Bit confused why i keep seeing my leftist friends post graphs and stats comparing minimum wage and productivity in America.

gains in productivity are due to both automation of tasks of workers and computers/internet.

While i can see the argument that requirement skills for computer work necessitate a general pay raise they also largely are replacing analog skills. programs on computers replace accounting knowledge, shipping knowledge, and many other skills that workers needed on hand pre-computers in the workplace.

and automating tasks makes the workers job easier, and by proxy makes the worker less valuable to the overall production. even with R&D loopholes for automation (a thing im entirely against) companies still spend money to put those machines in place. costs that in theory are spent in lieu of pay raises to an extent.

inflation as a rate of min wage increase makes sense, entirely. even without taking accounting in the picture, companies make a profit and inflation is slow enough not to break the economy. but production as a benchmark for min wage increase doesnt just seem nonsensical, but self defeating as an argument.

The reason is because you often see the argument made that businesses can't afford to raise the minimum wage, so when you show that the average worker is producing many more dollars for their company than they were before that's a refutation of that talking point.

Like, I'm producing $20 an hour in 1970, and now I'm producing $50 an hour. You can afford to increase my pay by a factor of 2.5 and retain the same % profit.

yes but productivity and profit arent the same thing. if these graphs were linked to corporate profits i'd understand, inflation i really understand, productivity calculations are always going to be skewed by gains in technology. especially given the internet revolution, where products can be now created in a virtual space with no raw materials used. comparing 1910s where goods were wood, leather, and steel to the 2010s where many goods are phone calls, apps, and such is nonsensical.

I've usually seen the graph as median worker pay vs productivity, not minimum wage, and the productivity as measured in dollars produced for the employer.

Still, as our productivity increases we can afford to provide a higher minimum standard of living, but that isn't happening because of how the minimum wage and median wage have diverged from productivity. It highlights an issue of distribution.

This post was edited by Thor123422 on Feb 17 2021 02:46pm

ive been seeing graphs without sources, but "overall productivity" listed. which i assume means essentially gross not net income of american companies large and small. elsewise why not call it profits, as thats what net is. no one calls profits production.

If it's not showing profits then yeah, it's not a good argument. Usually I see something like this



which is used to highlight that wages are not keeping up with productivity and the money is mostly funneling to the top.

The assumption is that there's an endless supply of people who can and are willing to pay for employment. People expect that they have a right to a job. Why? A job is entirely related to what you can produce.

At this point, the only reason McDonalds and such exist is because they already exist. The venture capitalist of the future is going to invest in a chain of completely automated restaurants that require a single technician on staff at any time to keep the machines working. Even the loading of product into the machines can be automated.

So then the people will say, "But somebody has to make the machines!" Nope, most of the machines are produced and assembled by other machines.

So then the people will say, "But somebody has to design the machines!" Correct. But if you displace 13 million food service industry workers in the US, how many of those can get a job designing machines? Let's even say that maybe a million jobs could be carved out for them, what about the rest?

Using modern tools, technology, and practices, 1 farmer with 10 acres of land can produce enough food to feed close to a thousand people. Why is farming not a process that requires thousands of free workers or slaves? Because it's not. We're past that.

The automation and increased efficiency of production is amazing, and gets totally wild when taking 3D printers into account. But it does not support a hike in minimum wage. Instead, a hike in minimum wage increases yet further automation and efficiency of process to reduce labor.

Moving forward, some form of UBI is likely. How soon? Dunno! But once the means of production have become so efficient and automated that there are more people than reasons to have those people, the options are to let the unneeded people starve, or to utilize the improved production to support them in spite of their lack of productivity. Yang had many great points to make regarding UBI, as did Gabbard. The raising of the minimum wage to double, in some areas, what it currently is? Is simply an attempt to accelerate to that end goal of UBI and useless people getting paid to be useless.

yes but even on that graph it doesnt seem to calculate increased costs controlled for productivity.

like dont get me wrong, im not saying corporations arent reaping profits. but i still think workers today provide a lot less than they did in say the 1970s and before per capita due to automation/computers.

the real crime is that profits arent shared in almost all pay models, corporations are just lucky that others invented ways to automate. u should hear some of these corporations i work with, fortune 100 companies that dont even know what they need to increase production. they're run by idiots.

this simply isnt true. almost all machines in the automation industry are fabricated partially by hand and assembled by hand. sure lazers and waterjets and cnc punches/lathes are used, but every part more or less is handled by hand in fab. and hand assembled.

99% of the automation industry isnt Tesla with robots.

My assumption is that "worker productivity" is basically profit/worker.

A worker using a computer is producing far more than a worker in the 70's. Just because a worker is using a tool doesn't mean the worker isn't producing using the tool. When I use a fancy instrument to get a measurement in an hour rather than a week, I'm producing a lot more even after you factor that the instrument cost 100k, since that 100k is spread over the lifetime of the instrument.