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low-end jobs
More recently, I've interacted with automation that is designed to specifically replace humans rather than broadening service. The automated check-out at grocery stores is the big example here. Instead of one cashier per line, stores now need one employee per 4 or so lines. This isn't making things more convenient for customers; unlike ATMs, the scanners are only available when the store is open anyway.
There are practical reasons I tend to avoid the automated checkouts, mostly related to speed. The line for the human has to be about three times as long as the line for the machine before the machine looks like a time-saver. People may get more proficient at scanning and packing over time, of course.
But I find that even absent that consideration, I'm reluctant to use the machine. Doing so helps to eliminate a low-end job that might be the only job the job-holder is capable of doing. Most of the cashiers I see at the grocery store aren't college-age kids looking for spending money; they're middle-aged and sometimes visibly handicapped.
This is not wholly a compassion-based argument; it's also one of expedience. I think we as a society are better off if almost everyone has a productive job. And some people are only capable of the lower-end jobs that are most in danger of being automated away. (Aside: for this reason, requirements for high minimum wages are also a bad idea -- don't make it cost-ineffective to hire people at prices they're willing to work for!)
We cannot avoid automation, of course, and in many cases it's a good thing. I'm no Luddite (she says, typing on her computer :-) ). But I kind of wish that we could focus it a little differently sometimes.
And yes, sometimes the humans are annoying to deal with. Last night I lost close to ten minutes to an inept cashier, and there is one (mentally challenged) bagger who I will never again allow to touch my groceries because he seems utterly bewildered by ideas like "the bread goes on top" (multiple failures). People who aren't capable of doing the job shouldn't hold the job anyway just out of pity. (Giant Eagle was right to fire the guy who was partially eating food and then putting the package back on the shelf, and I don't care that he didn't understand that this was wrong.) But y'know, the machines aren't painless either -- just try to get a scanning error fixed. And for the most part, the people holding these jobs are quite capable and willing to work, and I find I'm rooting for the people over the machines.
part 1
Did the buffet owner who wasn't willing to pay more than $X/hour for waitstaff consider hiring more waitstaff (rather than paying the existing ones more)? Or was there also some meme about the "correct" number to have, in addition to the "correct" price?
But people don't think that. They think the higher status a job is, the "nobler", the "more important to our society", the "better" it is, the higher it should be paid.
And yet, if you ask them which professions are "noblest" or "best for society", they'll rank teachers and nurses much higher than, say, IT professionals. While there's some correlation between salary and perceived worth, I think it may be more complicated than what you're describing.
You have a good point about non-conspiratorial price-fixing. If this "worth ceiling" is widespread, it would produce that effect.
There's so much bellyaching about how unions force their industries to pay higher wages, but look what they're up against: an irrational prejudice against paying some sorts of workers in some sorts of jobs what would really be the market rate, which deforms the so-called "free market".
This is complicated by unions' job-protection-in-excess-of-demand tactic, though, which is a perversion of the free market in its own right. Locally, the unions are getting very cranky because the city, which is shrinking in population, wants to eliminate some public-service positions. This has nothing to do with wages and everything to do with keeping now-superfluous police officers (etc) on the payroll.
Unions do have a real problem to contend with -- low wages in the face of "disposable people" (there's always a pool of cheap labor somewhere if you don't care about churn). Overall, though, in the last couple decades I'm not sure they've been a net gain for workers.
Sorry; that was a tangent.
[continued]
Re: part 1
Me rationalist. You rationalist. Rest of world.... not so rationalist.
Yeah, really insanely, mind-bogglingly stupid and self-destructive.
I decided the field of economics had little utility to me, when I was about 20 and several local stores responded to dwindling patronage (lower demand) by raising prices. To make up for lower sales, you know.
*beat* *head* *on* *desk* *beat* *head* *on* *desk* *beat* *head* *on* *desk*
At which point I threw up my hands and acknowledged that the the laws of supply and demand only worked to describe markets on a macro level of earthlings, or on a micro level that was populated by people from some more intelligent planet.
(Yes, the shops went out of business.)
Have you ever actually tried to have the "if you have fewer customers maybe you should drop your prices" conversation with a vendor? I've had people look at me like I was absolutely out of my mind for suggesting that.
Heck, I expect there's SCA branches out there which responded to dwindling event attendence with trying to share around the cost of the same hall among fewer people. "Oh, no, we have fewer people, so now our event prices have to go up."
I could go on, and on, and on (and probably have :) with the unbelieveably counterproductive, cockamamie, "do you just not grasp capitalism?!", "how have you managed to stay in business?!" things I've witnessed in the business world.
Did the buffet owner who wasn't willing to pay more than $X/hour for waitstaff consider hiring more waitstaff (rather than paying the existing ones more)? Or was there also some meme about the "correct" number to have, in addition to the "correct" price?
Three answers to your question:
1) Not memetically, but there are other issues which force the number of heads, e.g. no matter how economical you think it would be to have 40 people all work one hour a week, you are unlikely to find workers willing to play along. The costs of overhead can mean it's cheaper to have fewer workers and pay them more -- or it can mean it's cheaper to have many workers and pay them less. Depends on circumstance, cost per employee, and market conditions.
2) Here, I don't think that would have solved the basic problem. If you need three waiters to work three hours each, but are unwilling to pay enough so that there are three people would take the jobs, being willing to hire four people at less money than anyone will accept doesn't solve the problem. It's not like we're talking about overtime here.
[cont]
"go out of business rather than pay market labor price"
Then, Jen decided she wanted to quit her job to become a full-time mother (the cost of two kids in day care would just about equal her take-home pay, so she figured she might as well eliminate the middleman). She went about looking for her own replacement. I asked around, and was told by various people in the know that someone with the skills to fill her job could command about 150% of her salary. Unfortunately, her boss wanted to pay Jen's replacement less than they were paying Jen. The person they eventually hired had "Unix system administration" on her resume, but it turned out that she didn't even know the difference between "cd afs" and "cd /afs".
The center hasn't gone out of business, but...
Also note that according to various studies, the best computer programmers can be an order of magnitude more productive than the worst, but they certainly aren't paid an order of magnitude more. I suspect this underpaying is due to a combination of (a) corporations not willing to pay technical workers more than the managers above them in the hierarchy; (b) the bureaucratic imperative of "the more people report to you, the more powerful you are" leads managers to hire several mediocre programmers when they could hire one star; (c) the difficulty of measuring the quality of a programmer's output.
At which point I threw up my hands and acknowledged that the the laws of supply and demand only worked to describe markets on a macro level of earthlings, or on a micro level that was populated by people from some more intelligent planet.
This is the sort of thing that makes me regret that I didn't major in economics. (Youth is wasted on the young, and all that...) "The laws of supply and demand" are for the freshmen. All the juicy research and theorizing about the exceptions to the laws of supply and demand are saved for the grad students.
(And actually, Keynesian macroeconomics is based on the observation that labor markets don't follow the laws of supply and demand in the same way that, say, the market for pork bellies does. Read his General Theory of Employment, Interest, and Money.)
continued
3) I didn't get to discuss it further with the people involved (I confess, I was too stunned and lost the initiative -- there are a lot of details I wish I'd been more on the ball to seek out), but I will observe that there was (and is) the surrounding economic condition: This city has massively sky-rocketting rents. Things were bad all over, but much worse in the region where this restaurant was. (I don't know how to estimate tip-worker's income, so I use non-tip guidelines. Right now the Federal minimum wage for non-tip workers is $5.15/hr. That's $206/wk before taxes. I pay below market for my one-room apartment: $825/mo. Do the math.) People in waitering jobs in that region were being priced out of their apartments. They had a decision:
(1) Move to where they could afford the rent and commute in.
(2) Move to where they could afford the rent and get a new waitering job there.
(3) Don't move, and try to get more wages to afford to remain in neighborhood.
Overwhelmingly, it seems #2 won. Apparently when people in low-paying service positions moved out because they couldn't afford to live here any more, they didn't stick around, commuting to their old jobs; they got new low-paying service positions out where they live. The people taking their old apartments were "young professionals" -- white-color workers who certainly don't wait on tables.
A lot of restaurants folded. A lot of restaurants are trying to get by on a few vastly over-worked waiters.
And a lot of restaurants raised their prices, and are doing fine.
Survival of the fittest, I'm sure, but that's cold comfort to the food vendors who lost market, commercial landlords who lost restaurant tenants, cooks who lost jobs, etc. A business' success is good for many more people than the business itself.
Overall, though, in the last couple decades I'm not sure they've been a net gain for workers.
Very true. I think of unions as "supply-side corporations" -- they are corporate vendors on the labor market. What we call corporations are "demand-side corporations" because they're the ones with demand for labor, they're labor-buyers. (Really, an incorporated company is a union of employers, engaged in collective bargaining over the price of all the jobs at a facility.)
As such, unions are just as heir to the sorts of counterproductive stupidity I've discussed above, as their demand-side brethren are. They are just as likely to become corrupt, or taking over by stupid people.
This is sort of the fundamental problem of corporatism.
Re: continued
Apparently when people in low-paying service positions moved out because they couldn't afford to live here any more, they didn't stick around, commuting to their old jobs; they got new low-paying service positions out where they live.
That's what I would have expected. Employers treat the people in those jobs as interchangable, but the people in those jobs also (largely) treat employers as interchangable. Why commute in to the old job if you can get the same type of job more conveniently?