obtain some spending money, now those McJobs are held by adults in a career making burgers.
Mike
1 Like
I interpreted the bold comment as:
median wage > living wage
not
median wage = living wage
I think we would all agree (I would hope) that aspiring to have most people earn a living wage is a good thing.
How to achieve that is another discussion.
5 Likes
I donât understand what you mean by this statement. Are you saying that HALF the people can earn a wage that they canât live on? (because half the people earn below median wage) Or even if there is a large cluster of 50% of the people around both sides of the median, that a quarter of the people can earn a wage that they canât live on?
I was thinking âbaby stepsâ. If the median wage isnât enough, then more than half the people arenât getting by. Ideally, maybe only the bottom quartile (?) may not be able to support a family. The kinds of jobs kids get in high school. I donât know all the numbers. However, if a woman has to work two jobs just to make rent and feed her kids, something is not right. Sheâs not freeloading. Sheâs also not getting an opportunity to better herself because she has to sleep sometime (and probably couldnât afford more education anyway).
YeahâŚa more succinct way of saying it.
2 Likes
Labor has been given better tools (capital) and more is produced per time span.
DB2
The likes of Bernie has never created even a single job.
Small businesses will not give a high min wage and take a loss. They will shut down or automate or hire illegals.
Socialists policies hurt the poor.
1 Like