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Comment by credit_guy | Hacker News Reader

In a very simplistic way, shouldn't the average wage keep pace with the average productivity gains and the minimum wage keep pace with the minimum productivity gains? I can see the average farmer making huge productivity strides, since they use much more complex combines, and irrigation systems and such, but did the productivity of a burger flipper go up similarly?

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This is not how it works in actuality [0]. Wages are market, not productivity, driven. Even if particular work-field doesn’t increase in productivity, aggregate wage increases (due to perhaps aggregate productivity increases or change in labor relations) cause salary increase. Similarly, productivity increases don’t themselves cause salary increases.

Real life example, factory worker productivity rose dramatically with automation, and salaries did not keep up. Physician productivity did not increase much but salaries grew.

[0] https://en.m.wikipedia.org/wiki/Baumol%27s_cost_disease

Minimum wages are inconsistent with the idea that people should be paid strictly according to their productivity. If society becomes more productive overall, as a matter of fairness I think that “should” result in the minimum wage being increased. The lowest-paid workers “should” enjoy better living conditions today than they did in the 1980s. Productivity gains across the entire economy are easier to quantify than “living conditions,” so I think the article makes a good case that the minimum wage “should” be significantly higher than it is now.

Productivity growth at the bottom end is very low, but wages at the bottom end still need to keep up with the cost of living or people who are in minimum wage jobs will no longer earn enough to survive.

That was exactly my thinking. So the argument is that the minimum wage should keep pace with the cost of living. We, as a society, need to help those who were less fortunate than us, and it make sense to make an appeal to compassion.

This article is trying to argue something else entirely. That we as a society are collectively screwing those less fortunate. The productivity has gone up, and the gains from the productivity go to the rich rather than the poor. While this might be true in principle, this article fails to provide the evidence, as the entire premise is flawed.

> In a very simplistic way, shouldn't the average wage keep pace with the average productivity gains and the minimum wage keep pace with the minimum productivity gains?

Wages are set by the market, not by productivity.

That's for sure. This is an article that makes an appeal to fairness though. The underlying message is "the rich are getting richer, and the poor are getting poorer". So, if you want to follow the argument of fairness, should the wage of the minimum wage workers grow at the same rate as the average productivity for the nation, or as the rate of the productivity gains for the minimum wage workers? If it's the latter, then it's quite likely that the productivity of the lower end jobs did not see a whole lot of gains.

> This is an article that makes an appeal to fairness though.

Right... but there's absolutely no mechanism to achieve anything apart from through the market (for the private sector.) You can argue all you want, but nothing will happen. Nobody (to an approximation) is going to voluntarily pay more for an abstract concept of fairness.

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