
The case for higher wages: It's smart business - kungfudoi
http://www.latimes.com/opinion/opinion-la/la-ol-aetna-minimun-wage-living-wage-20150206-story.html
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Riseed
> Miners, who were paid based on how much coal they dug, were seen as
> expendable. If one died in a rock fall, another could easily replace him
> with no additional cost to the company. But if a mule died, the owner would
> have to buy another one. Thus mules were considered more valuable to the
> mine than the men who did the dangerous work.

This is an attitude I've seen in 90% of the bosses I've ever had. Workers were
seen as easily replaceable, and therefore not worth a penny more than
absolutely necessary.

~~~
adekok
I'd agree, except that the _replacement_ cost of a worker is usually pretty
high. The bosses are really making a statement that maintaining their _power_
is worth the extra cost of replacing a worker.

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fiatmoney
I've found it helpful (both for convincing, and for clarifying your own
thoughts) to phrase things like this in ways that are compatible with
"mainstream economists" view of how things work.

The standard riposte to arguments like the one in the article is "well, then
someone would pay their workers better and make more money, and those firms
would come to dominate."

The response to the response is something like, "managers are being paid in
non-pecuniary status benefits via underpaying their underlings, in a way that
reduces total firm output, and there are coordination & principal/agent
problems in getting management to agree not to be compensated in this way".

~~~
owen_griffiths
"well, then someone would pay their workers better and make more money, and
those firms would come to dominate."

Not only would they, they do. Google, Apple, Facebook, Wall St etc pay people
well, and are very profitable. However, paying more allows an employer to hire
different workers.

Paying the same people more is completely different.

~~~
swatow
Even within a job class, there is a lot of variation in workers. E.g. I don't
think most Walmart workers would have a shot at a job at Trader Joe's or
Starbucks.

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patio11
The notion that employees at Trader Joes are different than employees at
WalMart is the curiously American breed of classism, where the poor people get
their groceries bagged by poor people but the rich people get their groceries
bagged by temporarily embarrassed millionaires with art degrees.

~~~
barry-cotter
Is your claim that there is a substantial overlap in <characteristic of
interest> between the two firms or that the distribution is the same? Not
being from the USA my knowledge of the two companies is limited but I believe
they serve different market segments and sell different product mixes although
they're both basically big box superstores. While workers at either are most
definitely members of the proletariat I imagine tenure of employment and
highest degree are both higher at Trader Joe's than Walmart.

The American variant of classism is more amusing than average to be sure.

~~~
patio11
I don't believe that there is a meaningful difference in employment pools
between WalMart and TJ/Starbucks but I acknowledge that many customers of
Starbucks _strongly_ feel differently.

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SixSigma
The food sector is particularly aggressive on wages. There is quite a movement
trying to push back.

[http://www.foodchainsfilm.com/](http://www.foodchainsfilm.com/)

The National Restaurant Association (dubbed "the other NRA") is responsible
for lobbying for keeping tipped minimum wage under $3 an hour !

~~~
michaelchisari
One of the arguments against raising the minimum wage is that it incentivizes
automation and robot labor to replace it.

But I think the robot labor force is upon us no matter what, and delaying it
by using extremely underpaid wage labor doesn't seem to be doing anyone any
favors.

If a living wage forces automation, then it's better to force that and deal
with that reality (with social programs, education, basic income, anything),
that tilt at windmills.

Sometimes I wonder if people being on welfare and having 40 extra hours a week
to figure out what they're doing with their life is better than people working
40 hours at a week at a stressful, useless "job"... and still being on welfare
because it pays barely anything.

~~~
swatow
The fundamental problem is the low market price of unskilled labor. A living
wage is one a way to deal with it, along with social programs, education and
basic income.

However living wages suffer from the problem that they only benefit people
with jobs. Even if they didn't increase unemployment, I would not support them
because I don't think a person deserves more than their employer is willing to
pay. However, I do think that all people below a certain income should have
their income supplemented by the government (what we call welfare in the
UK/Aus/NZ, US welfare is much more complex).

I think one problem is that the left has encouraged people to think in terms
of rights and justice, when the problems around poverty are really problems of
redistribution and charity. Saying that you want to help poor people because
they need help and can't provide enough income for themselves sounds arrogant,
but it's the truth.

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drawkbox
> Globalism, the casualization of labor (replacing full-time employees with
> contractors and part-timers) and a zealous fixation on profits above all
> else have left the American middle class in shambles. That's a dangerous
> thing for a consumer economy.

The ruthless MBA short term metric builders and long term value destroyers are
still at it. People having money to buy is a good thing, not constant cutting
back.

Quality work suffers as there is less money to do it, meaning quality products
suffer, eventually there is no product and no need for sales/marketing or the
CEO because all the grace of current/old innovation dies out. It is very hard
to find quality these days except at companies that do somewhat value
employees and/or engineering/product over finance (as the product brings the
revs, not the revs and cutting).

One day we will return to the value of building quality products and value the
people that do it as the engine rather than the financial part of the company
as the engine. You can't have financial success without happy workers and thus
good products being produced. After globalization is more baked in, it won't
be as easy for companies not valuing quality work. We don't want to finish
that stage with a depleted consumer base.

The minimum wage also should be locked to inflation in some way. Minimum wage
triggers raises throughout the market. Eventhough it just rises all boats, it
sends ripples through the economy from the bottom up when there are downturns.
In downturns there is too much money locked up in the 1% backdrift as it has
to hit rock bottom for investment to start again. Minimum wage auto increases
every 3-6 months would keep a consistent lower end ripple that would
eventually make it up to everyone. If you want a raise, support minimum wage.
When you give to the rich they keep it, when you give to the poor they give it
right back but at least you have money moving.

This is relevant today: [http://www.theonion.com/articles/company-to-
experiment-with-...](http://www.theonion.com/articles/company-to-experiment-
with-valuing-employees,37947/)

~~~
WalterBright
> It is very hard to find quality these days

I'm not seeing this. Cars, for example, are enormously better than they were
in the 60's and 70's. They are far, far more reliable, and the fit & finish is
much better.

~~~
jdmichal
I think the mistake being made is that people continue to expect the same
quality at the same price and ignore inflation. So they complain that the $100
bookshelf they buy in 2015 is nothing like the $100 bookshelf they bought in
1960. Well, thanks to inflation that $100 in 1960 is actually about $800 in
2015, and that $800 bookshelf in 2015 likely _is_ a better quality. In 2015,
for $100 you are buying a product that didn't exist in 1960: a bookshelf for
$12.50. Technology has raised the quality at the same _inflation-adjusted_
price point, but has also introduced _new_ items at lower price points.

~~~
WalterBright
True. There's also survivorship bias at work - the only things left from
earlier times are the good items, as the junk was discarded years ago.

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analog31
I wonder if the sudden discovery that higher wages are a good idea coincides
with people beginning to drop the hint that maybe businesses should be taxed
up the wazoo.

~~~
eli_gottlieb
IMHO, it probably mostly coincides with the _immense_ capital glut that has
pushed rates of return on speculative financial investments to almost nothing,
_forcing_ investors back to making their money off actual industry, at the
same time that globalization is forcing up wages even in the Third World.
Industry requires either cheap labor to exploit or skilled labor to use to
raise its rate of profit... and that means that slowly, the tide is turning
towards actually _building stuff and selling it to people_ , which requires
that the workers who do the job be able to think for five minutes at a time
rather than just nail Thing A to Thing B.

