COVID Economy

[TSmith34, Inc.]

What planet do you live on?  If you are willing to work, the Amazon’s of the world will pay $18 per hour. No questions asked.

Explain to me how that contradicts what I wrote. I'll wait.

[jesmu84]

Define “worker production” cause that seems to often come up when ignoring the interchangeability of unskilled/low level workers.  That’s not to say “oh they are worthless drones, pay them pennies”, but “they do the work, thus they should be paid way more” is awfully simplistic IMO.

https://www.cepr.net/this-is-what-minimum-wage-would-be-if-it-kept-pace-with-productivity/

https://www.epi.org/productivity-pay-gap/

If you'd rather tie minimum wage to living wage or another metric, I'm all for discussion

A good, albeit geographically based and slightly dated, infographic on minimum wage:



Point being that minimum wage jobs are a lot more of our economy than most believe

[JWags85]

https://www.cepr.net/this-is-what-minimum-wage-would-be-if-it-kept-pace-with-productivity/

https://www.epi.org/productivity-pay-gap/

If you'd rather tie minimum wage to living wage or another metric, I'm all for discussion

A good, albeit geographically based and slightly dated, infographic on minimum wage:



Point being that minimum wage jobs are a lot more of our economy than most believe

Anything from non blatantly left-leaning, pro-union sources? That CEPR article was terrible.  Basically completely devalues IP and bases their take in a bunch of far fetched hypotheticals of how he thinks an economy and corporate competition should be run.  “Yea well finance people wouldn’t make so much if we taxed them better.” “All drugs should be generic”

Listen, I think the minimum wage is woefully low. Im fine with roughly a $15/hr level, but geographic tweaks are necessary.

But the counter to the productivity argument is so much of what has increased productivity over the last 30 years isn’t just pro-corporate government regulation or business benefits, but vast technological and other innovation. If a company develops productions or tech or platforms that allow their employees to be vastly more productive, these sources would chalk it up to “there is far more worker productivity, they should be compensated” when they did not create the better mousetrap, they are just setting it.

[forgetful]

Anything from non blatantly left-leaning, pro-union sources? That CEPR article was terrible.  Basically completely devalues IP and bases their take in a bunch of far fetched hypotheticals of how he thinks an economy and corporate competition should be run.  “Yea well finance people wouldn’t make so much if we taxed them better.” “All drugs should be generic”

Listen, I think the minimum wage is woefully low. Im fine with roughly a $15/hr level, but geographic tweaks are necessary.

But the counter to the productivity argument is so much of what has increased productivity over the last 30 years isn’t just pro-corporate government regulation or business benefits, but vast technological and other innovation. If a company develops productions or tech or platforms that allow their employees to be vastly more productive, these sources would chalk it up to “there is far more worker productivity, they should be compensated” when they did not create the better mousetrap, they are just setting it.

Wags, I agree with you on the serious flaws in the linked article, but your counter analysis also has significant flaws.

I can make a better argument that the executives, whose compensation has far exceeded productivity growth, had as little to do with that growth as a minimum wage earner. That technological development was made by your average employee, whose income has also been stagnant for the past 50 years.

A drug isn't developed by a CEO, or CSO, or other executive, in fact they have next to nothing to do with the process. It evolves typically from fundamental research by academics, or industrial researchers, who are also the ones who have developed all the technology to facilitate these discoveries (similar for any technology development). These individuals salaries are frozen, despite building the better mousetrap.

Meanwhile, the executives who set the trap redeem all the awards.

Our compensation system has been broken for 50 years. The minimum wage is a part of the problem, but it all stems back to ridiculous funneling of cash to executives.

[jesmu84]

Anything from non blatantly left-leaning, pro-union sources? That CEPR article was terrible.  Basically completely devalues IP and bases their take in a bunch of far fetched hypotheticals of how he thinks an economy and corporate competition should be run.  “Yea well finance people wouldn’t make so much if we taxed them better.” “All drugs should be generic”

Listen, I think the minimum wage is woefully low. Im fine with roughly a $15/hr level, but geographic tweaks are necessary.

But the counter to the productivity argument is so much of what has increased productivity over the last 30 years isn’t just pro-corporate government regulation or business benefits, but vast technological and other innovation. If a company develops productions or tech or platforms that allow their employees to be vastly more productive, these sources would chalk it up to “there is far more worker productivity, they should be compensated” when they did not create the better mousetrap, they are just setting it.

Fair enough. Again, I'm open to ideas of other metrics to base min wage on. It's objectively too low right now. Corporations love it though as taxpayers are subsidizing their workforce

[MUBurrow]

But the counter to the productivity argument is so much of what has increased productivity over the last 30 years isn’t just pro-corporate government regulation or business benefits, but vast technological and other innovation. If a company develops productions or tech or platforms that allow their employees to be vastly more productive, these sources would chalk it up to “there is far more worker productivity, they should be compensated” when they did not create the better mousetrap, they are just setting it.

This is absolutely true - but the question then has to morph into whether that reality requires significant tweaks to how we want our economic system to work in order to produce socially acceptable outcomes.  Those tweaks, however implemented, will look like socializing the gains.  But if we don't socialize any of the gains derived from private innovation that drives up productivity through technological innovation, the only possible outcome is growing economic inequality and concentrating wealth in a smaller and smaller upper class, which is what we've seen so far.

[JWags85]

Wags, I agree with you on the serious flaws in the linked article, but your counter analysis also has significant flaws.

I can make a better argument that the executives, whose compensation has far exceeded productivity growth, had as little to do with that growth as a minimum wage earner. That technological development was made by your average employee, whose income has also been stagnant for the past 50 years.

A drug isn't developed by a CEO, or CSO, or other executive, in fact they have next to nothing to do with the process. It evolves typically from fundamental research by academics, or industrial researchers, who are also the ones who have developed all the technology to facilitate these discoveries (similar for any technology development). These individuals salaries are frozen, despite building the better mousetrap.

Meanwhile, the executives who set the trap redeem all the awards.

Our compensation system has been broken for 50 years. The minimum wage is a part of the problem, but it all stems back to ridiculous funneling of cash to executives.

What salaries are you implying are frozen?  Minimum wage/low wage jobs?  Sure.  But you're trapping "average" to mean far more than that, which I don't know to be the case.

I know for a fact that entry/mid level jobs my peers and I were applying for in the mid-late 2000s are not the same now as they were 10-15 years ago and have risen concurrently.  My father was an entry level design engineer in the mid 80s and was making in the low 20K range and that salary is now in the mid 60s, which at the very least paces with inflation.

And I would argue that people developing new drugs or technologies are not on the lower third or even lower half of a company's pay scale.  Of course a C suite executive is not heading development a new drug, but its also not a $30K a year grunt.  Same with tech/innovation/manufacturing companies.

This is absolutely true - but the question then has to morph into whether that reality requires significant tweaks to how we want our economic system to work in order to produce socially acceptable outcomes.  Those tweaks, however implemented, will look like socializing the gains.  But if we don't socialize any of the gains derived from private innovation that drives up productivity through technological innovation, the only possible outcome is growing economic inequality and concentrating wealth in a smaller and smaller upper class, which is what we've seen so far.

I dont entirely disagree.  Its a new sort of discussion and examination of industry/business/growth/etc...  However I want that discussion to be founded/based in realities and truths, not some emotionally charged populist perspective that doesn't match with the realities of business.

[lawdog77]

Hospitals cutting jobs again
https://www.beckershospitalreview.com/workforce/hospitals-lose-5-100-jobs-in-december.html?origin=CIOE&utm_source=CIOE&utm_medium=email&utm_content=newsletter&oly_enc_id=7221H7629690E9B

But also:
Hospitals still critically understaffed

https://www.beckershospitalreview.com/workforce/more-than-19-of-us-hospitals-are-critically-understaffed-numbers-by-state.html?utm_campaign=bhr&utm_source=website&utm_content=latestarticles

[jesmu84]

I dont entirely disagree.  Its a new sort of discussion and examination of industry/business/growth/etc...  However I want that discussion to be founded/based in realities and truths, not some emotionally charged populist perspective that doesn't match with the realities of business.

Sounds good.

But I don't think the powers that be want to have that discussion. Status quo has been good to them

Additionally, using a populist perspective would hopefully push the Overton window back to the left a bit after 40 years of super right leaning.

[forgetful]

What salaries are you implying are frozen?  Minimum wage/low wage jobs?  Sure.  But you're trapping "average" to mean far more than that, which I don't know to be the case.

I know for a fact that entry/mid level jobs my peers and I were applying for in the mid-late 2000s are not the same now as they were 10-15 years ago and have risen concurrently.  My father was an entry level design engineer in the mid 80s and was making in the low 20K range and that salary is now in the mid 60s, which at the very least paces with inflation.

And I would argue that people developing new drugs or technologies are not on the lower third or even lower half of a company's pay scale.  Of course a C suite executive is not heading development a new drug, but its also not a $30K a year grunt.  Same with tech/innovation/manufacturing companies.

Wags, thank you for the reply. There is a chart in this link which helps illustrate my point, and at the end it lists the average compensation increases since 1967.

https://www.advisorperspectives.com/dshort/updates/2021/10/25/updated-u-s-household-incomes-a-50-year-perspective

Those driving the development of technology are typically in the 2nd and middle quintile, where since 1967 real salaries (inflation adjusted) have increased by 63.1%, and 41.1% respectively, whereas that is better than the lowest quintiles ~31-34%, it is a far cry from the top 5% (133.5% increase) and top quintile (109.3%).

So whereas you have a point regarding the fact that productivity gains should be going to those responsible for the technology driving productivity gains, the data says that the majority of those gains are going to executives, who are just setting the mousetrap built by others.

[MU82]

Duke is closing the loophole that lets those who attend athletic events skirt the mask mandate by just holding a drink in their hands ...

https://www.charlotteobserver.com/sports/college/article257143952.html#storylink=cpy

Aiming to prevent further spread of COVID-19, Duke is temporarily suspending food and beverage concession and hospitality services during home athletic events, most notably basketball games at Cameron Indoor Stadium. The change, announced by the school on Friday night, begins with Saturday’s 8 p.m. game between the No. 2 Blue Devils and Miami. The policy is in effect until Jan. 21, meaning food and beverages will also not be served for Duke’s Jan. 15 home game with N.C. State.

The omicron and delta variants of COVID-19 have caused a spike in cases over the past three weeks. According to the state’s Department of Health and Human Services, the percent of tests positive for COVID-19 reached 31.2% with Friday’s update. That’s far above the state’s goal of 5% positives.

[Warriors4ever]

So much for anyone planning to eat popcorn one kernel at a time….

[jesmu84]

https://www.businessinsider.com/cancel-student-loan-debt-payments-paused-two-years-economy-2022-1

[MU82]

From the Wall Street Journal:

https://www.wsj.com/articles/americans-finances-got-stronger-in-the-pandemicconfounding-early-fears-11641736069?campaign_id=4&emc=edit_dk_20220110&instance_id=49899&mod=hp_lead_pos9&nl=dealbook&regi_id=108420427&segment_id=79178&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

Stimulus payments brought millions out of poverty and allowed them to clear debt, and households of all income levels built up savings. The stronger finances are expected to aid stability as normal spending and higher inflation return.

[mu_hilltopper]

From the Wall Street Journal:

Stimulus payments brought millions out of poverty and allowed them to clear debt, and households of all income levels built up savings. The stronger finances are expected to aid stability as normal spending and higher inflation return.

You know .. years from now we'll look back at that quote and understand that was the beginning of the end of Taco Bell.  And nursing homes.  And a few dozen other places where the jobs were crappy and underpaid.

[jesmu84]

From the Wall Street Journal:

https://www.wsj.com/articles/americans-finances-got-stronger-in-the-pandemicconfounding-early-fears-11641736069?campaign_id=4&emc=edit_dk_20220110&instance_id=49899&mod=hp_lead_pos9&nl=dealbook&regi_id=108420427&segment_id=79178&te=1&user_id=d36dcf821462fdd16ec3636710a855fa

Stimulus payments brought millions out of poverty and allowed them to clear debt, and households of all income levels built up savings. The stronger finances are expected to aid stability as normal spending and higher inflation return.

Crazy how effective it is giving money directly to individuals vs "trickle down" spending.

[jesmu84]

https://www.marketwatch.com/story/up-to-three-quarters-of-the-800-billion-ppp-flowed-to-business-owners-instead-of-workers-study-finds-11642418448?mod=home-page

Oh

[MU82]

https://www.marketwatch.com/story/up-to-three-quarters-of-the-800-billion-ppp-flowed-to-business-owners-instead-of-workers-study-finds-11642418448?mod=home-page

Oh

Yeah ... stunning, right?

[pacearrow02]

https://www.marketwatch.com/story/up-to-three-quarters-of-the-800-billion-ppp-flowed-to-business-owners-instead-of-workers-study-finds-11642418448?mod=home-page

Oh

I would have assumed 100% went to business owners?  I didn’t think random employees could request or take the PPP loans.

[SERocks]

Yeah ... stunning, right?

Trickle down works, no? 

[JWags85]

https://www.marketwatch.com/story/up-to-three-quarters-of-the-800-billion-ppp-flowed-to-business-owners-instead-of-workers-study-finds-11642418448?mod=home-page

Oh

What would you expect the results to be?  Genuine question instead of another skewed "business/capitalism is bad" link.

PPP loans had a variety of stipulations including $100K salary caps, so its not like the funds flowed to fat cat owners pockets immediately. 

Additionally, speaking from a business owner who received PPP funds, you have other expenses beyond just salaries that still need to be paid when revenue isn't coming in like rent and utilities.  So the money was never going 100% to employee salary nor was it supposed to.

Also, owner operated businesses or a family business with 1-2 employees were gonna skew this as well.

The distribution of funds were a bit haphazard, but the bank oversight is no joke.  Anyone thinking that its tons of wealthy business owners running off with cash at the expense of their business owners fail to realize that banks were the ones administering and forgiving any eligible loans and they don't mess around.

[jesmu84]

What would you expect the results to be?  Genuine question instead of another skewed "business/capitalism is bad" link.

PPP loans had a variety of stipulations including $100K salary caps, so its not like the funds flowed to fat cat owners pockets immediately. 

Additionally, speaking from a business owner who received PPP funds, you have other expenses beyond just salaries that still need to be paid when revenue isn't coming in like rent and utilities.  So the money was never going 100% to employee salary nor was it supposed to.

Also, owner operated businesses or a family business with 1-2 employees were gonna skew this as well.

The distribution of funds were a bit haphazard, but the bank oversight is no joke.  Anyone thinking that its tons of wealthy business owners running off with cash at the expense of their business owners fail to realize that banks were the ones administering and forgiving any eligible loans and they don't mess around.

As I understood it, PPP was supposed to be a jobs retention program. Clearly funds were used for other functions

[JWags85]

As I understood it, PPP was supposed to be a jobs retention program. Clearly funds were used for other functions

You can’t retain jobs when a business closes.  It’s not like PPP funds could be used for outsized bonuses or business travel or company cars. Payroll expenses, rent and utilities, essential business purchases, that’s it.

But again, there was oversight if you wanted loan forgiveness or any of the benefits.  We had to keep a running financial analysis of what PPP funds were used for and they were in a separate bucket from other funds from the bank.  We couldn’t spend unchecked

[jesmu84]

You can’t retain jobs when a business closes.  It’s not like PPP funds could be used for outsized bonuses or business travel or company cars. Payroll expenses, rent and utilities, essential business purchases, that’s it.

But again, there was oversight if you wanted loan forgiveness or any of the benefits.  We had to keep a running financial analysis of what PPP funds were used for and they were in a separate bucket from other funds from the bank.  We couldn’t spend unchecked

Understood.

I wasn't actually trying to say corporations/capitalism bad in this case.

I think instead it was another dumb, short-sighted government program

[pacearrow02]

Understood.

I wasn't actually trying to say corporations/capitalism bad in this case.

I think instead it was another dumb, short-sighted government program

In the link you provided it said it saved/preserved up to 3 million jobs.  Gov’t has spent a lot more and gotten much less back over the years.  Not a perfect program but wouldn’t categorize it as dumb that’s for sure.