Tuesday, November 12, 2013

NYT Endorses $15 Minimum Wage

Does anyone at NYT understand how free market wages are set? I think not. Here's NYT's editorial board on SeaTac, Wahington's plan to raise the minimum wage to $15 per hour. NYT  really holds the Marxian exploitation theory of labor, as if workers currently suffer without gains in their standard of living, as though they can't afford air conditioning, cell phones, personal computers and a place to live:

All of which makes $15 an hour sound too high. Hardly. Over the last half-century, American workers have achieved productivity gains that can easily support a $15-an-hour minimum wage. In fact, if the minimum wage had kept pace over time with the average growth in productivity, it would be about $17 an hour. The problem is that the benefits of that growth have flowed increasingly to profits, shareholders and executives, not workers. The result has been bigger returns to capital, higher executive pay — and widening income inequality.

Efforts by the states and the federal government to raise the minimum wage are an important way to counter that dynamic. But they must be seen as modest and partial steps in the direction of fair wages. Other steps include more progressive income taxes, enhanced rights to form unions without retaliation, and government job-creation programs, because a tighter labor market would force employers to compete for workers.

Fast-food workers, Walmart employees and staff of federal contractors have all been agitating recently for higher pay from profitable employers. They deserve raises, and they deserve to have the federal government behind them.


  1. Where is this genius getting this $17 an hour claim from?

  2. ".....and they deserve to have the federal government behind them." (good and hard)

  3. If the employer doesn't pay the employees what they "deserve" have the state shoot the employer. How civilized.
    Also, I got an A in understanding how evil profits are. I just can't figure out how to pay my employees without making one.

  4. "In fact, if the minimum wage had kept pace over time with the average growth in productivity, it would be about $17 an hour."

    Depends on how you define productivity?

    It would seem a worker's "worth" to an employer is based on two things 1) how scarce is the worker and her skill set?

    2) how much cash does the execution of that skill bring in the door? Will it be enough to pay the costs for hiring and maintaining the worker? $17 per hour maybe too expensive for many classes of workers. In some cases, it might be far too cheap. Accuracy would depend on using many variables for which may apply to certain industries and not to others which means a metric called "productivity" would be quite arbitrary.

    At the bottom, the authors write that certain classes of workers "deserve" a raise. "Productivity" is the bait in the argument and "deserve" is the switch.

  5. Still no explanation of why to stop at $X instead of $X+1. If such an explanation has ever been given by a proponent of the minimum wage, I have yet to read it, and it's not for lack of searching.

  6. Does the NYT pay it's lowest skilled people at least $15/hour? Probably not but my hypocrite detector went off.

  7. Productivity as defined by the NYT (i.e. net profit per worker) is a very poor measure of a worker's output because it misattributes the contribution to the firm's profits of capital and technology onto the worker.

    For example, driving a forklift hasn't changed a great deal in 30 years - so one hour of work operating a forklift is roughly equivalent between now and the 80s. However, firms such as Amazon have been able to greatly increase efficiency and profit by using automation, information technology, and advanced logistics. If one uses the NYT productivity metric, one wrongly concludes that the Amazon forklift operator is far more productive than his 80s counterpart, and is being paid vastly less than his contribution to the firm.

    1. Nevermind the fact that those productivity increases aren't because people work harder than they did in the past, it's because the businesses have invested the capital to allow there workers to be more productive. So who really deserves the benefit of increase in productivity? The ones doing the extra work, or the ones who made the extra work possible?