No. of Recommendations: 8
Here's reality: if the minimum wage (not the average wage, mind you, just the minimum) kept pace with worker productivity, it would be $22/hour. But it hasn't, because workers have little bargaining power and there is always a surplus of hungry mouths.

It hasn't kept pace because it isn't the worker that is increasing their own productivity. It's the capital improvements paid for by the owner of the business. So it's the owner that should reap the result of the productivity increase. It's the process that has become more productive, not the worker. Without the new technology, the worker's productivity doesn't improve much.

The other reason is that if all the competitors have the same productivity improvements, it hasn't increased their competitive advantage. Supply and demand of the entire market will determine where the new equilibrium will be. Fewer workers are needed, so their value decreases. Simple supply & demand.




The cashier at the grocery store can check out a whole lot more people because every product has a bar code on it that can be scanned. That's a lot quicker than what we used to do when I worked in a grocery store in the early 70's. Each product had to have a price tag on it, and the cashier had to find that price tag, then accurately punch the correct price into the cash register. And if a price change occurred, a stocker had to go out and physically mark up the price on each product on the shelf. Now, they just change the price on the computer, so the scanned product comes up at the new price.

And now, because the cashier can easily scan the bar code, they can also place the product into bags. So my job, bagger-carryout, got obsoleted.

They even have self-checkout lanes, where a single cashier can oversee a dozen checkout lanes. If we paid based on productivity gains, she'd be paid 12 times as much as a single cashier.
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