"Six years ago, before the company opened a giant fulfillment center in Robbinsville, New Jersey, warehouse workers made $24 an hour on average, according to BLS data. Last year the average hourly wage slipped to $17.50."
Guess what? Low-skill immigrants have a similar effect on local economies. But it doesn't mean that those workers are "stealing" higher paid jobs. Seems likely to me that those higher paying jobs are still there, and it's just the average that's gone down.
> Despite a starting wage well above the federal minimum, the company is dragging down pay in the logistics industry and bracing for a fight with unions.
Sadly, the author doesn't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided.
Monetary policy in an economy addicted to debt and the “need” for growth. Easier to steal value from the working class with inflation (ask your average citizen about the impact of expansionary monetary policy on their personal net worth, the result is likely deer in headlights) than appropriately tax the wealthiest and their wealth/assets.
Many developed countries have a reasonable minimum/living wage, you can’t wave scarcity as an excuse. Consumers can pay a bit more, and Jeff Bezos can be a bit less wealthy. World’s smallest violin.
> You could expropriate all the wealth in the world, it wouldn't feed people for a year. You can't eat money.
The wealth exists. Tax it. This isn’t about monetary inflation (as your quote attempts to conflate with wealth), it’s about redistributing existing and future wealth (not just income, wage and equity alike).
> Consumers can pay a bit more, and Jeff Bezos can be a bit less wealthy.
Bezos' wealth is in amazon infrastructure/capital goods which delivers consumer goods to millions of people a day, and crucially, cannot be converted to food. How are you proposing to transform the market capitalization of amazon into a higher standard of living for the average person?
> Many developed countries have a reasonable minimum/living wage,
According to whom? I'm sure there are millions of wage laborers in those countries who would prefer to make more money and consider their preference to be entirely reasonable. Workers in the United States have a reasonable living wage, therefore nothing need change.
> World’s smallest violin.
Right, read an economics textbook please. People can't eat money.
(responding to your edit)
> The wealth exists. Tax it.
So return on investment goes down, which lowers marginal profitability, meaning fewer firms are solvent. Then people have fewer places to work and fewer places to buy goods. People who worked at those businesses are now out of work so the few remaining businesses have more labor to choose from, justifying them paying even less. Everyone who doesn't get a job can just get public assistance, meaning they aren't contributing with their labor but they still bid for goods, causing the price of goods to go up. Thats a terrible idea.
> This isn’t about monetary inflation (as your quote attempts to conflate with wealth),
Per Krugman, monetary inflation is intended to drive down real wages.
> it’s about redistributing existing and future wealth
You can redistribute it so people can have a higher standard of living momentarily by purchasing consumption items. Thats exchanging capital for consumer goods, which results in a lower standard of living over time because there is less capital. Additionally the profits from those sales of consumer goods accrue to the people who still hold productive capital, i.e. the wealthy. You're describing a process that causes the rich to get richer and the poor to get poorer.
You know what else comes out of the pocket of the consumer? Paying for government assistance for people employed full time by a company.
>more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time.
In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.
I see this sentiment on reddit often. However, the logic only works if the worker in question had a higher paying job prior to getting the job at amazon. If the worker got paid less, or was previous unemployed, then the the act of amazon hiring him reduced the government's burden. Also, let's say amazon replaced his job with a robot. Now the worker won't be on amazon's payroll and he's no longer amazon's problem, but now there's one more unemployed person and less money being paid out to workers. Is that much better?
Another angle still, is why does Amazon get to have the benefit of workers who eat and have homes when they do not pay enough to enable their workers to eat and have homes?
If we could set aside the suffering of the individual (which we cannot) one solution would be to let these companies devolve until they are entirely staffed by starving homeless people and see how that effects the productivity of their workforce.
There's a very good (IMHO) recent novel called "The Warehouse" where an Amazon analog ("Cloud") actually has workers living at their logistics facility, eating at their cafeterias and being paid in company scrip.
It feels way too close to a probable future for my tastes...
> Another angle still, is why does Amazon get to have the benefit of workers who eat and have homes when they do not pay enough to enable their workers to eat and have homes?
Because the workers do not have any better option, and working for amazon while making 80% of your required expenses, is better than making 0%. It's the same reason why workers in developing countries work in sweatshops. The working conditions might be terrible, but starving in your village is worse.
>If we could set aside the suffering of the individual (which we cannot) one solution would be to let these companies devolve until they are entirely staffed by starving homeless people and see how that effects the productivity of their workforce.
This doesn't make any sense. Just because someone's homeless doesn't mean they're unproductive workers. eg. if they were living paycheck to paycheck and they were laid off. Besides, if the applicant pool is big enough and there are more job seekers than positions available they can have their pick of workers. For your scenario to work you'd need need enough people willing to boycott amazon as an employer, and given the history of consumer boycotts I doubt it will work. I'm sure amazon raising their wages a few dollars will convince enough workers to break rank.
If you think of the government as a union for the country's workers this explains why the minimum wage exists. It avoids prevents the wage race to the bottom that creates sweatshops. It also explains why some people see the minimum wage as the best method of "negotiating" with employers.
That makes sense because unions are a way of exploiting companies so that the existing employees capture as much of the surplus as possible from the customers and owners and one of the ways they do this is by preventing competitors from entering the field and competing to offer services; and minimum wage ensures that if someone's labor is not marginally more valuable than the minimum wage, they won't be hired.
This actually makes a lot of sense and is a new paradigm for analysis, thank you.
> You know what else comes out of the pocket of the consumer? Paying for government assistance for people employed full time by a company.
I think you mean "taxpayer"
> In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.
Imagine how much assistance they would need if they didn't have jobs.
> living wage.
what constitutes a "living wage" is dependent on the cost of consumer goods which is in turn dependent on the cost of labor. You're not going to escape the fact that some people's labor isn't worth enough to earn them the standard of living that you or they would prefer by wishful thinking or statutory fiat. You can, however, limit their options and distort the market in a vicious circle of economically ignorant mandates.
"Imagine how much assistance they would need if they didn't have jobs."
That would be better.
I would MUCH rather pay for them to be in school instead of just paying part of Bezos' and other Amazon investors operating costs.
Shit I wish I could have a buch of employees and get someone else to pay for them. What a great idea! Why doesn't everyone do that? I mean except for the employees of course. They can't have companies staffed by employees they don't pay for. Duh. Only Amazon and Walmart can have that, obvs. I mean who would be their employees? You? Not me. I guess we need something like a seperate class or group of people who have to be the underpaid employees so that the rest of us can enjoy being the employers without paying for it. We used to have that back in the good old days...
It's almost like this is a stupid argument that there is no way to excuse, and no amount of indirect smoke & mirrors or denial gets around that, and anyone even trying deserves to be among the first people rounded up for the new press gangs they think are so fair a great.
> "Imagine how much assistance they would need if they didn't have jobs." That would be better.
Not for them or for the economy at large. It would be good for people who own capital goods, as they would spend their assistance checks on consumer goods without competing to provide them. The profit would accrue to the few who hold capital and those capitalists would have an enormous supply of reserve labor available, driving down the marginal cost of labor (so the people who did have jobs would have less bargaining power).
> I would MUCH rather pay for them to be in school instead of just paying part of Bezos' and other Amazon investors operating costs.
Thats interesting, how many people can you currently afford to feed, house, and pay tuition for?
> It's almost like this is a stupid argument that there is no way to excuse, and no amount of indirect smoke & mirrors or denial gets around that, and anyone even trying deserves to be among the first people rounded up for the new press gangs they think are so fair a great.
It may seem that way to you. Actually what we have is a bunch of people who are ignorant of economics but still have opinions about how the economy should be run, and a class of politicians who appeal to their ignorance by selling them fairy tales that ignore scarcity and appeal to wishful thinking.
All low paying jobs should be automated. I say this coming from the Ag side because farm labour is grossly underpaid and exploitative. But we can’t raise the cost of food because raising cost of food to pay for labour means more people will find food dear.
It’s wages chasing price chasing wages. And we need more and more food for exponentially increasing population with a smaller work force and lesser land. Only solution is to eliminate such jobs and automate field Ag.
And grow indoors as much as possible. Indoor Ag can increase productivity, use less land and water and also can employ workers from an educated pool because automation requires some skill. So we are also tackling unemployment instead of exploiting poor undocumented immigrants and paying them slave wages.
I see amazon warehouse jobs with low pay the same as farm workers doing repetitive manual work. Automate. Automate. Automate.
> Sadly, the author doesn't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided.
Those pesky abolitionists apparently missed that too. Don't you think they'd have given up had they realized what emancipation would have done to the price of their clothing?
Actually industry is what made it possible to outlaw child labor by increasing the productivity of the individual worker so they could afford to live without putting their children to work. You can see this where non-industrialized countries still have subsistence level families that have as many children as possible in order that they may work to support the family. It's not because they are backwards, its because they have no other option because of the lack of capital.
Yes, eventually the country industrialized to the point that people could afford to live and raise a family without sending those children to work in a factory. They did have to wait for patents on the machines to expire so that more than a handful of wealthy individuals could own capital goods.
It falsely equivocates capturing people, shipping them across the ocean, and forcing them to work under pain of death with offering someone a deal where they voluntarily carry out tasks in return for a certain wage and can leave at any time.
> It's just a snarky illustration
It's an illustration that familiarity with a subject is not a prerequisite for arrogant pontification.
> It falsely equivocates capturing people, shipping them across the ocean, and forcing them to work under pain of death with offering someone a deal where they voluntarily carry out tasks in return for a certain wage and can leave at any time.
Sadly, you don't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided. Why not lower those costs to the minimum? /s
Also, a wage laborer who opts out of the wage labor system will likely end up just as dead as a slave who tries to opt out of the slave system. The "voluntariness" of wage labor isn't quite the panacea is seems to be, when you realize many people are given the choice between one or more shitty jobs or no job at all.
> Sadly, you don't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided. Why not lower those costs to the minimum? /s
Not sure why you feel that an /s tag is necessary. Why not make your point in plain terms so people can read, understand, and respond?
> Also, a wage laborer who opts out of the wage labor system will likely end up just as dead as a slave who tries to opt out of the slave system.
Yes, however one will be murdered for his refusal to be a slave, whereas one will starve to death or die of exposure for his failure to produce food and shelter. There is no equivalence between being murdered and the natural result of failing to work for food and shelter.
> The "voluntariness" of wage labor isn't quite the panacea is seems to be,
Its not a "panacea," merely a matter of basic human rights that someone should be allowed to choose where to work (or if they want to work at all).
> when you realize many people are given the choice between one or more shitty jobs or no job at all.
They are given as many choices as there are other people offering deals. That they need food and shelter to live is a fact of nature, not something capitalists invented so as to replace slavery.
> Its not a "panacea," merely a matter of basic human rights that someone should be allowed to choose where to work (or if they want to work at all).
It's a panacea in the sense you seem to see that ritualized choice as a cure for whatever negatives are implicit in all the choices presented, and thus a license to ignore them.
To tie things back to the beginning, you reacted to a story about the decline in many people's standard of living with a rather tone-deaf observation that some other people will benefit from that decline. Maybe you should consider that decline they experience a little more thoughtfully.
> It's a panacea in the sense you seem to see that ritualized choice as a cure for whatever negatives are implicit in all the choices presented,
I was merely responding to your attempt to conflate slavery with a voluntary agreement.
> To tie things back to the beginning, you reacted to a story about the decline in many people's standard of living with a rather tone-deaf observation that some other people will benefit from that decline. Maybe you should consider that decline they experience a little more thoughtfully.
I observed that the suggested solution to the decline in standard of living would not have the desired effect. At no point have you challenged this observation, which suggests that you have no reason to dispute it. Several times now, you have displayed a poor attitude, which is well within your rights as a human being but suggests you don't have anything to offer to move the discussion forward.
> Maybe you should consider that decline they experience a little more thoughtfully.
Sure, why don't you do the same? I suggest reflecting on the economic realities of scarcity and the labor-multiplying effect of capital.
More often than not shareholders and management can just pocket the difference not consumers. Levi jeans today are low quality compared to a few decades ago but they aren’t any cheaper. Same thing with colleges. Low wage adjuncts as far as the eye can see, but higher education has never been more expensive.
>Levi jeans today are low quality compared to a few decades ago but they aren’t any cheaper.
A simple search contradicts your claim: nytimes says: "A pair of Levi's 501 jeans cost $50 in 1998, and $46 in 2008"[1]
>Same thing with colleges. Low wage adjuncts as far as the eye can see, but higher education has never been more expensive.
The problem here are price insensitive consumers given tons of free money by the government (in the form of guaranteed student loans, regardless of ability to pay back). If you were given the gift of one free TV of your choice (valued up to $2000), your purchasing decision would be very different than if you were simply given $2000 in cash.
I think the author has a beef with Amazon. The labor market is based on supply and demand . If the labor supply is more than the demand, then wages will fall. Except for forklift drivers, most warehouse jobs are unskilled Jobs and during times of high unemployment, prices for unskilled labor tends to fall down. The United States also admits close to a million immigrants every year - mostly via the family based categories. Those also tend to have a downward effect on wages as they compete with local talent for the same jobs .
If the labor market is based on supply and demand, why are teacher salaries stagnant in the face of perpetual teacher shortages? Why do nice school districts pay more than bad ones despite having far more applicants?
No one is operating in a free market. Free markets don't exist in the real world - all markets have externalities and influences other than those created by the markets themselves, if only due to those markets existing within states under frameworks of law and regulation. Arguments from simple supply and demand never describe reality accurately enough to be useful.
That doesn't answer the point raised by the parent comment. If I need programmers, and I'm only willing to pay minimum wage, then only one or two show up, is there a programmer shortage? There's plenty of programmers available, just not at minimum wage. The same applies to the school district example. The shortage is because they're not willing to raise wages.
This is misleading considering the average teacher salary is 50% higher than the average salary in general. In some states, that's only the starting salary.
> The vast majority of states adopted new high-stakes teacher evaluation systems between 2011 and 2016.
> We find that high-stakes evaluation reforms reduced the supply of newly licensed teachers by 16 to 18%.
> Evaluation reforms increased the probability a school had at least one unfilled teaching vacancy with effects concentrated in traditionally hard-to-staff schools.
> Evaluation reforms also increased the quality of new teachers by decreasing the supply of teachers coming from less competitive undergraduate institutions.
Because teacher salaries are not driven by market demand but by taxpayer dollars. Taxpayers everywhere are averse to increasing taxes - hence the teaching budgets tend to stagnate and as a result the teacher salaries stagnate.
Almost half the state budget goes to schools. Ave 70% of school budget goes to staff and teachers salaries. There are Union negotiated raises every single year. And their last drawn salaries as pension for the rest of their lives.
All school districts are distributed funds with a LCFF formula where in all the school budget monies goes into a big pot and redistributed according to need and not according to property tax collected.
California decided that school budget shouldn’t be decided based upon whether it’s an affluent district or not. And hence the redistribution . Who gets the most? If there are homeless students, ESL parents/students, below poverty line, special Ed , inner cities etc. Why? Because sometimes you need teachers who are bi lingual. Counselors, school security, special Ed teachers etc all need more budget. Even if there is one student with special needs, the school has to hire staff.
Schools have gotten creative to get funding. For example..in my medium affluent Bay Area district, spending per student is less than 10k/student. It’s less than average. With a large Asian population, many kids..even though they are American and their immigrant parents can speak English..will be streamed into ESL. Some kids who stay with their grandparents or a home under a trust with utilities in grandparents names are considered ‘homeless’ so they can boost numbers. In California, if someone is homeless, they don’t have to provide proof of their status and schools cannot turn down their children for admission. The more students they can show as needing special Ed, they can avail more funds. They can even apply for federal grants and funds. It’s the only way because the funds meant for our schools is redistributed to rest if Ca.
There is another Bay Area school with no swimming pool. So the city voted to pay parcel tax to fund the swimming pool and gym. Then the union wanted to tap into that fund to increase teachers pay. But it’s an earmarked bond and by the time the dust settled, the construction estimates had doubled and the bond money is no longer sufficient. The parents who voted for the parcel tax have their kids in college and still no pool. I am not talking 2-3 years. This is almost 8-9 years.
Teachers do get lower salaries than the average tech worker(Altho on average equal to or more than other professionals) but they get their last pay as pension. Unions negotiate it that way. In a way, unionized teachers are to teachers unions what San Francisco’s homeless population is to politicians. If there is no grievance, they have no reason to represent them and to exist. CTA is involved in a lawsuit because they enroll teachers into union with or without their consent to show membership numbers.
Nice school districts don’t pay their teachers more. They pay less than bad school districts. Because they don’t have enough ‘special needs’ to justify a larger share of the formula. In nice affluent cities, main streets are filled with tutorial centers and kumon and test prep centers and more. They are the best business to run in California Bay Area.
With high density housing becoming mandatory at the risk of cities being sued and fined, schools are getting overcrowded. You hear stories of children having to choose between having lunch and standing in line to go to the restrooms because there aren’t any. And because construction is also unionized, the cost of one extra class room in California is $1-1.5 million.
It is actually a good idea. It makes sure that all Californians get equal opportunity for education.
The problem though is that the redistribution of funds meant for school budgets do not go just for children’s education. There is no oversight. There is no accountability. There is not even postmortem forensics after they kill our children’s education. It goes mostly towards non teaching staff salaries and pensions(usually the big fish in any school district makes no less than 350k. All public sector salaries available at transparentcalifornia website). The teachers pensions are also part of this. Do remember that the last salary drawn is pension paid for life. They don’t collect SSN checks which are capped. Unions muck it up further. It’s not like parents can sit in during these Union negotiation meetings even though it is the taxpayer who funds and pays for this entire circus.
The actual budget meant for children’s education gets smaller and smaller. Programs get cut, buildings are dangerously outdated, parents have to keep raising money for teachers and when the school district says Jump!, the only right response is How High?
If the school district superintendent gets 350k and the teachers only make 120k, that’s internal to them. It’s between management, teachers and their unions ..and they have to manage the pensions of all the teachers who have already retired, that’s not what education is about...we are not paying for education but for mismanagement of school budget and tax monies.
Why should parents and children get the short end of the stick? Why do tax payers who in good faith believe that the taxes are going to educate every child in California have to be blindsided by politics of unions and their internal conflicts and collusions. It is a betrayal of trust. And it’s expensive.
The major part of any school MUST be the salaries of the teachers as it is...significant part of the budget goes to paying teachers at the detriment of children’s education and building safety etc. and yet, it’s never enough. Probably because we are also covering their unfunded pension liabilities.
And that’s why LCFF was instituted so we’d never be able to trace back what portion of what taxes goes to pay whom..and California’s budget deficit is solely due to unfunded pension liabilities and gross mismanagement of tax revenue to patch every leak in the big ship called Big Gov in Sacramento.
None of this is going to work. Let the robots do these jobs and bring on the Universal Basic Income. Anything short of that is unsustainable and inconsistent with capitalism.
UBI is inconsistent with basic math, because any notable UBI has a cost that exceeds the entire budget of the U.S. government. Let alone the fact that it'll slash the amount of money spent on disabled and old people (because UBI usually includes the lacking plan of cutting other welfare to pay for it).
There's a much bigger debate brewing around what the purpose of a company really should be.
Turns out that focusing only on the cost to the customer means the majority of people work shitty jobs just so they can buy slightly cheaper stuff from other people working shitty jobs. You have to wonder, maybe what's best for people is to pay slightly more for everything and get better jobs all around instead. Even if purchasing power goes down as a result, a slightly more enjoyable 8 hours could well be worth the tradeoff because we spend most of our waking hours working.
If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.
How is that slightly more money people are paying for goods going to do anything if people are just paying more for goods? There's one consumer at the end, there are thousands of laborers contributing between extraction of raw materials and delivery of finished product. It seems that in order for appreciably more to be paid for labor, the cost of goods would skyrocket and people would have to learn to have less stuff.
> If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.
Doubtful. There's not much juice to squeeze from mgmt and labor. Have you looked at returns relative to investment recently?
right... think of a supply chain where each one of the steps is 10% less efficient than it used to be... doesn't take large n for 1.1^n to be approximately infinity
I would agree that I'd enjoy my job more if I got paid more, but it sounds like you're trying to say this will result in jobs that are just over all better. Why wouldn't it mean the exact same "shitty jobs" but with better pay?
Management in any business wants employees to be as efficient as possible to squeeze the max output per dollar paid out. Exceptions exist, but that is roughly the incentive structure created by how companies are valued by markets. If productivity wasn’t the only goal, jobs could get easier in many ways - devs might get longer time to work on a feature, warehouse workers might get less aggressive targets on how many boxes are shipped per day, employees might get more vacation or longer breaks or 4 day work weeks.
> If productivity wasn’t the only goal, jobs could get easier in many ways - devs might get longer time to work on a feature, warehouse workers might get less aggressive targets on how many boxes are shipped per day, employees might get more vacation or longer breaks or 4 day work weeks.
then the company would produce less, so they would have less product to sell, leading to a decrease in revenue and therefore a decrease in wages. I'm not sure why this would be a good idea.
Jobs are "shitty" only in relation to what the worker can purchase with the wages they receive. As consumer prices go down, the purchasing power of the average salary increases, and jobs become less shitty.
It's through this dynamic that wages have grown 20 fold, in inflation adjusted terms, since 1820. Companies finding ways to reduce costs is how that happened.
So Amazon reducing consumer prices is in effect a wage hike for everyone.
And this same dynamic explains why wage growth has slowed since 1970. Social welfare spending has increased on average 4.8 percent per year between 1972 and 2011:
This was one of the most rapid expansions of social democratic policies in human history. This transformation from a more market-oriented economy to a more politically directed one had the predictable effect of reducing labor productivity growth, which evidence shows was the primary cause of the slowdown in wage growth:
In other words, we need MORE profit-motivated capital investments and companies like Amazon flourishing, not less. The seemingly miracalous advancement of income and quality of life since 1800 was because of breakneck rates of industralization. Change, in this context, is good, and anti-capitalist policies that reduce the expansion of capital are bad.
This is fine if you're spending all your money on junk ordered through the mail, which admittedly is a perk. Not so great for paying rent, attending college, or going to the hospital.
Pushing back comparisons to the 16th, 17th, or 18th century will produce a flattering comparison, and people should be aware of how much things have improved since then, but in a conversation about Amazon it's not relevant. Companies like Amazon and Walmart have led to monopsony (buyer advantage) dynamics that have gutten communities, stifled innovation, and led to stagnant wages. The issue is that these companies wind up not just competing on their own comparative strengths, but take advantage of their size and market advantage. I notice you're not singing the praises of, for example, Spectrum (formely Time Warner), because the obvious market power and complete lack of competence or innovation in that sector is hard to talk around. Amazon's Bezos is actually pretty savvy, and Amazon leads to some lower prices for consumers and occasional innovation, so the damage to competition in various markets is easier to ignore. But these companies are dangerous, in that they can turn market power and cash in hand into political power, and they do. Size matters.
>>This is fine if you're spending all your money on junk ordered through the mail, which admittedly is a perk. Not so great for paying rent, attending college, or going to the hospital.
It's not all "junk" on Amazon. Trivializing the range of products that have become more affordable thanks to Amazon, as "junk", is a massive case of taking for granted what you have.
If you're low income, and the knob on your washing machine breaks, you can get a replacement part for $20 and a minimal cost in time/effort, where in the past you would simply forego getting it, because it would involve a huge amount of time/effort, and $80, which you don't have.
If you're not wealthy, and want to start a web business, AWS's EC2 instances make it far more convenient and low cost than it was in the past. This makes entrepreneurship accessible to far more people.
I would go as far as calling your characterization of what they sell as "junk" as being disingenuous. It's deliberately trivializing what these retailers offer in order to maintain your canned anti-corporate-giant narrative.
Especially when you consider that Walmart sells groceries too. Are you going to claim affordable groceries are "junk" too, or resort to another feat of mental gymnastics to discount the benefit it confers to people?
>>Companies like Amazon and Walmart have led to monopsony (buyer advantage) dynamics that have gutten communities, stifled innovation, and led to stagnant wages.
Neither Amazon nor Walmart have monopsonies. They both face intense competition, particularly Amazon. In fact, they both compete against each other in the ecommerce market!
They both have successfully improved supply chain efficiency through technonological innovation which has enabled them to reduce the cost to consumers.
Like I just explained: lower consumer prices is effectively a wage hike. When people need to spend less on consumer items, they can afford to buy more consumer items, or they have more left over for what you allege is the only things that matter: "paying rent, attending college, or going to the hospital".
>>The issue is that these companies wind up not just competing on their own comparative strengths, but take advantage of their size and market advantage.
Yes, they take advantage of economies of scale, and that does have the potential to lead to sub-optimal outcomes in the long run, where competitors with better technology and processes cannot effectively compete due to lack of scale.
But it can't be denied that right now, Amazon is successfully increasing the efficiency of the supply chain through infrastructure build out and technological innovation, and that this efficiency is resulting in lower consumer prices, which in turn is increasing the effective wages of workers. You yourself seemed to have acknowledged this earlier, but then found a way to dismiss its relevance to quality of life by characterizing what they sell as "junk".
66 comments
[ 3.1 ms ] story [ 140 ms ] thread"Six years ago, before the company opened a giant fulfillment center in Robbinsville, New Jersey, warehouse workers made $24 an hour on average, according to BLS data. Last year the average hourly wage slipped to $17.50."
Guess what? Low-skill immigrants have a similar effect on local economies. But it doesn't mean that those workers are "stealing" higher paid jobs. Seems likely to me that those higher paying jobs are still there, and it's just the average that's gone down.
Sadly, the author doesn't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided.
Disclosure: I donate to progressive efforts in this space to drag the minimum wage up, which has not kept pace with inflation for many years.
Thread topic for another day.
Yes, agreed.
> properly tax the wealthiest and their wealth/assets.
Accounting gimmicks don't solve scarcity. You could expropriate all the wealth in the world, it wouldn't feed people for a year. You can't eat money.
> Thread topic for another day.
It is directly relevant to this discussion of the cost of labor and the standard of living that a laborer can expect.
> You could expropriate all the wealth in the world, it wouldn't feed people for a year. You can't eat money.
The wealth exists. Tax it. This isn’t about monetary inflation (as your quote attempts to conflate with wealth), it’s about redistributing existing and future wealth (not just income, wage and equity alike).
Bezos' wealth is in amazon infrastructure/capital goods which delivers consumer goods to millions of people a day, and crucially, cannot be converted to food. How are you proposing to transform the market capitalization of amazon into a higher standard of living for the average person?
> Many developed countries have a reasonable minimum/living wage,
According to whom? I'm sure there are millions of wage laborers in those countries who would prefer to make more money and consider their preference to be entirely reasonable. Workers in the United States have a reasonable living wage, therefore nothing need change.
> World’s smallest violin.
Right, read an economics textbook please. People can't eat money.
(responding to your edit)
> The wealth exists. Tax it.
So return on investment goes down, which lowers marginal profitability, meaning fewer firms are solvent. Then people have fewer places to work and fewer places to buy goods. People who worked at those businesses are now out of work so the few remaining businesses have more labor to choose from, justifying them paying even less. Everyone who doesn't get a job can just get public assistance, meaning they aren't contributing with their labor but they still bid for goods, causing the price of goods to go up. Thats a terrible idea.
> This isn’t about monetary inflation (as your quote attempts to conflate with wealth),
Per Krugman, monetary inflation is intended to drive down real wages.
> it’s about redistributing existing and future wealth
You can redistribute it so people can have a higher standard of living momentarily by purchasing consumption items. Thats exchanging capital for consumer goods, which results in a lower standard of living over time because there is less capital. Additionally the profits from those sales of consumer goods accrue to the people who still hold productive capital, i.e. the wealthy. You're describing a process that causes the rich to get richer and the poor to get poorer.
>more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time.
In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.
If we could set aside the suffering of the individual (which we cannot) one solution would be to let these companies devolve until they are entirely staffed by starving homeless people and see how that effects the productivity of their workforce.
If Amazon could staff their warehouses with homeless people, let them sleep on-site and only pay them in expired goods, they probably would.
It feels way too close to a probable future for my tastes...
Because the workers do not have any better option, and working for amazon while making 80% of your required expenses, is better than making 0%. It's the same reason why workers in developing countries work in sweatshops. The working conditions might be terrible, but starving in your village is worse.
>If we could set aside the suffering of the individual (which we cannot) one solution would be to let these companies devolve until they are entirely staffed by starving homeless people and see how that effects the productivity of their workforce.
This doesn't make any sense. Just because someone's homeless doesn't mean they're unproductive workers. eg. if they were living paycheck to paycheck and they were laid off. Besides, if the applicant pool is big enough and there are more job seekers than positions available they can have their pick of workers. For your scenario to work you'd need need enough people willing to boycott amazon as an employer, and given the history of consumer boycotts I doubt it will work. I'm sure amazon raising their wages a few dollars will convince enough workers to break rank.
This actually makes a lot of sense and is a new paradigm for analysis, thank you.
I think you mean "taxpayer"
> In other words, Amazon is costing you, the taxpayer, money by not paying their workers a living wage.
Imagine how much assistance they would need if they didn't have jobs.
> living wage.
what constitutes a "living wage" is dependent on the cost of consumer goods which is in turn dependent on the cost of labor. You're not going to escape the fact that some people's labor isn't worth enough to earn them the standard of living that you or they would prefer by wishful thinking or statutory fiat. You can, however, limit their options and distort the market in a vicious circle of economically ignorant mandates.
That would be better.
I would MUCH rather pay for them to be in school instead of just paying part of Bezos' and other Amazon investors operating costs.
Shit I wish I could have a buch of employees and get someone else to pay for them. What a great idea! Why doesn't everyone do that? I mean except for the employees of course. They can't have companies staffed by employees they don't pay for. Duh. Only Amazon and Walmart can have that, obvs. I mean who would be their employees? You? Not me. I guess we need something like a seperate class or group of people who have to be the underpaid employees so that the rest of us can enjoy being the employers without paying for it. We used to have that back in the good old days...
It's almost like this is a stupid argument that there is no way to excuse, and no amount of indirect smoke & mirrors or denial gets around that, and anyone even trying deserves to be among the first people rounded up for the new press gangs they think are so fair a great.
Not for them or for the economy at large. It would be good for people who own capital goods, as they would spend their assistance checks on consumer goods without competing to provide them. The profit would accrue to the few who hold capital and those capitalists would have an enormous supply of reserve labor available, driving down the marginal cost of labor (so the people who did have jobs would have less bargaining power).
> I would MUCH rather pay for them to be in school instead of just paying part of Bezos' and other Amazon investors operating costs.
Thats interesting, how many people can you currently afford to feed, house, and pay tuition for?
> It's almost like this is a stupid argument that there is no way to excuse, and no amount of indirect smoke & mirrors or denial gets around that, and anyone even trying deserves to be among the first people rounded up for the new press gangs they think are so fair a great.
It may seem that way to you. Actually what we have is a bunch of people who are ignorant of economics but still have opinions about how the economy should be run, and a class of politicians who appeal to their ignorance by selling them fairy tales that ignore scarcity and appeal to wishful thinking.
It’s wages chasing price chasing wages. And we need more and more food for exponentially increasing population with a smaller work force and lesser land. Only solution is to eliminate such jobs and automate field Ag.
And grow indoors as much as possible. Indoor Ag can increase productivity, use less land and water and also can employ workers from an educated pool because automation requires some skill. So we are also tackling unemployment instead of exploiting poor undocumented immigrants and paying them slave wages.
I see amazon warehouse jobs with low pay the same as farm workers doing repetitive manual work. Automate. Automate. Automate.
Those pesky abolitionists apparently missed that too. Don't you think they'd have given up had they realized what emancipation would have done to the price of their clothing?
Not really. It's just a snarky illustration that there's more to consider than effects on consumer prices.
> It's just a snarky illustration
It's an illustration that familiarity with a subject is not a prerequisite for arrogant pontification.
Sadly, you don't seem to realize that those wages come out of the pocket of the consumer. Lower the cost of labor and you lower the cost of the good that is provided. Why not lower those costs to the minimum? /s
Also, a wage laborer who opts out of the wage labor system will likely end up just as dead as a slave who tries to opt out of the slave system. The "voluntariness" of wage labor isn't quite the panacea is seems to be, when you realize many people are given the choice between one or more shitty jobs or no job at all.
Not sure why you feel that an /s tag is necessary. Why not make your point in plain terms so people can read, understand, and respond?
> Also, a wage laborer who opts out of the wage labor system will likely end up just as dead as a slave who tries to opt out of the slave system.
Yes, however one will be murdered for his refusal to be a slave, whereas one will starve to death or die of exposure for his failure to produce food and shelter. There is no equivalence between being murdered and the natural result of failing to work for food and shelter.
> The "voluntariness" of wage labor isn't quite the panacea is seems to be,
Its not a "panacea," merely a matter of basic human rights that someone should be allowed to choose where to work (or if they want to work at all).
> when you realize many people are given the choice between one or more shitty jobs or no job at all.
They are given as many choices as there are other people offering deals. That they need food and shelter to live is a fact of nature, not something capitalists invented so as to replace slavery.
It's a panacea in the sense you seem to see that ritualized choice as a cure for whatever negatives are implicit in all the choices presented, and thus a license to ignore them.
To tie things back to the beginning, you reacted to a story about the decline in many people's standard of living with a rather tone-deaf observation that some other people will benefit from that decline. Maybe you should consider that decline they experience a little more thoughtfully.
I was merely responding to your attempt to conflate slavery with a voluntary agreement.
> To tie things back to the beginning, you reacted to a story about the decline in many people's standard of living with a rather tone-deaf observation that some other people will benefit from that decline. Maybe you should consider that decline they experience a little more thoughtfully.
I observed that the suggested solution to the decline in standard of living would not have the desired effect. At no point have you challenged this observation, which suggests that you have no reason to dispute it. Several times now, you have displayed a poor attitude, which is well within your rights as a human being but suggests you don't have anything to offer to move the discussion forward.
> Maybe you should consider that decline they experience a little more thoughtfully.
Sure, why don't you do the same? I suggest reflecting on the economic realities of scarcity and the labor-multiplying effect of capital.
...and apparently missing the actual point in the process.
A simple search contradicts your claim: nytimes says: "A pair of Levi's 501 jeans cost $50 in 1998, and $46 in 2008"[1]
>Same thing with colleges. Low wage adjuncts as far as the eye can see, but higher education has never been more expensive.
The problem here are price insensitive consumers given tons of free money by the government (in the form of guaranteed student loans, regardless of ability to pay back). If you were given the gift of one free TV of your choice (valued up to $2000), your purchasing decision would be very different than if you were simply given $2000 in cash.
[1] https://www.nytimes.com/2008/05/29/fashion/29PRICE.html
> The vast majority of states adopted new high-stakes teacher evaluation systems between 2011 and 2016.
> We find that high-stakes evaluation reforms reduced the supply of newly licensed teachers by 16 to 18%.
> Evaluation reforms increased the probability a school had at least one unfilled teaching vacancy with effects concentrated in traditionally hard-to-staff schools.
> Evaluation reforms also increased the quality of new teachers by decreasing the supply of teachers coming from less competitive undergraduate institutions.
https://www.sciencedirect.com/science/article/abs/pii/S00472...
Almost half the state budget goes to schools. Ave 70% of school budget goes to staff and teachers salaries. There are Union negotiated raises every single year. And their last drawn salaries as pension for the rest of their lives.
All school districts are distributed funds with a LCFF formula where in all the school budget monies goes into a big pot and redistributed according to need and not according to property tax collected.
California decided that school budget shouldn’t be decided based upon whether it’s an affluent district or not. And hence the redistribution . Who gets the most? If there are homeless students, ESL parents/students, below poverty line, special Ed , inner cities etc. Why? Because sometimes you need teachers who are bi lingual. Counselors, school security, special Ed teachers etc all need more budget. Even if there is one student with special needs, the school has to hire staff.
Schools have gotten creative to get funding. For example..in my medium affluent Bay Area district, spending per student is less than 10k/student. It’s less than average. With a large Asian population, many kids..even though they are American and their immigrant parents can speak English..will be streamed into ESL. Some kids who stay with their grandparents or a home under a trust with utilities in grandparents names are considered ‘homeless’ so they can boost numbers. In California, if someone is homeless, they don’t have to provide proof of their status and schools cannot turn down their children for admission. The more students they can show as needing special Ed, they can avail more funds. They can even apply for federal grants and funds. It’s the only way because the funds meant for our schools is redistributed to rest if Ca.
There is another Bay Area school with no swimming pool. So the city voted to pay parcel tax to fund the swimming pool and gym. Then the union wanted to tap into that fund to increase teachers pay. But it’s an earmarked bond and by the time the dust settled, the construction estimates had doubled and the bond money is no longer sufficient. The parents who voted for the parcel tax have their kids in college and still no pool. I am not talking 2-3 years. This is almost 8-9 years.
Teachers do get lower salaries than the average tech worker(Altho on average equal to or more than other professionals) but they get their last pay as pension. Unions negotiate it that way. In a way, unionized teachers are to teachers unions what San Francisco’s homeless population is to politicians. If there is no grievance, they have no reason to represent them and to exist. CTA is involved in a lawsuit because they enroll teachers into union with or without their consent to show membership numbers.
Nice school districts don’t pay their teachers more. They pay less than bad school districts. Because they don’t have enough ‘special needs’ to justify a larger share of the formula. In nice affluent cities, main streets are filled with tutorial centers and kumon and test prep centers and more. They are the best business to run in California Bay Area.
With high density housing becoming mandatory at the risk of cities being sued and fined, schools are getting overcrowded. You hear stories of children having to choose between having lunch and standing in line to go to the restrooms because there aren’t any. And because construction is also unionized, the cost of one extra class room in California is $1-1.5 million.
https://www.constructiondive.com/news/making-the-grade-why-s...
Also: [..] 1024 ...
The problem though is that the redistribution of funds meant for school budgets do not go just for children’s education. There is no oversight. There is no accountability. There is not even postmortem forensics after they kill our children’s education. It goes mostly towards non teaching staff salaries and pensions(usually the big fish in any school district makes no less than 350k. All public sector salaries available at transparentcalifornia website). The teachers pensions are also part of this. Do remember that the last salary drawn is pension paid for life. They don’t collect SSN checks which are capped. Unions muck it up further. It’s not like parents can sit in during these Union negotiation meetings even though it is the taxpayer who funds and pays for this entire circus.
The actual budget meant for children’s education gets smaller and smaller. Programs get cut, buildings are dangerously outdated, parents have to keep raising money for teachers and when the school district says Jump!, the only right response is How High?
If the school district superintendent gets 350k and the teachers only make 120k, that’s internal to them. It’s between management, teachers and their unions ..and they have to manage the pensions of all the teachers who have already retired, that’s not what education is about...we are not paying for education but for mismanagement of school budget and tax monies.
Why should parents and children get the short end of the stick? Why do tax payers who in good faith believe that the taxes are going to educate every child in California have to be blindsided by politics of unions and their internal conflicts and collusions. It is a betrayal of trust. And it’s expensive.
The major part of any school MUST be the salaries of the teachers as it is...significant part of the budget goes to paying teachers at the detriment of children’s education and building safety etc. and yet, it’s never enough. Probably because we are also covering their unfunded pension liabilities.
And that’s why LCFF was instituted so we’d never be able to trace back what portion of what taxes goes to pay whom..and California’s budget deficit is solely due to unfunded pension liabilities and gross mismanagement of tax revenue to patch every leak in the big ship called Big Gov in Sacramento.
To learn more, the latest here:
2020: https://www.latimes.com/business/story/2020-08-06/calpers-pe...
2019: https://www.latimes.com/opinion/editorials/la-ed-supreme-cou...
https://californiapolicycenter.org/californias-state-and-loc...
2016: https://www.latimes.com/projects/la-me-pension-unfunded/
https://www.latimes.com/projects/la-me-pension-crisis-davis-... (Most comprehensive investigative piece)
2013: https://www.city-journal.org/html/pension-fund-ate-californi...
https://reason.org/wp-content/uploads/files/...
Middle class warehouse career?
As a former member of the warehouse class, this article is complete bullshit.
Turns out that focusing only on the cost to the customer means the majority of people work shitty jobs just so they can buy slightly cheaper stuff from other people working shitty jobs. You have to wonder, maybe what's best for people is to pay slightly more for everything and get better jobs all around instead. Even if purchasing power goes down as a result, a slightly more enjoyable 8 hours could well be worth the tradeoff because we spend most of our waking hours working.
If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.
> If the decreased efficiency anx higher costs were born by the company (i. e mgmt and shareholders) instead of consumers, costs wouldn't necessarily need to go up either.
Doubtful. There's not much juice to squeeze from mgmt and labor. Have you looked at returns relative to investment recently?
I think I missed where you explained how to do this.
then the company would produce less, so they would have less product to sell, leading to a decrease in revenue and therefore a decrease in wages. I'm not sure why this would be a good idea.
It's through this dynamic that wages have grown 20 fold, in inflation adjusted terms, since 1820. Companies finding ways to reduce costs is how that happened.
So Amazon reducing consumer prices is in effect a wage hike for everyone.
And this same dynamic explains why wage growth has slowed since 1970. Social welfare spending has increased on average 4.8 percent per year between 1972 and 2011:
https://fivethirtyeight.com/features/what-is-driving-growth-...
This was one of the most rapid expansions of social democratic policies in human history. This transformation from a more market-oriented economy to a more politically directed one had the predictable effect of reducing labor productivity growth, which evidence shows was the primary cause of the slowdown in wage growth:
http://www.brookings.edu/research/opinions/2014/12/22-source...
In other words, we need MORE profit-motivated capital investments and companies like Amazon flourishing, not less. The seemingly miracalous advancement of income and quality of life since 1800 was because of breakneck rates of industralization. Change, in this context, is good, and anti-capitalist policies that reduce the expansion of capital are bad.
Pushing back comparisons to the 16th, 17th, or 18th century will produce a flattering comparison, and people should be aware of how much things have improved since then, but in a conversation about Amazon it's not relevant. Companies like Amazon and Walmart have led to monopsony (buyer advantage) dynamics that have gutten communities, stifled innovation, and led to stagnant wages. The issue is that these companies wind up not just competing on their own comparative strengths, but take advantage of their size and market advantage. I notice you're not singing the praises of, for example, Spectrum (formely Time Warner), because the obvious market power and complete lack of competence or innovation in that sector is hard to talk around. Amazon's Bezos is actually pretty savvy, and Amazon leads to some lower prices for consumers and occasional innovation, so the damage to competition in various markets is easier to ignore. But these companies are dangerous, in that they can turn market power and cash in hand into political power, and they do. Size matters.
It's not all "junk" on Amazon. Trivializing the range of products that have become more affordable thanks to Amazon, as "junk", is a massive case of taking for granted what you have.
If you're low income, and the knob on your washing machine breaks, you can get a replacement part for $20 and a minimal cost in time/effort, where in the past you would simply forego getting it, because it would involve a huge amount of time/effort, and $80, which you don't have.
If you're not wealthy, and want to start a web business, AWS's EC2 instances make it far more convenient and low cost than it was in the past. This makes entrepreneurship accessible to far more people.
I would go as far as calling your characterization of what they sell as "junk" as being disingenuous. It's deliberately trivializing what these retailers offer in order to maintain your canned anti-corporate-giant narrative.
Especially when you consider that Walmart sells groceries too. Are you going to claim affordable groceries are "junk" too, or resort to another feat of mental gymnastics to discount the benefit it confers to people?
>>Companies like Amazon and Walmart have led to monopsony (buyer advantage) dynamics that have gutten communities, stifled innovation, and led to stagnant wages.
Neither Amazon nor Walmart have monopsonies. They both face intense competition, particularly Amazon. In fact, they both compete against each other in the ecommerce market!
They both have successfully improved supply chain efficiency through technonological innovation which has enabled them to reduce the cost to consumers.
Like I just explained: lower consumer prices is effectively a wage hike. When people need to spend less on consumer items, they can afford to buy more consumer items, or they have more left over for what you allege is the only things that matter: "paying rent, attending college, or going to the hospital".
>>The issue is that these companies wind up not just competing on their own comparative strengths, but take advantage of their size and market advantage.
Yes, they take advantage of economies of scale, and that does have the potential to lead to sub-optimal outcomes in the long run, where competitors with better technology and processes cannot effectively compete due to lack of scale.
But it can't be denied that right now, Amazon is successfully increasing the efficiency of the supply chain through infrastructure build out and technological innovation, and that this efficiency is resulting in lower consumer prices, which in turn is increasing the effective wages of workers. You yourself seemed to have acknowledged this earlier, but then found a way to dismiss its relevance to quality of life by characterizing what they sell as "junk".
Now, Amazon joins the clout