On 2014-12-26, Ed Huntress wrote:
On Thu, 25 Dec 2014 20:24:55 -0600, Ignoramus11791
wrote:

I find that reasoning to be ridiculous. According to its proponent, the
reason for disappearance of middle class, is that a certain arcane
"federal overtime rule" was not adjusted for inflation.

I'm going to guess you didn't read the whole article, nor the other
articles and the TED talk that Nick Haneur has given.

I read the article, and that was what I was responding to, but did not
listed to the TED talk and I am not planning to listen.

The overtime thing was just a response to what PBS was interviewing
about. Read the rest of the article and you'll have a better picture.


This makes no sense. We live in a capitalist society where wages, for
the most part, are formed in a labor marketplace.

The "labor marketplace" is hugely biased against labor, and has been
throughout history, with a couple of exceptions: the World Wars and a
couple of bubbles, in which labor gained an advantage.

The study of Labor Economics is worth a Master's degree of study --
and often is.

I have not immersed myself into the arcana of it, however all studies
about various "biases", "flaws", and other real shortcomings of human
decision making, only look at short term effects. In the long run,
prices take care of those biases nicely. Same likely applies to those
"biases against labor".

For example, take China, with labor protection nonexistent. Simply due
to economic development, their wages increased severalfold, simply
because labor became more marginally profitable to employ, and
scarcer.


If workers bring a certain incremental additional value to employers,
then their wage would reflect that additional value (the extra amount
that the employer would earn from hiring an additional worker).

Not if the workers are bidding each other down. That's the most usual
state in any industrial economy.

There is always two sides to price discovery, labor bidding itself
down, and employers bidding themselves up.

The growth of the American middle class, and our great economic
success, is the result of legislation in favor of labor that attempted
to establish a more realistic balance. Our economic growth over the
past 70 years is largely the result of re-balancing that drove up
consumption. Our economy is 70% domestic consumption.

However much you legislate, if computers and robots and websites
replace that middle class, it will not be employed at previously
customary wages.


In addition, when costs of transportation of goods or services are
low, jobs can move to countries with less regulations or lower costs.

That's true. Once a country goes all-in for globalization and
offshoring, they've lost control of the balancing controls on their
labor market. And the result, for the US, is a 30-year decline in the
real wages of the middle class and a struggle to keep unemployment
down to a balancing level.


I can emotionally understand why that billionaire campaigns for $15
minimum wage, but his reasoning does not stand up to scrutiny.

i

The alternative is a race to the bottom.





To believe that the market prices for, say, car oil changes is self
regulating, but that market prices for employees doing oil changing is
not, is kind of crazy and inconsistent.

Employees seek higher wages, employment contracts can be terminated at
any time, and employers seek profitable employees. That causes wage
prices to clear.

If computers and robots can replace employees, they should not hope
for higher wages.

I do not have anything to add to what I said.

i