Workers wage not in proportion to productivity - Page 4 - Politics Forum.org | PoFo

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#14718951
Google is just coming up with some bullshit reason to pay their employees less. There's simply no way this data can be true. Let's take a very simplistic example, say in a stuffed toys factories, two worker stuff 10 toys a day while 5-6 workers stuff 6-7 toys, that is believable. But to say that 20 guys are stuffing 800 toys and 80 guys only 200 toys that is just beyond belief. And yes this applies to all sector, this 20% doing 80% work is simply too inane a data to believe. No one is saying that some are more productive than others but I am not going to believe this specific piece of data presented by google, simply put its just too silly.

Anyway I would be rather in that 5-6 workers group than that 2 super workers group, I just don't see any shame or whatever in it. :?: Why the heck should I care about my work or work more or harder for same pay.
#14718964
I think if they did change the way they do pay, yes it will save them money. What will happen is the pay of the lower performing workers will go down, and the pay of the higher performing will go up significantly, but because there are less of them, the net result will be less cost to Google.

The question then is, do high performing workers want to throw lower performing workers under the bus, or are they willing to leaving things as they are?
#14718980
According to Jacob Secker economics workers' wages are definitely not in line with productivity. As development economists like Arthur Lewis and Ha-Joon Chang point out people doing the same job with totally equal labour productivity in a western and a developing world country will get very different remuneration. Chang gives the example of a Scandinavian bus driver who would get about 5 times as much as an Indian bus driver, even when you take into account price differences.

Two factors cause wage differences in reality. First how rich your country is in terms of how much it can produce, which ultimately depends on the amount of capital available per worker. Secondly it depends on the bargaining power of the workers, so that they can actually buy what is being produced. This means the government has to set a decent minimum wage, unions and professional associations must argue for wages above this, individuals with sought after skills must argue on their own behalf etc. (If a country produces products with a high capital to labour ratio higher wage costs will not affect price too much and it will still be able to export-Trump take note!)

Throw out all your conventional economics: wages do not reflect the marginal productivity of labour in any deep sense.
#14718988
jacob.secker wrote:According to Jacob Secker economics workers' wages are definitely not in line with productivity. As development economists like Arthur Lewis and Ha-Joon Chang point out people doing the same job with totally equal labour productivity in a western and a developing world country will get very different remuneration. Chang gives the example of a Scandinavian bus driver who would get about 5 times as much as an Indian bus driver, even when you take into account price differences.

Two factors cause wage differences in reality. First how rich your country is in terms of how much it can produce, which ultimately depends on the amount of capital available per worker. Secondly it depends on the bargaining power of the workers, so that they can actually buy what is being produced. This means the government has to set a decent minimum wage, unions and professional associations must argue for wages above this, individuals with sought after skills must argue on their own behalf etc. (If a country produces products with a high capital to labour ratio higher wage costs will not affect price too much and it will still be able to export-Trump take note!)

Throw out all your conventional economics: wages do not reflect the marginal productivity of labour in any deep sense.


The Scandinavian bus driver earns a lot more because Scandinavia has other sectors in the economy which are very productive. Those sectors attract workers, making labor in "bus service" scarce, hence increasing the marginal product of labor in "bus service" and consequently the wages of bus drivers. If "bus service" were a tradeable good it could be imported from India, but it is not.

Physical capital is only one factor behind high productivity. If it were the only one, poor countries would catch up with rich countries in no time. Education, know-how, culture, institutions etc. all matter as well.

I think unionization does not generally increase wages (as far as I remember, could be wrong), but it does decrease inequality somewhat.

There are a wide variety of reasons why wages do not equal the marginal productivity of labor (can be higher or lower), but I also do not think they deviate far from it, or only temporarily. The exception are (high-level) executives. Their wages relative to the rest of the workforce have risen tremendously in the past decades and there's no rational explanation for it.
#14719904
Rugoz wrote:The Scandinavian bus driver earns a lot more because Scandinavia has other sectors in the economy which are very productive.

No, it's because Scandinavian countries have governments that intervene massively in the economy to rescue their people from enslavement by landowners.
Those sectors attract workers, making labor in "bus service" scarce, hence increasing the marginal product of labor in "bus service" and consequently the wages of bus drivers.

No. Wages are not related to marginal productivity of labor. The Law of Rent explains why market wages are equal to the productivity of labor on marginal land. Absent government intervention, all production in excess of that amount is taken by landowners.
If "bus service" were a tradeable good it could be imported from India, but it is not.

If working people in Scandinavia got as little help from their governments as Indians get from theirs, Scandinavian bus drivers would be working for subsistence wages, like Indian ones.
Physical capital is only one factor behind high productivity. If it were the only one, poor countries would catch up with rich countries in no time. Education, know-how, culture, institutions etc. all matter as well.

But none of them increase market wages, which are determined by the competition for advantageous land sites. Indeed, as Henry George demonstrated 140 years ago in "Progress and Poverty," accumulation of physical capital can actually reduce wages by pushing the margin outward even as it raises marginal labor productivity to the skies.
I think unionization does not generally increase wages (as far as I remember, could be wrong), but it does decrease inequality somewhat.

Union power increases union wages, and decreases everyone else's wages.
There are a wide variety of reasons why wages do not equal the marginal productivity of labor (can be higher or lower), but I also do not think they deviate far from it, or only temporarily.

They differ enormously from it, indeed are not noticeably related to it. Absent government intervention, wages are determined by the productivity of labor on marginal land.
The exception are (high-level) executives. Their wages relative to the rest of the workforce have risen tremendously in the past decades and there's no rational explanation for it.

The explanation is fairly simple, if not exactly "rational": top executives are now mostly rent seekers, not producers. They mainly compete not in productivity, but for control of the most advantageous positions of privilege from which to rob consumers, shareholders and taxpayers. A typical example is Richard Fuld, ex-CEO of Lehman Bros, who took hundreds of millions of dollars from the bank while his "leadership" was pushing it right into bankruptcy -- a man so completely evil, he actually looks like Voldemort:

http://www.bing.com/images/search?q=ric ... ORM=IARRTH
#14719987
Union power increases union wages, and decreases everyone else's wages.


Patently untrue. Just the opposite actually.

Key Findings:

For nonunion private-sector men, weekly wages would be an estimated 5 percent ($52) higher in 2013 if private-sector union density (the share of workers in similar industries and regions who are union members) remained at its 1979 level. For a year-round worker, this translates to an annual wage loss of $2,704. For the 40.2 million nonunion private-sector men the loss is equivalent to $2.1 billion fewer dollars in weekly paychecks, which represents an annual wage loss of $109 billion.

Economic Policy Institute


TTP. You just make shit up. Simply make it up. Then you expect the rest of us to believe it.
#14720087
TTP. You just make shit up. Simply make it up. Then you expect the rest of us to believe it.

But... but... you don't understand, Drlee. TTP has feelz about reality, and these feelz are always right. He is at one with the cosmos. When he wants to draw conclusions about reality, he doesn't need to look at evidence or use logical reasoning like us lesser mortals, he merely has to commune with his own innermost feelz and the truth reveals itself to him. He is truly a marvel of our time! :)
#14720121
I am humbled. Désolé. I am ill prepared to be in the presence of such, such, one can only say....confidence.

I lie in ashes.
#14720134
Key Findings:

For nonunion private-sector men, weekly wages would be an estimated 5 percent ($52) higher in 2013 if private-sector union density (the share of workers in similar industries and regions who are union members) remained at its 1979 level. For a year-round worker, this translates to an annual wage loss of $2,704. For the 40.2 million nonunion private-sector men the loss is equivalent to $2.1 billion fewer dollars in weekly paychecks, which represents an annual wage loss of $109 billion.

Economic Policy Institute


Do you have a link?

The relevant question IMO is the effect on the labor income share. To my knowledge there's no empirical evidence that the decrease in unionization led to a lower labor income share. It's an empirical question because theoretically it can go both ways. Events that push up wages will lower the labor income share if the elasticity of substitution between labor and capital is high, and they will increase the labor income share if the substitution elasticity is low.
#14720144
Nunt wrote:This is expected in any economic system. It is impossible to measure the exact productivity of a worker. Many workers produce a product that is not measurable. And even if we can measure someone's productivity, it is hard to determine what caused this productivity. Maybe the worker was lucky or unlucky or some other circumstance that is beyond the control of the worker. Therefore, firms rely on average productivity to determine wages and try to adapt this using evaluation schemes which are always flawed or subjective.


I'm sorry to say that your inference is incorrect.

But more importantly, it's not 'productivity' as opposed to 'profitability' that an employer is interested in.

Collectively, or individually, a workforce can be impressively 'productive', but not necessarily 'profitable'.

It all boils down to the market law of 'supply,demand & the price mechanism.

Within the production process, it's all about the total cost of production,the value added between purchase of raw material-to output ,including all the overhead cost, to determine how much the goods or services can be sold at within the law of 'supply & demand'.

Individual workers can be employed on 'piecework', where every item produced has a monetary value or cost added at the moment it's production is completed,but is only realised once payment is received & cleared into the bank.

A worker however,cannot expect to wait until the above clearance happens, which is why companies that are well managed, have 'working capital', this should cover ALL working cost of the business for at least 3 months, preferably double that.
'Piecework' cost are fixed, workers get paid according to how many units are produced, multiplied by the cost of each unit.

Hourly paid workers or staff are paid at rates of pay x number of contractual hours worked.

As can be seen, ALL labour cost are precise,measurable & with an exact cost attribuitable.
#14720181
Drlee wrote:Patently untrue. Just the opposite actually.

No, it's definitely true. Union monopolies allow them to collect rents at the expense of employment. The increased unemployment pushes down general wages.
TTP. You just make shit up. Simply make it up. Then you expect the rest of us to believe it.

I make up nothing. EPI, the source you quoted, simply demonstrates that there are always apologists for privilege who will make $#!+ up to justify and rationalize it in return for money:

"EPI is a 501(c)(3) corporation. In 2010 through 2014, a majority of our funding (about 57%) was in the form of foundation grants, while another 27% came from labor unions."

The EPI website also offers the following as one of its five core "EPI Values":

"Strong, Effective Labor Movement - A strong, effective labor movement is essential for democracy and to ensure an equitable sharing of income and wealth."

Not exactly what one could call an impartial source, is it? And I've seen such garbage before. It is always based on three fallacious and disingenuous elements:

1. Cherry picking data that show higher wages in high-union jurisdictions.
2. Ignoring confounding variables like labor standards laws, minimum wages, and economic conditions.
3. Misattributing to unions the wages and benefits obtained by virtue of other factors.

There is no credible analysis showing that unions raise non-union wages, and I have seen plenty of cases where it has done the opposite. In my own field, unionized workers recently went on strike for more money (they were already paid far more than non-union workers at competing firms), bankrupting their employer and throwing dozens of staff into the labor market to compete down the wages of non-union workers. Detroit is the poster child for the malignant effects of union rent seeking: in the 1970s, unionized auto workers were making 5-10 times the wages of non-union manufacturing workers with similar qualifications and experience. Union greed forced auto firms to relocate to lower-wage jurisdictions to compete with more efficient producers in Japan, and Detroit now has massive unemployment despite a rapidly declining population, and few non-union workers make more than minimum wage.
#14720182
Potemkin wrote:TTP has feelz about reality, and these feelz are always right.

No, I identify the relevant facts and their inescapable logical implications.
He is at one with the cosmos.

With the truth.
When he wants to draw conclusions about reality, he doesn't need to look at evidence or use logical reasoning like us lesser mortals,

I am the one who DOES look at evidence and apply logical reasoning.
he merely has to commune with his own innermost feelz and the truth reveals itself to him. He is truly a marvel of our time! :)

I am the one here who reliably identifies relevant facts and their logical implications.
#14720184
Nunt wrote:This is expected in any economic system. It is impossible to measure the exact productivity of a worker. Many workers produce a product that is not measurable. And even if we can measure someone's productivity, it is hard to determine what caused this productivity. Maybe the worker was lucky or unlucky or some other circumstance that is beyond the control of the worker.
Yep.

Therefore, firms rely on average productivity to determine wages and try to adapt this using evaluation schemes which are always flawed or subjective.
I've never known any firm do anything of the kind. They simply pay going rates determined by the labour market or as little as they can get away with.
#14720186
Nunt wrote:This is expected in any economic system. It is impossible to measure the exact productivity of a worker. Many workers produce a product that is not measurable. And even if we can measure someone's productivity, it is hard to determine what caused this productivity. Maybe the worker was lucky or unlucky or some other circumstance that is beyond the control of the worker.

This may be true, but it is irrelevant. The capitalist system cares nothing about what people 'deserve' or don't 'deserve', and nor should it. Does Donald Trump 'deserve' to be a billionaire? Does it matter? In the capitalist system, no allowances are made for bad luck or for having had good intentions. None of that means a damn thing. The only thing that matters is the bottom line: profitability.
#14720268
Translating TTP's response to my evidence:

I don't like their position, have no evidence to refute it, so I will attack the source without evidence to support the attacks either.

TTP is a fraud.

Do consider this:

About the study:

Rosenfeld conducted the research with Patrick Denice, a postdoctoral research associate in sociology at Washington University, and Jennifer Laird, a postdoctoral research scientist with the Center on Poverty and Social Policy in the School of Social Work at Columbia University in New York.



The study was vetted and reprinted in phys.org. (Physics . Org) We all know how easy it is to fool physicists with, you know, numbers and shit.

Research independence. Effective public policymaking relies on academically rigorous independent analyses. EPI researchers and authors are solely responsible for their research conclusions and policy recommendations and have the final say on their work. EPI provides both external and internal reviews as part of the publications process. EPI welcomes comments and clarifications from all informed parties to enhance the quality, salience, relevance, and clarity of our work. EPI researchers and author(s) determine how and whether to respond to suggestions by reviewers.


Why don't you write to them TTP. I imagine they will be amused, I mean amazed at your conclusions.
#14720410
Drlee wrote:Translating

I.e., misrepresenting
TTP's response to my evidence:

I don't like their position, have no evidence to refute it,

I gave you both empirical and theoretical evidence.
so I will attack the source without evidence to support the attacks either.

:roll: I gave you the evidence.
TTP is a fraud.

Disgraceful.
About the study:

And...? You think naming a couple of SJW union sycophants is somehow going to impress me?
The study was vetted and reprinted in phys.org. (Physics . Org) We all know how easy it is to fool physicists with, you know, numbers and shit.

The fact that it was reprinted there despite having nothing whatever to do with physics should tell you something: it's a political, not a scientific, exercise.
Why don't you write to them TTP. I imagine they will be amused, I mean amazed at your conclusions.

<yawn>
#14720437
We are still waiting for your evidence. We will wait a long time.

Now post something about property. I like that. It is amusing.
#14720709
Drlee wrote:We are still waiting for your evidence.

No you aren't. I gave you evidence in the form of both a theoretical argument -- which you haven't and won't address -- and empirical facts, which you have not even attempted to dispute.
We will wait a long time.

No, your wait is already over. I gave you both theoretical and empirical evidence. You know this.
Now post something about property. I like that. It is amusing.

Failure -- in fact, refusal -- to understand property is at the root of all the failures, horrors and Holocausts caused by capitalism and socialism over the last 400 years. You are simply continuing the refusal, and thus the failures, horrors and Holocausts (currently running at about 2/yr).
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