Low Wages from Business Consolidation?

[lpetrich]

This is about the United States, but similar things may be happening elsewhere.

A new theory for why Americans can’t get a raise. nothing Labor Market Concentration

If you were a delivery van driver searching for a new job any time between the years of 2010 and 2013, chances are, you wouldn’t have found many businesses competing for your services. In Selma, Alabama, there was, on average, just one company posting help wanted ads for those drivers on the nation’s biggest job board. In all of Orlando, Florida, there were about nine. Nationwide the average was about two.

There is a paucity of potential employers in several other fields.

The degree of concentration, and the effect on wages, tended to be worse in smaller towns than major cities. Places like Alpena, Michigan, and Butte, Montana, had the least competition among employers, while New York, Chicago, and Philadelphia had the most. It also varied by occupation. Equipment mechanics, legal secretaries, telemarketers, and those delivery drivers faced some of the most highly concentrated job markets; registered nurses, corporate salesmen, and customer service representatives had some of the least. But overall, the problem looks pervasive.

Thus, many employers are monopsonies or oligopsonies, the buying counterpart to monopolies and oligopolies.

This theory does not rule out other possibilities for workers getting less and less of the GDP, like suppression of labor unions and automation and financiers threatening to downgrade businesses for not paying their employees less.

This has various policy implications. Labor unions and the minimum wage can be good ways of coping with employment monopsonies and oligopsonies. It also suggests an additional concern for antitrust actions.

 

[untermensche]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

 

[Loren Pechtel]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

 

[whichphilosophy]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

Cost effective workers can be cheaper than cheap workers.

 

[whichphilosophy]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

Pay workers more then they spend more in the economy creating more jobs.

 

[untermensche]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

Whatever they are making it is the lowest possible wage for the employer. If they are self employed or part of a union it is not.

That is the way the system is set up.

Of course there are minor exceptions. I think Henry Ford once raised wages on his own. For a short time.

 

[coloradoatheist]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

Whatever they are making it is the lowest possible wage for the employer. If they are self employed or part of a union it is not.

That is the way the system is set up.

Of course there are minor exceptions. I think Henry Ford once raised wages on his own. For a short time.

If that was the case, then every single employee would be making minimum wage, how many people are making min wage? Are you?

Actually the same growth of wages and prices would be more in line with the labor theory of value, ironically. As the wage goes up, the price goes up to cover that wage increase goes up the same to cover it. Productivity is what matters, not wages. There are many countries out there where people make 100s of times what a US person does in their currency, but what they can buy is much lower that what we can buy in the US.

 

[untermensche]

I never said the government mandated minimum wage is always the lowest possible wage.

Sometimes it is not.

But a market wage is always the lowest possible wage for the employer.

That's what the term means.

 

[coloradoatheist]

I never said the government mandated minimum wage is always the lowest possible wage.

Sometimes it is not.

But a market wage is always the lowest possible wage for the employer.

That's what the term means.

Not always, it's just a general consensus of the productivity of different types of skills. There are many times businesses overpay people.

 

[laughing dog]

This is about the United States, but similar things may be happening elsewhere.

A new theory for why Americans can’t get a raise. nothing Labor Market Concentration

If you were a delivery van driver searching for a new job any time between the years of 2010 and 2013, chances are, you wouldn’t have found many businesses competing for your services. In Selma, Alabama, there was, on average, just one company posting help wanted ads for those drivers on the nation’s biggest job board. In all of Orlando, Florida, there were about nine. Nationwide the average was about two.

There is a paucity of potential employers in several other fields.

The degree of concentration, and the effect on wages, tended to be worse in smaller towns than major cities. Places like Alpena, Michigan, and Butte, Montana, had the least competition among employers, while New York, Chicago, and Philadelphia had the most. It also varied by occupation. Equipment mechanics, legal secretaries, telemarketers, and those delivery drivers faced some of the most highly concentrated job markets; registered nurses, corporate salesmen, and customer service representatives had some of the least. But overall, the problem looks pervasive.

Thus, many employers are monopsonies or oligopsonies, the buying counterpart to monopolies and oligopolies.

This theory does not rule out other possibilities for workers getting less and less of the GDP, like suppression of labor unions and automation and financiers threatening to downgrade businesses for not paying their employees less.

This has various policy implications. Labor unions and the minimum wage can be good ways of coping with employment monopsonies and oligopsonies. It also suggests an additional concern for antitrust actions.

Historically, antitrust policy focuses in the implications for consumers of business practices and consolidation. It is clear that the historical trend in this county is anti-labor.

 

[fast]

I never said the government mandated minimum wage is always the lowest possible wage.

Sometimes it is not.

But a market wage is always the lowest possible wage for the employer.

That's what the term means.

When you say, "means," are you saying "for all practical purposes it might as well mean" that? Perhaps you have
some underpinning philosophical reasonong driving what you're saying, and if so, fine, but barring that, you're doing that thing you do an awful lot--declare that words mean things they really don't.

 

[untermensche]

I never said the government mandated minimum wage is always the lowest possible wage.

Sometimes it is not.

But a market wage is always the lowest possible wage for the employer.

That's what the term means.

When you say, "means," are you saying "for all practical purposes it might as well mean" that? Perhaps you have
some underpinning philosophical reasonong driving what you're saying, and if so, fine, but barring that, you're doing that thing you do an awful lot--declare that words mean things they really don't.

I am saying what the words really mean.

Really existing capitalism.

Not some fantasy version.

 

[Loren Pechtel]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

Whatever they are making it is the lowest possible wage for the employer. If they are self employed or part of a union it is not.

That is the way the system is set up.

Of course there are minor exceptions. I think Henry Ford once raised wages on his own. For a short time.

So when confronted with evidence you stick your head in the sand and ignore it.

You also have never addressed the issue of self-employed vs employees in the same field. If you were right there would be a big advantage to being self employed.

- - - Updated - - -

I never said the government mandated minimum wage is always the lowest possible wage.

Sometimes it is not.

But a market wage is always the lowest possible wage for the employer.

That's what the term means.

What you are missing is that competition drives up this wage. Offer too little and you can't hire enough people.

 

[Jason Harvestdancer]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

According to the Law of Supply AND Demand, the employer does try to bid the wages down, just as the employee tries to bid the wages up. The resulting wage is in between, based on demand for labor, supply of labor, demand for wage, supply of wage, etc. But you don't care that the employee tries to bid the wages up, you only care that the employer tries to bid the wages down. It is fair for one party to demand, it is unfair for the other party to demand.

 

[Axulus]

Research generally shows that bigger firms pay better wages (50% more compared to small businesses according to one study: https://www.washingtonpost.com/busi...0ebffed2f15_story.html?utm_term=.377a5a870312)

Where is the evidence for the assertion in the OP?

 

[LordKiran]

Research generally shows that bigger firms pay better wages (50% more compared to small businesses according to one study: https://www.washingtonpost.com/busi...0ebffed2f15_story.html?utm_term=.377a5a870312)

Where is the evidence for the assertion in the OP?

Better for whom? Bigger companies also have execs and ceos paid/compensated with millions of dollars in lumb currency or in assets skewing the curve.

 

[Harry Bosch]

Research generally shows that bigger firms pay better wages (50% more compared to small businesses according to one study: https://www.washingtonpost.com/busi...0ebffed2f15_story.html?utm_term=.377a5a870312)

Where is the evidence for the assertion in the OP?

Yea, bigger companies generally pay more, offer better benefits, better health care, sick leave, and etc.

 

[lpetrich]

Research generally shows that bigger firms pay better wages (50% more compared to small businesses according to one study: https://www.washingtonpost.com/busi...0ebffed2f15_story.html?utm_term=.377a5a870312)

Where is the evidence for the assertion in the OP?

In what I linked to. Axulus, why don't you study what I linked to and find the errors that you believe to be present?

The most that you've proved is that the average wage as a function of size goes roughly as this: /\. The extremes are lower than the middle: too small to have much economy of scale, and too large to have much competition for employees.

 

[untermensche]

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

According to the Law of Supply AND Demand, the employer does try to bid the wages down, just as the employee tries to bid the wages up. The resulting wage is in between, based on demand for labor, supply of labor, demand for wage, supply of wage, etc. But you don't care that the employee tries to bid the wages up, you only care that the employer tries to bid the wages down. It is fair for one party to demand, it is unfair for the other party to demand.

The resultant wage is always the lowest possible wage for the employer. Once they find people willing to take the wage they do not raise it.

That is how the system is set up.

To find that lowest possible wage.

The only things that have been known to raise it are unions and government mandates.

 

[Playball40]

Not really. The just 'import' those workers at lower wages.

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

Once the lowest possible wage is found it does not go up except by government action like raising the minimum wage or by collective action like union negotiation.

That is why overall real wages for working people have been stagnant for 40-50 years.

As the power of unions died in the US so has the middle class and the ideal of upward mobility.

The US is a stagnant plutocracy. With a super rich class becoming more and more entrenched which just drastically lowered it's obligation to society because it controls the government.

It goes up when the demand for the job exceeds the number of workers.

This doesn't get reflected in your "real wages" because they only look at hourly wages--and the good jobs are almost all salaried.

Simple test: Look at what people in the new jobs make. If your reasoning was right then people like website designers (a field that completely did not exist even 40 years ago) would be making minimum wage.

- - - Updated - - -

S&D should have all sides having equal power. Not the case when discussing worker wages. Not since the decimation of the union.

All market wages are low wages.

"Market wage" means: Lowest possible wage for the employer.

According to the Law of Supply AND Demand, the employer does try to bid the wages down, just as the employee tries to bid the wages up. The resulting wage is in between, based on demand for labor, supply of labor, demand for wage, supply of wage, etc. But you don't care that the employee tries to bid the wages up, you only care that the employer tries to bid the wages down. It is fair for one party to demand, it is unfair for the other party to demand.