
If wages are to rise, workers need more bargaining power - dluan
https://www.economist.com/finance-and-economics/2018/06/02/if-wages-are-to-rise-workers-need-more-bargaining-power
======
nimbius
Speaking as a full time lead maintenance mechanic at a local auto repair shop,
The tradecrafts have kept a pretty reasonable grip on bargaining power. The
shop owners understand that if its not an honest days work for an honest days
pay, I will leave. strong unions in the past have worked hard to ensure I
could, if i chose to, open my own shop in about 3 days time. My local
automotive mechanics union would even cover the cost of shipping new tools to
my shop, and maybe run an ad or two in the paper.

Mr H. if you're reading this, im certainly not quitting anytime soon! :)

Ive worked in aerospace as well, where tradesmen are frequently paid more than
managers. hassling an engine tech here, or casually second guessing one, is
unthinkable and has gotten good managers demoted or fired. I was basically on-
par with a surgeon as far as my respect and authority was concerned.

Im not saying ive never been part of a strike. Most of my union jobs have been
rewarding and fulfilling, with a level of transparency rarely seen in big
shops. Ive had C level accountants sit down in a hanger with us to go over why
we need to trim down on expenses, and make sure we understand it in plain
english. To me, that speaks a lot.

As for people in the Amazon shipping trenches, all you need to do is be brave,
stay motivated, and push for a union. You regional and long haul amazon
truckers also have a lot more bargaining power than you realize.

~~~
petermcneeley
Great read. But your last line about amazon and truckers is interesting
because we all know that there is a drive to automate these positions.

~~~
rm_-rf_slash
Still a long ways out. In the meantime, there is a significant trucker
shortage and wages are rising quickly.

~~~
jklinger410
There will continue to be rising wages and trucker shortages as no one sees a
great future in that line of work.

Sure, jobs will remain. People will be paid to sit on trucks while they drive
themselves across the country. People will be paid to sit in air conditioned
offices and watch trucks as little dots as they travel across the country.

They will have to _find_ people to do those as well. The whole industry is
boring unless you are management/executive level. Truckers today will have
first dibs on all those positions, also, leaving new truckers completely
screwed as their relatively new high paying trucking job leaves them with
nothing.

~~~
s73v3r_
There was a story on the trucker's shortage recently, that went into reasons
for the shortage. A large part of what's causing it is that, for one, it's a
crappy job, but for two, companies are not raising the wages, especially as
one would expect if there's a shortage.

------
piker
PSA: "Real pay" means nominal pay adjusted for inflation. So if pay went up by
3%, and inflation was 2%, you'd get something like a 1% "real" pay increase.
Please reserve comment about the "cost of living" or inflation, as those are
(technically) accounted for in this number.

~~~
vanderZwan
I am not an economist, so anyone more familiar with this please educate me on
this matter, but surely a single number like inflation can't capture difficult
issues like rent going up very quickly, or any other issue that basically
affects specific subsections of society disproportionately? (and I'm not even
mentioning the issue of housing shortage)

EDIT: I probably should have used "express" rather than "capture", apologies.

~~~
apexalpha
Rising rent will absolutely be in the inflation number. Sure, it might not be
correct if you live in a big city where rents have risen way beyond inflation
numbers, but it's good on average.

Every European capital / big city has seen absolutely massive increases in
rent and house prises since the ECB started printing money. (Housing sector if
very 'close' to the banking sector and so more directly affected by the
availability of cheap credit). Not causes by the ECB 100%, but accelerated by
it nonetheless.

But if the cost of all other goods has stayed the same, plus the rent and
house prises in rural areas has been normal or even dropped, inflation on
average will be ok.

(And then the ECB says: inflation is less than 2% _on average_ so no problem
here. print. print.. print...)

~~~
vanderZwan
I'm sorry but this statement is full of FUD.

Printing money is what central banks _do_. It's what every Eurozone nation
used to do with their own money as well before switching to the Euro. So
unless you can explain what the ECB does differently that makes this worse
than the central banks before it, you don't really have much of an argument.

Is it printing money faster than the central banks before it did? If so, give
some numbers and sources please.

And in general, be explicit about your claims, because as written you're
practically suggesting that the Eurozone is acting like the Weimar Republic.

~~~
tomp
ECB, FED and the Swiss National Bank have been "printing" money but not the
same as before. They're only using it to buy securities, first bonds, and now
even stocks/index ETFs.

Search "FED balance sheet vs S&P" or something similar. E.g.
[http://whattheythink.com/data/84893-feds-balance-
sheet/](http://whattheythink.com/data/84893-feds-balance-sheet/)

------
roenxi
Real wages increasing means that living standards aren't just steady, but
growing in real terms - ie, people have more stuff and services than they did
last year.

Now, picking on the US, primary energy production has risen by less than 1%
/edit: per annum/ since the year 2000 [1]. I suspect manufacturing growth is
of a similar magnitude [2]. There was a report making the rounds a while ago
saying that US infrastructure isn't in a great place. It isn't obvious how you
could generate real increases without an increased real production to back it
up, no matter how good your strongarm negotiating.

I don't see how the Economist came up with a position of the problem being
disorganised labour. The issues in America are that whatever people are doing
isn't creating real wealth. Maybe they're finally hitting resource limits,
maybe there are capital allocation issues.

[1]
[https://www.eia.gov/totalenergy/data/annual/#summary](https://www.eia.gov/totalenergy/data/annual/#summary)
[2]
[https://fred.stlouisfed.org/series/OUTMS](https://fred.stlouisfed.org/series/OUTMS)

~~~
emodendroket
Organized labor can demand that a greater share of profits be shared with
workers far more effectively than individual workers.

------
lewis500
I wonder how much empowered workers would bargain for wages vs other things
they might want. For example, in the US, we public employees do bargain for
higher wages, but we also go pretty hard for pensions, job security and lower
health co-pays. Increasingly we are also bargaining for childcare help due to
the insane increases in the cost of childcare (this is a genuine mystery to
me: in the 80's early 90's my broke parents could easily afford to put me in
full-time, quality childcare from like 3 months onward). In European countries
with strong bargaining, workers demand more vacation time.

In short, I don't think it's right to imagine wages going up enormously with
more bargaining power; I think it's more accurate to imagine benefits and
terms of employment (job security, vacation, autonomy) going up. Not a
normative point but more of a positive one.

I believe this happens because of how the union works. People who care a lot
about some issue (e.g., parents caring about childcare) will push hard on the
union to bargain for their particular benefit. Wage increases, by contrast,
are spread over the whole union and thus expensive in total but not huge for
any individual, so there is a sort of collective action inertia even within
the union. A small wage increase would cost as much as a huge increase in
childcare help, so the parents will be able to mobilize more easily.
Personally, this arrangement me benefits me a lot as I care more about those
benefits than salary.

~~~
Bartweiss
Your last point is a really interesting and undervalued one. I think
"dedicated interest groups care way more than the bulk of people" is an under-
appreciated factor in all kinds of negotiations; we know it happens in
politics, but it ends up shaping everything from workplace benefits to product
design.

As for specific benefits, healthcare is a very obvious example of why people
push for benefits, and how it distorts earning charts. Per capita healthcare
spending has grown _much_ faster than inflation. A worker who forgoes
healthcare for a salary hike will either fall behind immediately, or need to
negotiate a present-value benefit that will quickly become an awkwardly large
number. (And that's before we take into account the ability of employers to
get good healthcare at a discount.)

The price of healthcare, college, housing, and childcare have skyrocketed
compared to inflation. Anything an employer can offer that either covers those
costs (healthcare, on-site daycare) or helps reduce them (flexible hours or a
shuttle to improve commutes) is going to become steadily more valuable to
employees for as long as that continues, and consequently more important to
lock in _now_.

------
farseer
The glass is half full. In other words: high standard of living has been
preserved in the western world over the last three decades, despite a rising
population and the rise of Chinese manufacturing.

~~~
danharaj
Yea, it's great that housing and healthcare have only grown by 1% per year in
costs since 2000 as well.

~~~
AlanSE
The article is about real pay growth of 1% per year. You are commenting as if
it were about nominal pay growth of 1% per year.

Accepting that housing and healthcare costs have outpaced wage growth, that
mathematically implies that costs of other goods and services were outpaced by
wages by an even larger (appropriately weighted) margin.

~~~
Retric
First no, it was "at most 1%" which means it could be negative.

> costs of other goods and services where outpaced by wages

You're implying that all people consume the same basket of goods as calculated
by the article. Wage growth and spending is not even across society, so most
people could be worse off while all of the above math holds true. _labour
productivity rose by 75% in America from 1973 to 2016, while average pay rose
by less than 50% and median pay by just over 10%._ which is largely because
_between 1979 and 2016, pay adjusted for inflation for the bottom fifth of
American earners barely rose at all._

Further, many goods like computing power have gotten vastly cheaper, but that
savings mostly end up with people who have disposable income. Spend a lower
percentage of your income on such goods and the benifit decreases. This means
the the bottom half of the work force is worse off than you might think.

------
anoncoward111
Meanwhile my rent has certainly risen faster than inflation!

------
exabrial
I have major issues with many of the points in the article. Stronger unions,
for instance, have been shown to just send jobs overseas to human rights
abuser companies. Raising the minimum wage has been shown to be regressive to
the poor, and it just increases their cost of living and devalues their
savings. And then there are the moral implications of a UBI funded by forced
taxation.

I'll propose two alternatives: If wages are to rise, people need to be more
fluid about their job situation. How this happens could manifest itself in
many ways. The most idealistic case is that people save money instead of
living month to month, giving them the confidence to invest in a job search or
absorb the expenses of moving to an area that pays better or has a lower cost
of living. I'd entertain ideas to move to improve the possibility of people
moving jobs or locations.

The second is basic money management skills. I think there's an entire class
of people in the USA that could be paid several thousand a month and they
would still be in debt. We overuse credit and salespeople on everything from
cars to cell phones want you to talk about affording monthly payments rather
than paying the lowest possible price.

------
spir
A great bargaining chip for unskilled workers would be the viable alternative
of unemployment backed by universal health care and basic income.

EDIT: this idea is in the article:

 _More radical ideas like a universal basic income—a welfare payment made to
everyone regardless of work status—or a jobs guarantee, which extends the
right to a government job paying a decent wage to everyone, would shift power
to workers and force firms to work harder to retain employees._

~~~
jeffreyrogers
Wouldn't any publicly financeable UBI be around $10k per year? Plus it would
replace many other welfare programs? That doesn't seem like it provides much
better quality of life for unskilled workers.

------
yondepo
Affordable hi-tech is one of the results of stagnant salaries, isn't it?

People have same salaries but can afford supercomputer with a great camera in
their pocket. I could only dream about it in 2000.

~~~
theandrewbailey
A supercomputer in your pocket doesn't put food on the table, or fix the car,
or reduce crime in your neighborhood, or make sure there isn't lead in your
water...

~~~
3princip
Perhaps not, but it does allow you to learn to grow your own food and fix your
own car, and all manner of other things.

Most people use it for entertainment but we really are spoiled with the amount
of information at our fingertips. The good will of professionals sharing their
know-how online has helped my career grow and made me much more self-
sufficient in other areas.

Tangentially regarding wage growth, sure growing some of my food or fixing my
car is a net-loss in terms of potential earnings because of the invested time,
it's well worth it in other respects. Also, developed countries have a pretty
good standard of living already. Needless consumption is a greater problem
IMO.

~~~
petermcneeley
"grow your own food" If you believe in commonly accepted economic thinking
like efficiency of large scale production and comparative advantage and
specialization, then you must conclude growing your own food does not make
economic sense.

------
TangoTrotFox
The data on this topic really changed my entire worldview. I ran into this [1]
when actually searching information on the chiseling out of the middle class.
And that paper does describe that chiseling of the middle class. In 1979 the
middle class controlled 46% of all income, and the upper/rich classes
controlled 30%. Today (well at least today as of 2014) the rich and upper
class control 63% with the middle class left with 26%. There's even been a
chiseling out of the middle class as a whole declining from 38.8% of society
to 32% of society.

But the eye opener is this. This is the change in the size of each economic
group between 1979 and 2014 as a percent of the total population:

\- Rich: 0.1% -> 1.8%

\- Upper Middle Class: 12.9% -> 29.4%

\- Middle Class: 38.8% -> 32%

\- Lower Middle Class: 23.9% -> 17.1%

\- Poor or Near-Poor: 24.3% -> 19.8%

Such tremendous progress in just 35 years is absolutely remarkable. Statistics
like this are certainly subject to biased interpretation and 'massaging'. If
one is curious about the source, wiki has a section on the political stance of
the Urban Institute [2]. Though the paper itself is very transparent in their
methodology and extremely readable. I found it all eye opening to the point
that it actually changed my worldview.

[1] - [https://www.urban.org/research/publication/growing-size-
and-...](https://www.urban.org/research/publication/growing-size-and-incomes-
upper-middle-class)

[2] -
[https://en.wikipedia.org/wiki/Urban_Institute#Political_stan...](https://en.wikipedia.org/wiki/Urban_Institute#Political_stance)

~~~
alexandercrohde
Eh, so by this calculation we should all be doing great?

How do you square that with the fact that most families couldn't spare $500 in
an emergency? That is absolutely "poor" in my opinion.

[1]
[https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-...](https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-
americans-dont-have-enough-savings-to-cover-a-500-emergency/#2e5010464e0d)

~~~
TangoTrotFox
The problem with relying on media is that they're prone to sensationalism and
hyperbole. Your link is no exception, though fortunately they had the courtesy
of linking to their source [1]. Generally it's probably a good idea to rely on
the first party over the third party.

Key points:

\- What is stated is not what was asked. The question asked, 'How would you
pay for an unexpected expense?' 37% said use savings, 23% said reduce
spending, 12% use credit cards, and 21% would borrow from family/friends.
Presumably that remaining 7% answered other/do not know. That was converted
into "63% of Americans don't have enough savings to cover $500." Thanks
Forbes, thanks.

\- The question was not asked of Americans families, as implied. It was asked
of millennials. Income is obviously strongly linked with age. It's self
selecting to a young demographic that will not only be earning much less but
also be less inclined to save.

That said, Americans certainly aren't saving as much as they should be but
that's probably more of a social than an economic issue. A relatively large
percent of Americans have $0 savings when the current median household income
is a hair above $59,000. Even just saving $1000 a year would be a game changer
in the longrun, but people are of course not doing that - even though most
have the ability to do so if they tried.

~~~
alexandercrohde
So I'll give you that the bankrate study is garbage.

But regardless, it's my understanding that American wealth and savings are
actually lower than the 1970s, even if the income is higher.

------
Applejinx
Yes, obviously. This is why protestations of 'there is full employment and a
job being offered for every jobless person!' are disingenuous, manipulative
garbage.

If you cannot afford to work and live, it doesn't count as a job. And that's
where things are, for most people, so the 'jobs' are lies.

~~~
ctlby
I don't follow. Evidently, people could "afford to live" in 2000--almost all
are still around to collect a paycheck. And now, they can live 19.6% (1.01^18
- 1) better than that! Real, not nominal. So why are the jobs "lies?"

~~~
pjc50
Cohort effects are real.

During that time, something like a sixth of the population will have retired
and now be collecting a pension (ie living off asset wealth). Another sixth
will have come of age (roughly "millenials") and entered the workforce. The
latter group also starts with an increased educational debt (in the US and UK)
and faces a steep cliff of affording housing.

A lot of the jobs _are_ "lies" \- the famous zero-hour contracts, where people
are technically employed but not guaranteed to be given any shifts at all
during a week. There are also a lot of people who are technically self-
employed but not able to earn a reasonable income. Is sitting in an Uber
waiting for a job "employed"?

------
andy_ppp
The majority are a lot poorer and the rich have gotten a LOT richer. We've
seen what happens before when we don't redistribute _opportunity_ effectively
haven't we.

EDIT: Seriously the down voting! Here are some resources for you to think
about:

[1]
[https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...](https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States)

[2] [https://en.wikipedia.org/wiki/Capital_in_the_Twenty-
First_Ce...](https://en.wikipedia.org/wiki/Capital_in_the_Twenty-
First_Century)

[3]
[https://en.wikipedia.org/wiki/The_Spirit_Level_(book)](https://en.wikipedia.org/wiki/The_Spirit_Level_\(book\))

I suggest the rise of populism is caused by increases in wealth going to the
very richest while _in real terms_ the majority of people are poorer than
ever.

~~~
credit_guy
On a global level, the rich have gotten richer, but the poor have gotten a LOT
richer. Three decades ago, as a kid in Eastern Europe, I could taste oranges
once a year, at Christmas time, with some skipped years here and there. Now
everybody can eat as much as they can, and obesity is a growing problem. Maybe
you don’t care that much about the world outside the US or Western Europe, but
literally billions of people have seen their living standards rise from the
subsistence level to a decent level.

~~~
untog
> Maybe you don’t care that much about the world outside the US or Western
> Europe

I don't think that's a fair reaction. It's possible to care about the rest of
the world and recognise context. Workers looking for greater bargaining power
in the US shouldn't accept "but things are much better in Eastern Europe these
days" as a reason for them to not organise - the two are entirely separate
issues, and can happen independent of each other.

~~~
bzbarsky
They're not entirely separate issues. One of the big reasons for rising living
standards in the rest of the world has been the offshoring of work from the US
and Western Europe, which is also one of the things reducing worker bargaining
power.

~~~
s2g
But it's got nothing to do with the decimation of unions and the rise of more
and more worker hostile policies in general.

~~~
ishjoh
I think they are related. If a factory is in the US, and unions drive cost of
employment higher, then the factory owners look to move the factory overseas
to be more competitive. Now it's important that we also recognize that the
factory owners also have to be competitive in a global landscape and against
new entrants into the market, new entrants that can spring up from countries
where the cost of employment is much less, so they have a strong incentive to
move factories when costs rise.

Now at its disposal, a government can implement tariffs and protectionism to
level the playing field, but those can have disastrous long term effects (see
the history of India's protectionism).

So, an excellent way for wages to rise is to make employees extremely
efficient, and to increase the demand in labor. Make no mistake though, the
gains in other countries have effected US and European workers.

------
JulianMorrison
As far as bargaining power goes, a UBI that fully covers subsistence would
definitely be the most effective thing. Because then it would be possible to
say "no". Whole sectors of the economy would have to actually present a value
proposition to employees.

~~~
philipodonnell
I haven't studied UBI a ton, but it seems to me like prices on non-
discretionary goods would increase to absorb the additional income and the
people who set those prices would be the ones benefiting i.e. the people
already benefiting now. Rent seems like it would be a big one. I bet if you
just up and gave everyone an extra $500/month then rents would rise by
$500/month and house prices would increase commensurately, which is great if
you're a homeowner but not so great if you're a renter (and many of the people
who we are trying to help with this are renters).

~~~
stevenwoo
There are multiple studies of Alaska's Permanent Fund which supplies much less
than you are quoting, only around a thousand to a couple of thousand a year
per resident, and it's making a slight increase in people seeking work,
counterintuitively it causes no increase of people working less than before
which some opponents hypothesized. Obviously Alaska is special case compared
to lower 48:low population/hard to get certain goods/not a lot of immigrants.

[https://news.uchicago.edu/article/2018/02/14/universal-
basic...](https://news.uchicago.edu/article/2018/02/14/universal-basic-income-
policies-dont-cause-people-leave-workforce-study-finds)

Also, there appears to be no effect comparable to any of the overheated lower
48 coastal housing markets as well.

[https://www.zillow.com/ak/home-values/](https://www.zillow.com/ak/home-
values/)

~~~
philipodonnell
Whether it results in seeking work is different from how prices respond, in
fact, an increase in those seeking work may be a direct result of the cost of
living increasing.

The subsidy in Alaska is per person, thus two families in identical apartments
may receive different levels of subsidy. If at any point the management
company observes that their tenants are receiving more subsidies (say the
average family size per apartment increases) then they could choose to raise
rental rates to try to capture this. But it raises the rates on all family
sizes, so a 2-person family is now paying more as a % basis than a 4-person
family, so it would make it more likely that someone from the 2-person family
may need to work more/get a part-time job.

Obviously that's a drastic simplification, but I think it illustrates the
problem with stimulating demand without trying to control supply or pricing
directly.

~~~
stevenwoo
Yes, those are all true and the per person thing is pointed out in the
article. However, we do not see a big negative from Alaska level UBI so it
seems it's worth experimenting with it in other places and at other levels.

------
pimmen
I believe this is because the domestic markets of most rich countries are
saturated for stuff non-technical workers can supply. We have transportation,
we have food, we have energy, we have sanitation, we have retail stores all
within our grasp. The stuff we still will always need more of, such as
automation and better health care, require highly specialized and skilled
individuals and that's something very hard to adjust to.

Meanwhile, the other economies of the world has a huge demand for the basic
services and goods and thus their economies have risen dramatically.

I think we are seeing a levelling off of the world's richest economies because
a lot of our growth has been from capital investments into broadening
international trade and leveraging. I have actually moved my investments away
from Europe for now because the interest rates are so low, the innovation is
so low and the political climate is becoming more and more polarized that I
just think it's too risky for now.

~~~
SolaceQuantum
I don’t think we actually have some of those things. See: Flint, MI.

~~~
pimmen
What happened in Flint was a scandal because that's not supposed to happen in
a rich country, that sort of water supply is an eye sore that someone
should've done something about years ago. The sentiment that things like these
can and should be dealt with swiftly is so engrained in us because of all the
benefits we enjoy.

Meanwhile, in some places where millions of people live cholera in the main
water supply is Tuesday. You can make boatloads of cash if you satisfy that
market demand.

------
jejones3141
"And unions look like monopoly sellers of labour—cartels, intended to leech
rents from society as a whole."

That's what they are.

~~~
marsRoverDev
I think there is a balance when it comes to unions - a point where they are
very much necessary, and a point where they are a burden upon society.

If workers in general are being underpaid, I think they are justified. But
then you have other industries where they have a good grip on it and then take
things a bit too far.

~~~
philipodonnell
I always though of this as unions being very important for safety and quality
of work. That is what is often touted as the benefits of unions, the 40 hour
week, OSHA, minimum wage, the end of child labor, etc...

But once an industry is generally pretty safe and relatively fairly
structured, unions begin to lack a certain sense of purpose. Union leadership
is elected and "keeping us safe and fairly paid" won't get you re-elected.
Promising to extract better compensation for your members (even beyond just
'safe' and 'fair') will get you votes, so that is naturally what happens.

There's just no objective way to tell a union that they have accomplished
their goals and aren't really needed until/unless there is a threat to those
goals, but nor is there a way to tell a company that they are operating
unfairly and their workers need a union...

------
icu
The premise of this article is simply addressing the symptoms and not the
cause. Any first year Economics Undergraduate learns that prices rise when
quantity demanded outstrips quantity supplied.

Wages are simply the price of labour. For the price of labour to rise, there
must be less workers willing to do work at the market clearing price.

It is just not possible to do this at this time due to societal factors that
Economists, and this article, have largely failed to address—due to the
sensitive nature of the these factors.

Foremost, the addition of women in the workplace has effectively doubled the
labour supply. IMHO quite rightly as well, freedom is a fundamental civil
rights issue... but the global economy did not outgrow the additional labour
supply and wages have been flat as a result.

Secondly, globalisation has brought about the shifting of jobs from higher
cost centres to lower ones. This reduces the demand side for labour in the
West, resulting in a lower price equilibrium (but has increased the demand
side for labour in the East, where wages have been forced to rise, albeit from
a very low place). It's also obvious that this issue has been a political hot
potato as most moderate political parties in the West have accelerated
globalisation at the same time as they largely ignored its consequences. I
think it's fair to say that this has now given rise to extreme political
views, and parties, on both the left and the right.

Lastly, it is hard to argue that immigration movements have not also brought
about an over supply of labour to the West. Legal or illegal it doesn't really
matter, the net effect is an increase in the labour supply which will push
down price equilibrium.

And as a bonus, most Economists fail to think about the impact inflation (AKA
stealth tax) has on real (AKA inflation-adjusted) wages.

IMHO, productivity and growth are the real only solutions, but I'm afraid that
political uncertainty caused by social upheaval will mean that productivity
and growth are stymied for years to come.

~~~
seem_2211
You should re-read the article. We've seen an increase in productivity, but no
matched increase in wages (a 75% increase in worker productivity in America
from 1973 to 2016, while average pay rose by less than 50% and median pay by
just over 10%).

As for the rest of your comment, you should look into the Lump of Labour
fallacy[1].

1:
[https://en.wikipedia.org/wiki/Lump_of_labour_fallacy](https://en.wikipedia.org/wiki/Lump_of_labour_fallacy)

------
mcovey
I had to negotiate working several days a week remote, because my job doesn't
pay enough to live in or within 45 minutes of the city it's in. Starting this
July I'll be working in-office 2 days a week and commuting over an hour. This
is so I can afford housing. I basically offered my employer a very gentle
ultimatum - I explained that my rent was going up and I'm being priced out of
the city, that I like my job and would like them to invest in me, and offered
them the two solutions of a raise or working more time remote so I could live
somewhere more affordable. They picked the latter. I feel less invested in to
be honest.

I am ambivalent about this solution. On one hand, even if I were to lose my
job, I'd be able to afford my house just with unemployment pay, and even if I
take a job that pays less after, it will likely still remain affordable. On
the other hand, it ties me more to my employer because not all are willing to
allow remote work and if I have to take a new job in the city, it may require
a very long commute 5 days a week. But not all, or even most employers in the
city pay enough to live in or near it. That's just the way it is.

I understand many people are not lucky enough to have either choice.

------
billysielu
Inflation is not measured correctly because it does not include housing and
shrinkflation, and probably other things.

By excluding these things, the inflation figure is smaller. This smaller
figure is then used by your employer to justify your small pay rises.

E.g. "real pay has grown by 1%" when in reality it might be "real pay has
fallen by 5%"

~~~
alexandercrohde
Interesting. Could you suggest a good source that would explain why houses
aren't included in inflation, and what the inflation figure might really look
like if they were?

------
jonbarker
What matters most is economic mobility, and my definition of that is what
percent of poverty level 20 somethings end up in the top income (and savings)
brackets by their 30s and 40s. Because it's kind of OK if the bottom fifth of
earners is just college baristas and bartenders, or financially independent
people just picking up side jobs. I'm pretty sure that's not what is occurring
in the US though, because pensions are now nonexistent and our average savings
rate has always been horrible.

------
bmedwar
> In most rich countries, real pay has grown by at most 1% per year, on
> average, since 2000.

> in America from 1973 to 2016, while average pay rose by less than 50% and
> median pay by just over 10%.

Wild mix of numbers. Each one in isolation I would draw different conclusions.

------
givan
Inflation only measures price for certain products but it doesn't cover
quality or quantity decrease which decreased considerably for most products
over the years.

~~~
mkirklions
Companies find ways to reduce the cost of things, that has nothing to do with
how much money the government prints every year.

Btw, this thread only reminds me why I believe in Bitcoin.

Government money is only as responsible as the government behind it. After
decades of American politics and corruption, I'll take BTC>USD long.

~~~
paulddraper
BTC for transactional!?!?

Most people don't stockpile USD; they use it for transactions...salary, rent,
groceries, stock etc.

~~~
mkirklions
I used my Shift card to buy taco bell. No fees, instant. Feels like a regular
credit card.

the only thing I pay in USD is my mortgage. I DCA my salary into BTC and pay
for groceries with BTC.

------
EGreg
Socialism and Capitalism both rely on an outdated assumption: that demand for
human labor will always be high.

Capitalism says you will always find an employer who values your work. But
whereas your grandfather worked for decades as a company man, had a pension
and was able to support a family on one paycheck, today productivity per
capita is 4-10x higher and people are doing 2 year stints, part time jobs, gig
economy, etc.

Socialism says collective bargaining power will get workers what they want
because they are valued collectively. But as much as oxen and horses unionized
the fields would still be turned into parking lots.

People have needs like food and rent. A Universal Basic Income captures

~~~
TOGoS
For the time being, workers do collectively have potential (if we were better
organized) bargaining power. Otherwise unemployment would be a lot higher.
Which is why we need to organize _now_ if we want a future where everyone
benefits from technology and not wait for the rich to control everything with
an army of robots.

------
verylongname
The bargaining power of workers is being undermined by large-scale immigration
and by trade policy. The National Academy of Sciences report on immigration
found that current immigration policy diverts a shocking 500 billion dollars a
year away from wage earners (and a net benefit to the economy of about 50
billion dollars a year from immigration). I suspect trade policy has an even
bigger impact.

Everything else is lower order.

------
moorhosj
We have been convinced taxes are the problem, while wages stagnate.

------
anovikov
Why not just concede to the fact that the role of 'broad' labor in the economy
has irreversibly fell and not going to return?

I mean, share of labor in the economic pie is probably not falling, but it's
the top 10% who wins anything, and most goes to top 1% - and these are actual
labor, employees, not some corruptioners, or business owners. Broad labor -
'the masses' \- has lost it and it's not going to return.

Why trying to break the neck of economy by introducing artificial
redistributive policies, which will skew things closer and closer to
communism? I grew up in the Soviet Union and i definitely don't want to see
any of that shit, ever again.

Why not look for solutions in non-economic means such as better propaganda,
better ways to spend time, and better law enforcement?

------
antpls
Again an article about the economist magazine...

------
dmschulman
There's something painfully ironic about this article being behind a paywall

------
projectramo
paywall, but did they say mean pay or median pay?

Just wondering if the real pay growth was evenly distributed.

~~~
wool_gather
The full sentence from the article says "on average", which I take as "mean",
because later they make a distinction between "average" and "median".

> In most rich countries, real pay has grown by at most 1% per year, on
> average, since 2000.

Later:

> Thus labour productivity rose by 75% in America from 1973 to 2016, while
> average pay rose by less than 50% and median pay by just over 10%.

But the article is largely an opinion piece; the statistics are not completely
fleshed out.

------
tcbawo
Cant read the article due to paywall. How much of these wage increases can be
attributed to the minimum wage increases?

------
hacknat
I don’t disagree, but is the economist libertarian anymore?

~~~
spiralx
It never was libertarian in the first place. Here's what they have to say
about their stance:

> What, besides free trade and free markets, does The Economist believe in?
> "It is to the Radicals that The Economist still likes to think of itself as
> belonging. The extreme centre is the paper's historical position." That is
> as true today as when former Economist editor Geoffrey Crowther said it in
> 1955. The Economist considers itself the enemy of privilege, pomposity and
> predictability. It has backed conservatives such as Ronald Reagan and
> Margaret Thatcher. It has supported the Americans in Vietnam. But it has
> also endorsed Harold Wilson and Bill Clinton, and espoused a variety of
> liberal causes: opposing capital punishment from its earliest days, while
> favouring penal reform and decolonisation, as well as—more recently—gun
> control and gay marriage.

------
paidleaf
How exactly can workers gain more bargaining power when the system allows
corporations to move production overseas in search of cheaper labor and
encourages poor migrants ( legal and illegal ) to move to wealthier nations to
undercut wages?

The modern world economic system makes it easy for capital to move overseas by
removing barriers ( legal, national, borders ) while keeping labor bound to
particular nations and regions.

And in regards to the US, we allow corporations to keep money offshore untaxed
while if I moved overseas to work, I have to pay taxes on my earnings.

The economist along with most media has pushed the neoliberal agenda of the
wealthy elite for decades while large swathes of the nation turned to the rust
belt. The days of me taking anything from the economist or much of the media
seriously has long passed. I consider the economist and much of the media as I
do facebook, just information pollution.

------
conanbatt
> The reason, economists reckon, is power. New hires generate a surplus,
> reflecting the fact that both worker and firm expect to gain from the
> transaction. Wage bargaining is a negotiation over how to split this
> surplus.

Hello Marx.

> If firms have the upper hand, because a new job is harder to find than a new
> worker, employers capture most of the surplus, creating a gap between the
> value created by workers and what they are paid.

US has full employment, so this explanation does not take into account that
finding a job is super easy. Im skeptical.

The plea for unions is so unique coming from The economist.

~~~
pault
Full employment? What about all the people that have dropped out of the
workforce?

~~~
s73v3r_
There are lots of people who don't participate in the workforce, for various
reasons. You have to decide how many of them are doing so because they can't
find a job, and how many of them are for other reasons (retired, student, stay
at home parent, disabled, etc).

------
baxtr
This information is useless, unless the rise of costs of living are stated

------
fortythirteen
Real pay going up 1% per year for 18 years means that it has gone up 19.61%
since the year 2000. Another great example of statistics being framed to
elicit a certain response.

~~~
bojan
I wonder how it stakes compared to the real GDP growth during the same period.

~~~
TinyRick
Or the inflation rate.

~~~
rohit2412
It's real, not nominal. Real growth takes in account inflation to find real
growth, while nominal includes the effects of inflation

