Living Wages and Wage Slavery

[WinePusher]

I read a post on this forum that referenced the concept of living wages and it got me thinking. So, here's a thread about it:

1) Should the government impose a living wage standard? In other words, should the government impose a minimum wage? Are minimum wages and living wages the same thing?

2) Is the concept of wage slavery correct and legitimate?

3) If someone does not make enough money to take care of themselves and their family, what should be done?

[Furrowed Brow]

Look at it this way. Walmart and many of the other companies are going to pay close to minimum wage for their employees. We either up the minimum wage, or subsidize the big corp work force with food stamps payed by the government, because the people can't live on that money.

Which would you prefer/

Neither. Honestly, does anyone posting in this thread know anything about labor economics? The primary reason why Wal-Mart and many other companies pay low wages is because they are providing low skilled jobs.

Yes we know that.

The business model adopted by the likes of Wal-Mart is sustained by the owners of Wal-Mart because it perpetuates a huge inequality they personally and greatly benefit from, but at a direct cost to the worker and to society. They the owners have decided that their share of the surplus valued generated by Wal-Mart is thousands of times more than any of their basic workers, without regard to the standard of living this affords the worker. Goat has already given the example of Costco a comparable company that does far better than Wal-Mart on nearly all metrics accept it pays the bosses a lot less and its employees a lot more than Wal-Mart. Why do Wal-Mart not adopt the Costco model I wonder?

Nearly anybody can work for Walmart, meaning that the supply of workers exceeds Walmart's demands for workers.

Yes we know that. And it is because of that that Wal-Mart can exploit the surplus.

This results in a lower price (wage). This is not a free market ideology, this is mainstream neoclassical theory regarding labor markets that the majority of economists accept. When you increase the price of labor (wages) without any corresponding increase in productivity, the firm will hire less or increase prices.

This is only true for firms hell bent on enriching its owners at the expense of the worker. There are plenty of examples of successful companies with much more socially minded ethos, but these remain in the minority and therefore legislation is required.

As for neoclassical economic theory - besides from the studies that shows classic expectation regarding minimum do not bear out, and that its assumptions are unreasonably idealist, i.e. people never have full and relevant information, and on the whole they mostly do not behave rationally (hence advertising and propaganda), and that there are plenty of mainstream economist who support the idea of a minimum wage, and that classical theory is just not critical of capitalism and thus fails to think outside the box...even if then after all that ...IF...you were right and there are just some hard mathematical rules to the price of labour that cannot be avoided within the capitalist system then - given the poverty trap it creates - this is an argument to tear up capitalism.

Besides, we should be focusing on how to develop human capital and how to get people into better jobs.

Not of it means we ignore the perpetual inequality....no we shouldn't. Helping people out of the dirty boiler room does not mean there will not always be people trapped down there. We need to make the conditions and pay of the boiler room liveable or the ship ain't worth preserving.

AND: humans are human beings not capital. Any system of thought that sees human beings as capital dehumanises them and why should we give room to an ideology that does that. This is the nub of the issue.

[Nickman]

This sounds like a great business opportunity. If this is true, then maybe you should start your own business or become a CEO and do this redistributing. Then the brightest and best will be working for you and you will drive Walmart out of business.

Why say anything about the "best and brightest?" What does that have to do with anything?

[Goat]

Look at it this way. Walmart and many of the other companies are going to pay close to minimum wage for their employees. We either up the minimum wage, or subsidize the big corp work force with food stamps payed by the government, because the people can't live on that money.

Which would you prefer/

Neither. Honestly, does anyone posting in this thread know anything about labor economics? The primary reason why Wal-Mart and many other companies pay low wages is because they are providing low skilled jobs.

Yes we know that.

The business model adopted by the likes of Wal-Mart is sustained by the owners of Wal-Mart because it perpetuates a huge inequality they personally and greatly benefit from, but at a direct cost to the worker and to society. They the owners have decided that their share of the surplus valued generated by Wal-Mart is thousands of times more than any of their basic workers, without regard to the standard of living this affords the worker. Goat has already given the example of Costco a comparable company that does far better than Wal-Mart on nearly all metrics accept it pays the bosses a lot less and its employees a lot more than Wal-Mart. Why do Wal-Mart not adopt the Costco model I wonder?

Nearly anybody can work for Walmart, meaning that the supply of workers exceeds Walmart's demands for workers.

Yes we know that. And it is because of that that Wal-Mart can exploit the surplus.

This results in a lower price (wage). This is not a free market ideology, this is mainstream neoclassical theory regarding labor markets that the majority of economists accept. When you increase the price of labor (wages) without any corresponding increase in productivity, the firm will hire less or increase prices.

This is only true for firms hell bent on enriching its owners at the expense of the worker. There are plenty of examples of successful companies with much more socially minded ethos, but these remain in the minority and therefore legislation is required.

As for neoclassical economic theory - besides from the studies that shows classic expectation regarding minimum do not bear out, and that its assumptions are unreasonably idealist, i.e. people never have full and relevant information, and on the whole they mostly do not behave rationally (hence advertising and propaganda), and that there are plenty of mainstream economist who support the idea of a minimum wage, and that classical theory is just not critical of capitalism and thus fails to think outside the box...even if then after all that ...IF...you were right and there are just some hard mathematical rules to the price of labour that cannot be avoided within the capitalist system then - given the poverty trap it creates - this is an argument to tear up capitalism.

Besides, we should be focusing on how to develop human capital and how to get people into better jobs.

Not of it means we ignore the perpetual inequality....no we shouldn't. Helping people out of the dirty boiler room does not mean there will not always be people trapped down there. We need to make the conditions and pay of the boiler room liveable or the ship ain't worth preserving.

AND: humans are human beings not capital. Any system of thought that sees human beings as capital dehumanises them and why should we give room to an ideology that does that. This is the nub of the issue.

I think part of the problem that I see is that economists quite often look to the economy only from the viewpoint of businesses. Society is more than corporations. Society , first and foremost is made up of PEOPLE. Quite often, economists fail to see that it is the PEOPLE that matter, not the corporations.

If someone is less skilled, or not as educated.. does that make them less of a person?

Is society only for the benefit of the rich and the corporations?

[Furrowed Brow]

I think part of the problem that I see is that economists quite often look to the economy only from the viewpoint of businesses. Society is more than corporations. Society , first and foremost is made up of PEOPLE. Quite often, economists fail to see that it is the PEOPLE that matter, not the corporations.

I thinks it is more that they are focused on the system, but this system inherently sees living breathing people as a cost that detracts from profits. When the focus is on the creation of profit and productivity etc. then that implicitly sides with the capital owner and the corporation, as these tend to be the major beneficiaries of capitalism.

If someone is less skilled, or not as educated.. does that make them less of a person?

Certainly not. But the capitalist society will inevitably value them less, and folk wedded to that kind of ideology will also value them less.

Is society only for the benefit of the rich and the corporations?

It depends on what ideology the society is built. But as some commentators are keen to point out we get where we are as the results of our choices, and the ideology we live under is also a choice. We can answer your question "no" and look for ways to help everyone benefit, or we can ignore the question and let the markets decide.

[Nickman]

Is society only for the benefit of the rich and the corporations?

According to our current laws, corporations are people. That is why the top 2% of our American economy owns more than 45% of the cumulative wealth in America. Corporations pay politicians more than tax payers do, and that is why politicians listen to Corporations instead of us. Tax payer dollars are just a normal wage for them. The incentives they receive outweigh our tax payer dollars. So why pay employees more than a fraction of their profit.

See this video

[youtube][/youtube]

[bluethread]

This sounds like a great business opportunity. If this is true, then maybe you should start your own business or become a CEO and do this redistributing. Then the brightest and best will be working for you and you will drive Walmart out of business.

Why say anything about the "best and brightest?" What does that have to do with anything?

Well, if you think this business plan is better regardless of who the employees are, why don't you just do it?

[WinePusher]

Neither. Honestly, does anyone posting in this thread know anything about labor economics? The primary reason why Wal-Mart and many other companies pay low wages is because they are providing low skilled jobs.

Yes we know that.

The business model adopted by the likes of Wal-Mart is sustained by the owners of Wal-Mart because it perpetuates a huge inequality they personally and greatly benefit from, but at a direct cost to the worker and to society. They the owners have decided that their share of the surplus valued generated by Wal-Mart is thousands of times more than any of their basic workers, without regard to the standard of living this affords the worker.

The reason why there is income inequality between Walmart executives and Walmart employees is because Walmart executives are more skilled than Walmart employees. I already explained this. Jobs that require more skill pay out more than jobs that require less skill. And this is somehow unfair in your mind? If I bust my butt for 6+ years studying business, management and marketing then I deserve to be payed more than some cashier and floor worker.

Nearly anybody can work for Walmart, meaning that the supply of workers exceeds Walmart's demands for workers.

Yes we know that. And it is because of that that Wal-Mart can exploit the surplus.

No, it's because the corporate executives and managers contribute more to generating the surplus value than ordinary workers do. Since the executives and managers play a more vital role in the creation of the surplus value they are obviously entitled to a larger portion of it.

As for neoclassical economic theory - besides from the studies that shows classic expectation regarding minimum do not bear out, and that its assumptions are unreasonably idealist, i.e. people never have full and relevant information, and on the whole they mostly do not behave rationally (hence advertising and propaganda), and that there are plenty of mainstream economist who support the idea of a minimum wage, and that classical theory is just not critical of capitalism and thus fails to think outside the box...even if then after all that ...IF...you were right and there are just some hard mathematical rules to the price of labour that cannot be avoided within the capitalist system then - given the poverty trap it creates - this is an argument to tear up capitalism.

Capitalism has been the best way the alleviate poverty, and Capitalism has the best track record when it comes to poverty reduction. Your policies have been a disaster for the poor, especially the minimum wage policy. You impulsively assume that arbitrarily increasing wages via government laws will help the poor, but you don't look at any of the underlying consequences. Most of the people who work at minimum wage jobs are young adults and students. This is their first time entering the labor market and since they don't have to many skills they will get a bunch of jobs that pay horrible wages. But as time progresses these young adults work their way up the labor ladder and as they do their skills and productivity increase which results in their wages increasing.

But, by increasing the minimum wage you destroy all of these low skilled jobs that would otherwise be available. You make it harder for young people to enter the labor market gain on the job experience. Your policy might do some good superficially, but when you actually look deeper into the issue you would realize that minimum wages harms the poor. And honestly Furrowed Brow, in my world I don't want people to be working at Walmart for their entire life. I want to develop people's human capital in order to get them into better, more high paying jobs.

[McCulloch]

The reason why there is income inequality between Walmart executives and Walmart employees is because Walmart executives are more skilled than Walmart employees. I already explained this. Jobs that require more skill pay out more than jobs that require less skill. And this is somehow unfair in your mind? If I bust my butt for 6+ years studying business, management and marketing then I deserve to be payed more than some cashier and floor worker.

That is a reasonable justification for a gap in pay between experienced and educated executives and unskilled labor. You might reasonably argue that some executives actually earn one million or so dollars per year. Beyond that, I cannot see how what the executive does with his day can be truthfully said to earn the amounts paid.

[olavisjo]

.

That is a reasonable justification for a gap in pay between experienced and educated executives and unskilled labor. You might reasonably argue that some executives actually earn one million or so dollars per year. Beyond that, I cannot see how what the executive does with his day can be truthfully said to earn the amounts paid.

Look at Apple in the mid 90's, it was only months away from bankruptcy. Steve Jobs took over as interim chief executive and turned it into the world's largest company.

He created hundreds of billions in value, so how much is a person like that worth?

How about Lee Iacocca, Larry Page, Sergey Brin, Jerry Yang, Jeff Katzenberg, Larry Ellison, John Chambers, Vikram Pandit and John Mackey?

[Furrowed Brow]

.

That is a reasonable justification for a gap in pay between experienced and educated executives and unskilled labor. You might reasonably argue that some executives actually earn one million or so dollars per year. Beyond that, I cannot see how what the executive does with his day can be truthfully said to earn the amounts paid.

Look at Apple in the mid 90's, it was only months away from bankruptcy. Steve Jobs took over as interim chief executive and turned it into the world's largest company.

He created hundreds of billions in value, so how much is a person like that worth?

How about Lee Iacocca, Larry Page, Sergey Brin, Jerry Yang, Jeff Katzenberg, Larry Ellison, John Chambers, Vikram Pandit and John Mackey?

[irony]And all those billions Apple make was never siphoned off shore and into a hedge fund, and instead all that money was piled into creating jobs inside America, and Jobs was nothing like an autocrat[/irony].

But straight answer is how is anyone even a cult figure like Jobs worth more than ten times the lowest paid person in any business. A factor of ten is a massive difference. I think the actual we accept as a society comes a lot down to how were are primed and nudged to aspire to be "rich". We kind of wish mass fortunes upon people we see in the news and media because we are guided by the marketing and propaganda tools to wish these things for ourselves and project ourselves into that vision of life, whilst also marshalled away from thinking to deeply about the workers throwing themselves of the roofs of the factories manufacturing apple products, or the mass decline in real jobs that the arrival of companies like Apple heralds.

In reality the actual ratio of what one person gets over another is pretty much arbitrary in the sense that the present systems empowers the likes of Steve Jobs to more or less set their own ratio. But if Jobs had been limited to 10 to 1 ratio do you think he would have thrown his toys out the pram and stayed in bed, or would he have made sure the lowest paid worker got paid the maximum Apple could afford thus pushing up his own real earnings. Would he really have been less innovative on say $250,000 a year? I really don't think so. Would he have off shored jobs if it was not so lucrative for him to do so. Again likely not. Would Apple be in any weaker a position if the majority of that $80billion it has sitting around had been shared with all Apple workers, been kept on shore so tax was paid on it, leaving say just $5billion. True faced with such a measly remuneration of an income in the region of £250k Jobs may well taken his talents to another part of the world say China? He would certainly have been a lot closer Apple's manufacturing base.

Same point and the same ratio for the rest of those you list.