
Why Can’t Americans Get a Raise? - drewrv
http://www.slate.com/articles/business/moneybox/2017/07/why_can_t_americans_get_a_raise.html
======
LMYahooTFY
A large factor of the answer to this problem is in the second paragraph and
the author glosses right over it:

"This state of things has left analysts stumped. For nearly a decade, the
Federal Reserve has kept interest rates at extraordinarily low levels in order
to initiate growth and rising demand, inflation, and ultimately higher wages.
But the higher wages have been stubbornly slow to materialize."

Interest rates have been dropped into the ground, and it hasn't increased
investment(growth). We have the highest savings in the history of capitalism
and the lowest level of investment.

This is the wheel of capitalism literally coming to a halt because the
oligarchs are staring each other down waiting for someone to go first.

And I think there is a lot to be said about Wall Street leaching most of the
investors' money because it promises better returns than actual investment
into actual things with utility.

Wall Street is 'supposed' to be the mechanism for recycling profits into
investments so that this wheel keeps spinning. Does anyone honestly still
believe it's functional?

~~~
NTDF9
The solution to this is plain and simple wealth-tax that can only be avoided
if their investment creates X% jobs.

There are corner cases to it but the underlying reasoning is, if your
investment is just lying around accruing wealth, it's bullshit wealth.

~~~
harryh
So if I invest money into a manufacturing process and build an automated
factory that can do with 100 people what used to take 500 people, and then I
therefore lower costs to all the people buying things from me...that's now
bad? And I get to pay an extra special wealth tax for my trouble?

LOL

~~~
unclebucknasty
In some ways, yes, it actually is bad. Depends on your perspective.

As a very simple example, imagine that you were able to fully automate, such
that you required zero workers. Imagine further that all other businesses did
the same.

~~~
harryh
If literally all imaginable human work was 100% automated then the cost of
goods and services compared to today would be tiny. The poorest member of that
society would live like a king from our present day world.

~~~
codexon
The problem is, the plebians would not be able to get a job to pay for the
goods/services no matter how cheap they may become.

If you had robots making everything you could possibly want, why would you
bother selling any of it to people who don't have any land, natural resources,
or rare skills? They wouldn't have anything you want.

~~~
adrianN
Why bother selling it at all? You could just give away the things for free.
The marginal cost of an item is just the energy needed to produce it. With
robots building solar panels or something like that, those costs are
negligible.

~~~
codexon
Because it still takes effort to give things away for free and as a robot
owner, natural resources, land, rare skills can't be automated away.

~~~
Chris2048
Effort is a human skill, which the premise states is already automated. As are
rare skills.

~~~
codexon
If you can even automate giving things away without worrying about people
hacking/stealing/vandalizing your robots, then wouldn't it also be likely for
you to spend all your resources on combat robots to take resources/land from
other robot owners instead of wasting them on people that aren't giving you
anything you want?

~~~
Chris2048
Why would the elite worry about that, life is good in a monopoly, no need to
upset the balance.

~~~
codexon
Because resources don't last forever? Nor are they distributed among the land
equally (for example oil,rare earth elements, uranium).

~~~
Chris2048
Those are all current resources. The general currency is "energy" and
"materials", and even materials are based on the energy in creating them (I
don't think REEs are that rare, but they are hard to process).

~~~
codexon
There is no research to even suggest that we are going to be able to
synthesize one type of matter to another arbitrary type without expending an
absurd amount of energy, making it useless to do.

The idea that you could do something like that is even more outlandish than
having robots that could automate everything a human could.

~~~
Chris2048
> one type of matter to another arbitrary type

But I didn't say this.

Certain materials can be _substituted_ for another, but for high energy costs
in making them.

------
mpweiher
Reminds me of an article in Aviation Week recently bemoaning the lack of new
pilots coming into the profession and saying how this was completely baffling
to the companies involved.

A few paragraphs down they mentioned the starting salary at regional airlines:
$26000.

 _I think I can solve your mystery_

When the wage of the person responsible for 40+ lives and millions of dollars
worth of equipment isn't enough to feed a family (many pilots are on _food
stamps_ ) you aren't paying them enough. Never mind that they also have to pay
for their own education and that includes several thousand hours of Pilot in
Command time. Renting a plane is typically > $100/h. Which is why flight
instructors are often cheaper than tennis instructors: the main benefit for
the instructor is that the student pays for the plane.

And that's one of the main reasons why Sully said he can't recommend the
profession to anyone.

~~~
em3rgent0rdr
I think the low price can be justified because flying has been going to
automation.

~~~
dx034
Not really, you still need extensive training. Requirements have rather
increased over the past years.

The reason why pilot salaries are low nowadays is because the job is so
popular. It's a dream job of many so that airlines could access a pool of
self-trained pilots (i.e. paid for aviation school with loans) for low
salaries. This pool now seems to slowly exhaust so that airlines will have to
start training their own pilots again at some point.

~~~
em3rgent0rdr
Sure they need training. But not something like an engineer, doctor, or
lawyer. Apparently only ~250 hours flying and "commercial training can be
accomplished within 4 weeks if full-time and 4-8 if part-time."
[http://blog.wayman.net/how-long-does-it-take-to-become-a-
com...](http://blog.wayman.net/how-long-does-it-take-to-become-a-commercial-
airline-pilot-in-the-us)

You also make a good point that the supply of pilots have increased, and that
can also explain why so many people are becoming pilots. And part of the
reason for the increase in people being able to become pilots is back to my
original point that it has become easier with automation.

Maybe in the old days, high salaries could be justified.

------
randomdata
The most obvious answer seems to be that the workforce keeps growing relative
to the demand for that work. Wage stagnation began at the same time the number
of women in the workplace started to grow. While a corresponding increase in
demand with the supply of workers would have kept incomes moving upward, women
were actually already consumers. They had to eat, be sheltered and clothed,
etc. even when men made up the vast majority of the workforce.

The rate of the growing female workforce itself started to stagnant around the
90s and 2000s, but a new worker had fully emerged on the scene by that point:
The robot. It's a slight misconception that robots eliminate jobs. In reality,
they compete for them just like people do. They are another worker in the
supply of workers. And while robots bring new demand, as they didn't exist
before, it is not proportional to what they can create like with humans.

And so, increasing supply over the rate of what increases to demand exist, and
you get downward price pressure.

~~~
sharemywin
Except the article cites several examples of where demand isn't being met.

-Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

-Despite high demand, home builders in Colorado are throttling back activity because they can’t find the workers to erect frames.

-An airline canceled flights because it couldn’t find enough pilots to steer them.

Those aren't demand problem but supply problems.

~~~
mason240
>\- Farmers in Alabama are fretting that crops may rot in the ground for a
lack of workers to bring in the harvest.

The oil field boom in ND didn't have a problem getting skilled workers from
across the country to live in tents because they paid them well.

They AL farmers are not worried about finding workers, they want to lowball
American laborers so they can throw their hands the air and claim that they
need a supply of immigrants laborers, which they can exploit.

~~~
logfromblammo
Not entirely accurate.

The migrant farm laborers are actively avoiding Alabama as a result of anti-
immigrant legislation that passed a few years ago. Even though it was
subsequently voided by court order, the workers remember it, and are not
stupid, so they will demand a premium for dealing with Alabama's racist,
protectionist bullshit.

And even paying that is cheaper than offering the sort of labor standard that
a citizen--even a high-school dropout or ex-con--would expect in America.

That's pretty much what they deserve for voting the same party in every
election, without regard to their own economic self-interest.

Edit: The state raised the perceived _cost of working_ for migrant laborers,
to the point that the prevailing wage offered by the farmers is no longer
sufficient to entice those workers to come to work. They aren't lowballing to
preferentially employ migrants, they are just lowballing all labor, period,
because as commodity producers, the labor expenses cut directly into their
profit margin.

------
jandrewrogers
Another fundamental issue is that business has never been structured for high
wage elasticity. When the market clearing price for wages becomes volatile,
which seems to be increasingly the case, it is generally very difficult for
business to track the market because their operating models are predicated on
the relatively non-volatility of wages. Adjusting to that is generally not
easy or quick as it often forces companies to change the way they do business
at a pretty fundamental level.

I've seen this play out at companies big and small when changes in market
wages force them to change the way they think about hiring. Ironically, the
replacement strategy is often to eliminate positions from the bottom half of
the wage pool and to add a much smaller number of positions in the top half,
at least in my experience. (It is increasingly widely believed that this
latter strategy is superior in any case and there is evidence to at least
suggest this is true.)

~~~
SapphireSun
If a business was structured to deal with wages elastically, that's great for
business, but can you imagine working for such a corporation? In theory, the
reason we allow business to profit is because we all share in the benefits,
but if a significant chunk of the market were structured like this, a large
benefit to ordinary people (i.e. the ability to stabilly eat and shelter
themselves) would be removed, removing a large chunk of legitimacy from the
economic system.

~~~
chongli
If businesses were structured for high turnover, then we'd have to structure
society for it too. This means providing all of the normal benefits to people
via government services. Then, all employers would simply bid on workers with
piece work or hourly contracts. People would continue having their medical
care, food, and housing covered by the government, perhaps from a basic
income.

~~~
SapphireSun
I'm down with that. I just cynically expect that only the part that favors
businesses gets delivered and the other stuff gets ground down to nothing over
time. Just look at what's happening with the AHCA and Net Neutrality right
now.

------
vinceguidry
It's really silly to think of labor prices as just being a matter of "people
knowing what they're worth." The example given was painting jobs. If you're
someone that maybe could offer such a job, there's a price at which it makes
more sense for you to do it yourself. That price is a hard limit to the amount
you can offer for such a job. If someone demands more, then you can't satisfy
them because then you're losing out on the deal.

Only growing commercial concerns can afford to hire new employees. The world
used to have a way of keeping people who would otherwise be economically
impotent engaged, and that is cheap service work, but we've decided as a
society that such things are not politically palatable.

So instead we just place more and more expectations on the people that
participate usefully in society, and less and less on those who can't. The
older I get, the less sympathetic I get to this viewpoint, but I suppose
that's a quite common moral journey so I won't belabor the point too much.

~~~
kalleboo
> The world used to have a way of keeping people who would otherwise be
> economically impotent engaged, and that is cheap service work

Service work is up over the decades. What we used to have was manual
labor/manufacturing jobs. [https://cdn.static-
economist.com/sites/default/files/images/...](https://cdn.static-
economist.com/sites/default/files/images/print-edition/20140118_FBC169.png)
[http://www.zerohedge.com/sites/default/files/images/user5/im...](http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/01/waiters%20vs%20mfg%20workers.jpg)

~~~
vinceguidry
Manufacturing and the Industrial Revolution is what destroyed cheap service
work. Factories had such a big thirst for labor that they outbid families for
the same labor that used to go into households and farms.

Eventually it got stigmatized. Now most countries' labor laws prevent anything
like what used to happen. Probably for good reason, some of these people
toiled in horrid conditions, but I don't think re-allowing them is going to
recreate those conditions.

~~~
maxerickson
What do you mean by re-allow?

Do you mean cutting minimum wages so that people can hire staff for their
homes?

(Because lots of people are perfectly happy to hire part time staff at higher
prices, cleaners that come once a week, lawn care, delivered/take out food,
etc.)

~~~
vinceguidry
This is true. A lot of people are. But part time gigs do not make for stable
employment situations for people that need them.

I really don't know the answer. Nothing seems politically feasible at the
moment.

People need stable jobs. Would-be employers need to be able to afford to keep
on 'the help'. Allowing full-time, below-minimum-wage service staff seems to
give a lot of people economic viability that otherwise would be constantly
teetering on ruin.

Can we bring those days back? Or at least try it out? I don't know.

Perhaps the real problem is employers' tendency to over-negotiate. So the only
thing the new service class can really expect is to be oppressed by their
bosses. Edwardian-period England was not a nice place for servants. Maybe new
tech tools will give employees an advantage that pre-industrial servants
didn't have.

~~~
maxerickson
Maybe spend $100 a day if you really want a servant?

~~~
vinceguidry
It's not just about finding market-clearing rates, it's also about the
regulatory environment. If you directly employ people to work in your home,
then your home is a workplace with all that entails.

This is the reason that even people who can hire full-time service staff, such
as nannies, often don't, and instead rely on part time contract service. It's
an arrangement that better suits employers than employees.

I'm trying to think of ways we can offer people who aren't economically
competitive in the workplace the ability to find stable employment. The
current job market is just getting more and more hostile to the less-
advantaged.

------
chank
They hit the nail on the head right here: "Companies are psychologically and
emotionally geared not to raise wages as a matter of course." Our current
business culture is basically to maximize profits and minimize expenditures.

~~~
salmonet
For whatever reason, maximizing profits and minimizing expenditures is a
popular trend among many successful companies

~~~
electricEmu
It's popular until a company loses its market. Minimal expenditures mean
minimal investment and retainment. That's not healthy in the long-term for a
company.

If you'd like to discuss further then please provide more than a summarized
sentence.

------
bsder
Those employers don't want employees, they want _CHEAP_ employees. If you pay
$100/hour, you _will_ get employees. So, the only question is "where is that
wage number?"

Employers aren't stupid. If they could make more money by hiring employees,
_they would_. What this tells me is that demand isn't high enough for an
employer to calculate an increased return from hiring someone.

So, what this tells us is that _demand_ is dead. That's what happens when you
hollow out the middle class.

~~~
harryh
This is wrong. Employers are adding employees, at a consistent rate of 200k or
so per month for 7 years:

[https://data.bls.gov/timeseries/CES0000000001?output_view=ne...](https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth)

The issue is that even with all these hires there is still a fairly large pool
of people that want to work that don't currently have jobs. This is why wages
aren't rising.

~~~
codexon
Filling cheap/temp jobs doesn't mean demand isn't weak.

If companies were truly desperate for people they would offer higher prices or
even pay to train people to their standards.

I remember in the 90s, someone telling me that tech companies (even
established ones like IBM) saying they were hiring anyone with a pulse, and
that they were trained on the job instead of being asked for 20 years of
experience with X, Y, and Z.

If you can afford to be so picky to only hire people that can answer absurd
questions like why are manhole covers round or coding a minimum spanning tree
operation on a whiteboard with 0 screwups, you do not have a very large demand
for people.

~~~
linkregister
I don't remember hiring being that lax in the 90s.

Microsoft used (and still uses) lots of contractors, but those were not secure
jobs, nor did they provide much training opportunities.

Yes, during the dot-com boom, "HTML programmers" could be hired at startups
with a minimum of experience, but this was hardly a long-lived trend.

~~~
codexon
Microsoft was the Facebook/Google of that time, they had the most stringent
hiring requirements.

------
jernfrost
I think this is part of the equation about illegal immigrants which nobody in
the US seem to talk about. They dont talk about all the companies exploiting
illegal workers. We had a situation in Norway with exploited Polish workers.
It was when Norwegian unions started targetting polish workers when things
turned around. With polish info about workers rights, salaries and conditions
improved. If you get unions more actively involved in the US you might not
need big walls. Businesses are not going to hire mexicans if they cant pay
them shitty salaries. If salaries and conditions are better americans are
going to take those jobs instead.

------
erikb
Getting a raise and bargaining for a starting pay, and offering a default pay
for a job, these are three different things, I think.

Most people don't ask for raises, or draw no consequences from being mad about
not getting a raise. So after a few generations companies adapted and simply
don't offer raises anymore as default.

People who really want to make more money, still get more money. Just not in
the same job. While working less in their current job they start to look for
other jobs with better pay, and since they have a current job they can
proactively bargain for the pay they want. If they don't get it they just
don't switch.

And last but not least, but I hope at least here people have noticed that now
we have a method called Start-up. That is a way to get a lot of raises in a
very short time frame as well. The only requirement is the cruel real life
fairness of having a growing marketshare.

So we have everything, non-increasing incomes for lazy people, regular raises
by job switching from dedicated people, and fast-lane high-risers for people
who can really take a risk.

And of course we also have a problem. But that problem has nothing to do with
any of the three things (raises, job offer bargaining, default pay): We have
more and more jobs that are automated and replaced by machines. If you have
autopilots in airplanes that do a well enough job, you simply don't really
need the pilots any more, for instance. I honestly don't know if we can find a
solution for that, or if we are heading for another period like feudalism
where only a small percentage of people actually have a good life.

But, well, as long as we don't talk about that problem we certainly won't
resolve it.

~~~
linkregister
The opportunity to job hop is not as universal as you might think. Until
fairly recently I also had the false impression that anyone could do it to
achieve a pay raise. There are plenty of occupations and industries that
preclude job hopping.

1\. Company towns, heavy industries, monopsony; many regions have one large
employer or customer offering a variety of jobs to the inhabitants. Think:
auto workers, chicken farmers. There is nobody else in the region to buy their
labor or product, so unless an individual moves, they cannot change jobs
without retraining and/or liquidating their assets.

2\. Ultra-specialists. There are many occupations where turnover is low and
the total number of people in the field is low. Compensation may be high due
to a scarcity of qualified applicants, but the overall number of positions may
be low. Changing jobs in a region might be exceptionally difficult since there
may only be a total of a dozen jobs for a given region. Example: speech
pathologists, radiographers, elevator repairers.

3\. Middle management. Once someone enters the ranks of middle management, job
hopping can be destructive to a career. Instead, it is expected that a manager
will move to different departments. A middle manager or company officer is
expected to quantifiably add value to a company. If you look at the successful
managers in tech, you will find most have only been managers at 2 or 3
companies in total, with a tenure of at least 5 years at each.

~~~
erikb
In theory yes, but in practice I think people who want to make a good amount
of money don't work in these jobs, or at least not for long. For instance, you
aren't born as ultra-specialist. You get there by dedicated work and the goal
to stick to that kind of task. People who want to earn money know a little
about a lot of different things.

About the middle management I can only suggest to read the Gervais Principle.
They may be mostly the people who are not smart enough to get to the top and
not socially skilled enough to job-hop easily enough.

------
MrFantastic
When healthcare premiums are rising double digits annually, there is no money
to increase salary.

We have to decide a basic level of healthcare every Citizen is entitled too
and if you want more, the individual pays for it.

Cutting taxes on the already wealthy isn't a stimulus, but putting $18k ( avg
annual HC premium ) back into pockets the middles classes will stimulate the
economy because they will spend it all.

Cutting taxes on the wealthy just slows the Velocity of Money.

~~~
djrogers
That sounds great on the surface (putting $18k “back” into middle class
pockets), but where will that money come from?

Every example of universal healthcare I’ve seen so far pays for it with huge
payroll and income taxes. Payroll taxes have a direct and demonstrable effect
on wages and hiring, and income taxes would just wipe out the benefit.

The problem with your idea is that it doesn’t actually do anything to contain
healthcare insurance costs. Those costs have risen dramatically faster under
the ACA than before, and they were already going up quickly.

I’m not opposed to universal healthcare at all, but you can’t just hand-wave
and make it ‘free’, and with those costs I don’t think you’ll see the benefits
to wages you’re looking for.

~~~
wfo
Sure there are subtle implementation details, but let's not put the cart
before the horse. The political and moral will to do it comes first, the
details of how to work it out happens later. If we get to the point where the
actual ruling class (not just the vast majority of Americans when polled) is
willing to give in to the citizenry and give them universal healthcare and
starts saying healthcare should be provided as a right to all Americans, there
will be no issue getting the financial details worked out. They have an easy
job; it's inherently more efficient (larger risk pool, no middleman),
implementing even the expensive policies being proposed right now lead to
savings of trillions. Though those savings are concentrated among the poor and
middle class for whom health costs are huge and taxes are smaller, not senior
vice presidents of health insurance companies . As it turns out in aggregate,
it's not only already "free", it saves money.

------
nitwit005
My observation in the US is that there is a pretty big gap in perception of
how professionals or managers should be paid versus ordinary workers. You'll
find people who would never consider paying workers more than minimum wage,
and yet consider the bills from lawyers and consultants perfectly reasonable.

Part of it seems to be a general belief that some sorts of expensive
professionals are better, much like how people assume pricey wine tastes
better, but I suspect most of it's just class issues.

~~~
shados
Someone above mentioned it, but basically, for low skill/manual labor, there
is a level at which you'll say "I can do it myself", or "I can hire some
intern or random kid to do this". And that's the hard cap ofr those jobs.
While you can represent yourself in court, it's probably a bad idea (and you
can't legally do it for someone else, so you HAVE to cough up t he $$$).

On the other hand, I personally have a very high appreciation for high quality
manual labor (eg: carpentry) and I'm always looking for the best money can buy
in those areas....and it's impossibly hard.

Since no one else seem to value it, no one does it. Everyone's optimizing for
cost. I had a very difficult carpentry job that needed to be done recently,
and I went hunting for the best of the best, offering well over what a lawyer
or software engineer would make. Crickets. It took over a year to find
someone. Those people no longer exist since there's no market for it.

------
lsiebert
Remember, if you do end up quitting your job, be sure to tell your employer
that they weren't paying enough. Then when they hire to fill your position,
they may be more likely to offer a better wage.

~~~
krapp
More likely, they'll try to offer less to your replacement, given the
opportunity to pay less for the same labor. This is why many employers ask
potential hires about their salary expectations and prior wage history.

------
projectileboy
Most employers have been giving their workers steady pay increases for years -
those pay increases just happen to go to health insurance companies.

------
louprado
Perhaps the phrase "six-figure salary" has caused wage stagnation.

Once a manager, for example, hits their personal goal of "six-figures", they
feel they have hit an important milestone. So they are content year after year
to privately make $100,001 but publicly/subconsciously use the misleading
phrase of "six-figures". A manager's salary is implicitly the upper bound of
their subordinates' pay so the whole work-force suffers.

If the goal is inspire a higher paid workforce, let's stop with the "six-
figures" vagueness and use concrete income milestones (e.g., $250k a year,
$10k a week, etc.) instead.

~~~
wfo
I've never heard of a manager who is content with $100,000 and does not
immediately wish for the position a couple rungs up up on the ladder where
they can make $150,000 or $200,000. Nobody is content with stagnant wages,
management or labor, especially when costs are constantly increasing.

------
Animats
Part of the problem is that people are much more reluctant to move for a new
job, because job security is now so low. Also, moving to a town with one major
non-union employer is like signing up for indentured servitude.

------
philcyr
In the industry I work in it's a skills gap. I work for an Industrial
Electrical Contractor. We cannot find enough skilled electricians out there.
The good ones have jobs and don't seem to look to change. We've had to start
our own 5 year apprentice program because of lack of qualified candidates. A
real problem is too many school counselors and society in general tell people
you can't make a living doing skilled blue collar work.

~~~
TheAdamAndChe
Well given the fact that many of those skilled blue collar jobs have either
been outsourced or supplanted by illegal immigrants, and given the fact that
their wages have either been stagnant or on the decline since the 70's, it
makes sense that the schools would push the kids into careers resistant to
those forces.

------
ge96
I'm just glad I have a way out potentially as a developer. Starting to build
up client base still far from being able to be self employed but I'm grateful
to be aware/know where to look to learn.

I'm not a fan of my day job with regard to, regardless of their customer input
(say they did a lot of business) I don't get a bump or tip or anything. No
incentive to try harder also my day job any kid off the street can do so what
can I say.

------
shams93
A lot of employers try to offer so little for unskilled jobs that it costs
more to commute to the job than you could make. Those jobs will go unfilled
because no rational human is going to pay someone to be their employee even if
they dropped out of high school most people can do enough basic math to know
whether a job will cost more to commute to than they can make.

~~~
matt_wulfeck
That may explain unskilled labor, but what about "skilled" labor, such as
plumbers and electricians? Huge shortage of these workers and they pay _very
well_.

------
justforFranz
Labor has no pricing power in the USA and it's _partially_ responsible for the
candidacy of Donald Trump & Bernie Sanders - for what it's worth.

All the spigots for cheap labor in the USA are turned on full blast and have
been increasingly so since the late 1970's when labor power was at its zenith.
Those spigots are: free-trade agreements with other countries, automation,
anti-union actions, flow of illegal labor, flow of legal immigrant labor,
globalization.

It's the cause of social turmoil, but that's not much of a concern (in fact
it's something to be harnessed and consumed) for the ruling (and chattering)
classes.

------
flatfilefan
No new markets where to expand. Since Russia got re-grouped with Putin, the
Russian (and former USSR) markets started to close for US exports. Chinese had
their own dynamics. The labor participation rate is at the 70-ties rate again.
Go for the maiximal time period here to see the dynamics.
[https://tradingeconomics.com/united-states/labor-force-
parti...](https://tradingeconomics.com/united-states/labor-force-
participation-rate) Also check who's getting all the gold recently
[https://tradingeconomics.com/russia/gold-
reserves](https://tradingeconomics.com/russia/gold-reserves)

------
honestoHeminway
Its a consequence of all risks on the individual. You get a raise with the
implied alternatives you can show up with - and to consider playing this poker
game, you need to have no risky cards on your hand. No wife or children that
can get sick, etc.

------
tmaly
You have to also consider the money supply and creation of commercial credit
in the system. If the currency was a true stable store of value, the savers
would be rewarded. Over time, the value of their money would purchase more due
to innovation and reductions in price.

Historically, before the Gold Reserve Act of 1933, the one ounce double eagle
gold coins were valued at $20. You could buy a good suit with just one of
those coins. Fast forward to the present, if you take a current double eagle
one ounce gold coin that is produced today, you can still buy a good suit with
it.

~~~
djrogers
I don’t know what kind of suit you could buy but I 1933 for $20, but I know
that today 1200 is far more than you’d need for a ‘nice suit’ due to price
reduction and globalization.

~~~
tmaly
my point was that you could buy a suit for the $20 prior to 1933 and with the
same coin today still buy a suit. The currency was stable, so it protected a
person's savings.

You hear all these horrible stories of elderly people having to choose between
food and medicine. Prices keep escalating, and these elderly people live on
fixed incomes.

------
prostoalex
They track "average hourly earnings" which leaves out a number of non-monetary
benefits, such as

* health + dental + vision insurance

* 401(k) matching

* ESPP

* other stock-based compensation, such as options

* number and flexibility of vacation days (i.e. if someone didn't get a raise, but got 5 extra vacation days, it certainly has value for them)

* free food, massage, yoga on premises, etc.

Tracking average hourly earnings also means that $1 annual salary CEOs such as
Mark Zuckerberg or Larry Page are dragging down averages quite a bit. Every
startup that pays sub-market salary in exchange for a generous options package
is also dragging such average down.

~~~
s73ver
The vast majority of startups paying sub-market salaries are either going to
fail, or be acquired in such a way that the workers don't see anything
meaningful from their "generous options package".

And this article is about the broader labor market in general. Not just
startups. And a lot of workers won't see any of those benefits that you
listed.

------
Mankhool
Not just America. In Canada too salaries have been flat forever. I work at one
of our big three telcos and we were told last year that nobody is getting a
raise for at least the next 3 years. Like, none of my costs of living are
going to go up in the next three years either?

[http://globalnews.ca/news/3531614/average-hourly-wage-
canada...](http://globalnews.ca/news/3531614/average-hourly-wage-canada-
stagnant/?utm_source=GlobalNews&utm_medium=Facebook)

------
YPCrumble
Sales is a science. The writer is doing a great job of categorizing
"objections" to the sale. That's terminology that any trained salesperson
should understand.

This categorization helps the salesperson do two things: \- De-prioritize
leads whose objections they're unlikely to overcome \- Craft responses to
objections they are likely to overcome and prioritize these leads

In this particular case they're unlikely to convince a soon-to-retire or
luddite vet -- they should de-prioritize these, maybe put them in the CRM to
ping in six months to see if anything has changed. They should also be aware
that their target market doesn't include these vets, so if the proportion is
high enough they might want to find a different market.

For the others, it seems they're already crafting responses to the objections
- presumably they'll get a sale fairly soon if the market is big enough.

~~~
nulagrithom
Wrong article?

------
Shivetya
so what are the chances that a significant portion of the population was being
paid more than they are worth? Whether because of skill set or simply the
industries are adversely affected by more competition?

there are certainly people getting raises, so is this limited to specific
industries, regions, or other category? Is there a break out where raises are
occurring versus where they are lacking?

anecdotally, personally I have no friends in my circle who made mention of no
raises. poor raises sure, but that is always relative to expectations

------
asah
This is all temporary - as the fed raises rates, we'll finally get back to
'normal'. This is exactly the fed playbook.

------
Animats
Because Republican state legislatures are keeping minimum wages down.[1]

[1] [http://www.foxnews.com/us/2017/07/12/minimum-wage-hikes-
by-c...](http://www.foxnews.com/us/2017/07/12/minimum-wage-hikes-by-cities-
getting-rolled-back-blocked-by-state-lawmakers.html)

------
thatfrenchguy
Profits ?

------
maxxxxx
Any ideas for a tax system that makes raising wages attractive?

~~~
cakedoggie
Our current one.

------
davidf18
The author has a degree in history. Perhaps it would be helpful to have an
economist write an article about economics. I am not one, but at least have
training in jobs that require analysis and not dogma.

1\. Wages are just part of the overall benefit package per worker. Healthcare
costs to firms have been rising dramatically and these higher healthcare costs
(even as employers are having workers pay more out-of-pocket) have resulted in
a flat overall wage payout.

2\. What should be focused on is overall standard of living and not wages. In
cities such as my own, NYC, but also SF, LA, SD, Boston, DC, the price of
housing and commercial real estate (an increasing cost to businesses which can
result in lower wages paid out) is caused because of "rent-seeking" that
causes an artificial scarcity of land through politics that limit zoning
density with the resultant higher proportion of income going towards housing
costs. The rent-seeking benefits special interests which in this case are
wealthy landlords such as Donald Trump.

3\. Importing illegal immigrants holds down wage costs among the working
class. Except for Trump, almost all Democratic and Republican Presidential
candidates wanted to import illegal immigrants.

4\. Exporting factory jobs to China and Mexico have also kept wage rates low.

5\. The abuse of H1-B Visas have helped to keep wages lower among STEM
workers. H1-B Visas are supposed to be used only in the case where there is no
American with the skill set to fill the job. Many Democrats and some
Republicans actually want to increase the number of H1-B Visas to further
depress STEM wages. Trump campaigned against H1-B Visa abuse and spoke against
Disney replacing 250 American IT workers with H1-B from India, a clear abuse
of H1-B. Clinton did not speak out against H1-B Visa abuse.

6\. Raising minimum wage by law to $15 per hour as the author suggested
demonstrates to me that he wants to take this simplistic solution which ends
up with higher costs to poor people who have to buy goods and services.

In summary, instead of focusing on wages alone, focus on standard of living
much of which is poor because of rent-seeking which benefits wealthy landlords
to the cost of everyone else. When focusing on wages, deal with the structural
issues which are 1) increasing costs of healthcare and other benefits 2)
increasing real-estate costs to businesses, 3) eliminating illegal immigrants
4) eliminating H1-B Visa abuse and decreasing the number of H1-B Visas.

Raising the minimum wage through law simply lowers the standard of living to
the poor such as retirees on fixed incomes as the grocery store costs and
other costs increase.

~~~
Terr_
Just watch what Trump does with H2-Bs, that's where he hires foreign
dishwashers, gardeners, and waiters for his resorts.

If Trump is largely using the presidency as a stature and money making scheme
without truly divesting from his private companies, I expect you'll see a big
difference depending on whether a particular piece of policy affects his own
wallet.

~~~
davidf18
By far the greatest part of Trump's wealth comes from the "rent-seeking" that
I mentioned. The sources are all political: 1) zoning density restrictions, 2)
overregulation (e.g. in a city with mass transit and Uber, parking spaces, and
lots of red tape to increase time of construction) and 3) overuse of historic
landmark status. This rent-seeking is all implemented by cities run by
Democrats.

Thus, it is Democrats who are most responsible for making Trump far, far
wealthier than he would be without their assistance. This while adding to
inequality and making rents for even small apartments very expensive.

Incidentally, in Japan in 2001 or so they passed a federal law which overruled
local zoning density restrictions. The result is that in 2014 140,000 housing
units were built in Tokyo compared with less than 90,000 _for all of
California_ and 20,000 for NYC.

------
randyrand
wow and slate has no understanding of basic economics.

take a macro class sometime.

------
mordant
One word - immigration.

~~~
c0nducktr
Two words - prove it.

------
r0brodz
We will never move out of this situation until we repeal the de facto currency
and go back to real money based on gold. We have had only legal tender since
1933. Lincoln got killed for printing Greenbacks. Kennedy was assassinated for
exposing secret socities. We are under the rule of a fictional commercial
entity incorporated in a land taken by war and therefor the laws of admiralty
are the true rule of this land. The Fed, IRS and US CORP are Vatican/British
entities. The world continues to be conquered by the Roman Empire. Lets get
rid of US Debt Currency and move into real money. That's the real solution, a
true independence. We are nothing more than a subsidiary of the IMF and
WorldBank. If the people of US don't realize this basic truth nothing will
ever change. The reality is that those who control currency are in power.
Before you judge do some research on Puerto Rico and IRS. Also look at the US
code itself. The creators use the loopholes (remedies) to remain in control.

~~~
logfromblammo
Buddy, I feel for you. I really do. I caught this kind of crazy about 20 years
ago. But then I got over it.

Yes, a great many people are essentially ruled by the lies told by the rich
and powerful. But ferreting out and exposing those lies won't do you a bit of
good. The bullshit you are repeating here is likely to be spread and
encouraged by those who stand to profit by increased consumer demand for gold,
and for disaster preparation supplies.

You took the red pill, and now you think Zion is the real world. It isn't.
It's the pressure release valve--the special program loaded to house "problem"
residents of the Matrix. You're in an oubliette made of your own thoughts.

It just doesn't matter if the world has a secret emperor supported by a cabal
of Illuminati. If you want to survive in it, you get a job or start a business
that transacts in the commonly accepted currency, and you pay your taxes--not
because they are just, but because you will get beaten, caged, or killed if
you don't.

If you truly believe that those who threaten the system are assassinated by
it, then who are you to escape that fate? You can play the game by the rules
defined for it, even if they are not fair, or you can flip the game board off
the table and get dogpiled into a bloody pulp by all the players who thought
they had a chance at winning. You're not going to get anywhere by spending
your whole turn whining about changing the rules. You'll just piss off the
other players as the gamemaster waits you out.

The world is not fair. Knowing it is not fair does not make it more fair.
Going back will not move you forward. The unethical asses of this world
already know about gold, and have planned ahead to negate it as a threat to
their influence. You would be far better off tossing out all the conspiracy
theory, and trying to puzzle out some Etherium smart contracts that would
obviate the kind of power one may wield by exerting private control over fiat
money. Good luck.

~~~
nkurz
This is a beautiful response, but would seem to indicate that truth is not
worth pursuing, and that social reality is all that matters. Disregarding
whether this particular conspiracy theory is true, do you not think (hope?)
that knowledge of what is actually true can at least help to inform effective
strategies for change? That a model that stays tight to reality can lead one
to a better place than a black box that makes decent predictions and provides
steady paycheck?

~~~
logfromblammo
In this society, at this time, knowledge of truth is only effective as
motivation for action. Truth as an end in itself is fine, but if the truth
isn't something you're comfortable with, there you are, uncomfortable with it.
So... now what?

A lot of the people suffering from same type of misinformation-fueled
perceptions as OP don't know what to _do_ after learning the "truth". Topple
the system by buying gold and burying it in your backyard? How does that work?

Armed rebellion? Versus professional US military? How does _that_ work?

Guerilla warfare against the system? Great, now you're considered terrorists,
and the FBI informant in your group gets all of you shut down and imprisoned.

Amass huge numbers, organize protest marches, form a new political party or
take over an existing one, and get elected into power? Okay, yes, that will
probably work, except you'll never get enough people to join just by seeking
the truth. That route requires money and rhetorical acumen, which is in no way
related to truth. People don't vote for truth; they vote for what feels good.

As the old GI Joe cartoons often repeated, knowing is half the battle. You
still need the "doing" half. Knowing that the whole world is run by money in
the interests of those who have a lot of it is like knowing that the tides go
in and out twice a day. What do you actually _do_ with that information?
Treasure hunting in tidepools? Fishing? Moving your beach chairs and umbrella?
Designing an engine to harness power from wave energy? Collecting driftwood?
Standing in one spot and slowly drowning yourself over a span of 6 hours?

You may be surprised at how often people espouse a plausible, believable
hypothesis to explain some part of world politics, and then follow it up with
either "so give me your money" or "so go build an intergalactic interocitor
and infuse it with orgone energy and essential lavender oil". The former is
preying upon the fears of weak people, and the latter is just useless lunacy.

