I think a lot of what you’re saying depends on the price of hours of work decreasing as the supply increases, but hours of work don’t have a fixed supply in the same way that goods like oranges do (hours of work are constantly traded-off with hours of leisure), and most people raise the price of each additional hour of work.
Working 1 hour total is much easier than working 1 additional after after an 8 hour shift; or looking the other way, having 1 hour free at the end of the day is much more valuable to me than having 1 hour additional free at the end of a period of 8 hours of free time. So even though I’m willing to work an additional hour for some amount of money, a clone of me with no job would be willing to work that hour for less.
So, even if you got rid of the 8-hour work day, we wouldn’t all suddenly be working more hours for less money. Companies that tried to raise hours without raising per-hour pay would lose workers to companies that kept the old schedule (and in most cases on the low-end of the pay scale, keeping hours reasonable is a pure-win, since companies would rather have more people working fewer hours for redundancy reasons).
The employer gets a free pick who they hire. If there are a bunch of applicants the one that accepts the lowest salary is the most attractive financially to employ. But if they are okay with small pay because they don’t have any leverage. So in order to get any kind of balanced situation the who gets employed should be ambivalent about taking the job or not taking the job. We can directly go for the weakest link who will be rejected from all other employment.
Sure for some educated positions people will leave so ridiciluos offers on the table. Low requirement jobs are a relevant alternative when you consider that you reject all of higher requirement jobs. We can go for the weakest link, the bottom rung of jobs that get the applicants that get rejected from any other level of job. So the most desperate person would need to reject scraps and choose to go without. I guess that is one form of dying with dignity.
If the most desperate person manages to reject then the next desperate person gets checked how many pennies needs to be added for them to grab the offer. Letting simple suppply and demand balance it means companies profit from desperation and have incentive to maintain or create it.
I guess I’m confused how you reconcile the view that this would definitely happen with the fact that we’ve run the experiment and it doesn’t happen. The minimum wage in the United State is $7.25 and overtime pay at that wage would be $10.88, but Walmart doesn’t pay anyone less than $11 per hour*. If they actually had the leverage you think they do, they could make all of their employees work huge amounts of overtime and still pay them less than they actually do in reality.
I think the problem is that you’re assuming employers don’t compete for jobs, but they do, and they also put in effort to retain workers (it’s a waste of money to hire someone for low pay and then have them quit and switch to your competitor once they’re trained). It’s true that there are some people that companies don’t want to hire at all, but if a company doesn’t want to hire you in the first place, why would they want to hire you for long hours?
The average “front-line worker” pay at Walmart is $17 per hour.
I did guess that the state with highest minimum wage would allow for a corporation that wants to operate as one entity in multiple states to be above the local average in some locations (or the global one). Quick search seemed to indicate there are quite a lot of states at 10.8 which is not far off 11.
There would also be some PR costs to literally hit the minimum on the penny which would generate a small margin.
But I have also heard stories that Walmart actively assists its employees to get every benefit and support that they ared entitled to. If a persons pay comes in significant fraction from public money the private forces are not keeping it balanced. The persons are actually half-employed rather than fully employed.
I would also think that having a employee be in working 5 and never getting a raise would be too unbearable. So you allow atleast some progression making the average of go up. That is also one trick. Emphasise that there is going to be good pay in 2 years in order to keep money hopes low for those 2 years. At the very extreme this leads to things like paying with only “exposure”.
I don’t see how any of these things change my point. If Walmart could offer desperate people any wage and hours they want, there would be no reason for them to pay over the minimum wage, offer raises, or help their employees get benefits they’re entitled to. They do all of these things because their employees do have other options and they need to do enough to make a job at Walmart at least as attractive as other jobs or non-jobs (going to school, not working).
I think this does not necessarily contradict the Prisoner’s Dilemma scenario.
As a thought experiment, to make things simple, imagine that everyone wants the same hourly wage for each of the first 8 hours, but 100% more for the ninth hour, and 200% more for the tenth hour.
So we start with a 8-hour workday for everyone; everyone making 8x per day. (As a thought experiment.)
Now suppose that the 8-hour workday is abolished, and everyone decides to take the extra two hours to make 13x instead (8×1 + 2 + 3), because it seems like a good idea.
But now the total amount of available hours has increased by 25%, which (according to Econ 101) means that work becomes somewhat cheaper, per unit. Instead of the expected 13x the employees will get 13y instead, for some y smaller than x.
If you decide, as an individual, that 13y is not worth ten hours of your time every day, and try to get your original 8-hour workday back, guess what, now you can only get 8y instead of the original 8x. Oops. Now, depending on the exact values of x and y, maybe 8y is still enough to feed your family and pay the mortgage. Or maybe it is not… and then you can only curse the fate and keep working 10 hours a day, because the old choice no longer exists. But now the fact that you keep working 10 hours a day is also preventing other people, as individuals, to get their 8-hour workdays back for 8x.
Note that the exact values of x and y depend on the structure of the market (how flexible is the demand for work). It is not even guaranteed that 13y is necessarily more than 8x.
Companies that tried to raise hours without raising per-hour pay would lose workers to companies that kept the old schedule
The missing part is that the companies that kept the old schedule can now afford to pay less, because now more people want to work for them.
I don’t think this works. You’re going from a thought experiment with exact numbers that would agree with me, then throwing them away to use a heuristic and saying that somehow pay would go down.
Your thought experiment doesn’t really match the current situation, since >8 hour days aren’t actually banned, they just cost 50% more, but assuming there was an actual ban...
Specifically, the problem is that when the 8 hour work day is abolished, the supply of hours that cost $x stays exactly the same, while the supply of hours that cost $2x and $3x increases. The additional supply of more expensive hours doesn’t help the employers’ negotiating position at all. Or to be specific, the fact that Walmart now has a much larger supply of people willing to work for $24 per hour doesn’t help them hire people for $12.
One way this could effect things is to increase income inequality, if some people are 4x as productive, it would be better to hire them for as many hours as you can get than to hire additional lower-productivity people, but it’s weird to talk about this in terms of businesses exploiting people since total pay would actually go up.
I think a lot of what you’re saying depends on the price of hours of work decreasing as the supply increases, but hours of work don’t have a fixed supply in the same way that goods like oranges do (hours of work are constantly traded-off with hours of leisure), and most people raise the price of each additional hour of work.
Working 1 hour total is much easier than working 1 additional after after an 8 hour shift; or looking the other way, having 1 hour free at the end of the day is much more valuable to me than having 1 hour additional free at the end of a period of 8 hours of free time. So even though I’m willing to work an additional hour for some amount of money, a clone of me with no job would be willing to work that hour for less.
So, even if you got rid of the 8-hour work day, we wouldn’t all suddenly be working more hours for less money. Companies that tried to raise hours without raising per-hour pay would lose workers to companies that kept the old schedule (and in most cases on the low-end of the pay scale, keeping hours reasonable is a pure-win, since companies would rather have more people working fewer hours for redundancy reasons).
The employer gets a free pick who they hire. If there are a bunch of applicants the one that accepts the lowest salary is the most attractive financially to employ. But if they are okay with small pay because they don’t have any leverage. So in order to get any kind of balanced situation the who gets employed should be ambivalent about taking the job or not taking the job. We can directly go for the weakest link who will be rejected from all other employment.
Sure for some educated positions people will leave so ridiciluos offers on the table. Low requirement jobs are a relevant alternative when you consider that you reject all of higher requirement jobs. We can go for the weakest link, the bottom rung of jobs that get the applicants that get rejected from any other level of job. So the most desperate person would need to reject scraps and choose to go without. I guess that is one form of dying with dignity.
If the most desperate person manages to reject then the next desperate person gets checked how many pennies needs to be added for them to grab the offer. Letting simple suppply and demand balance it means companies profit from desperation and have incentive to maintain or create it.
I guess I’m confused how you reconcile the view that this would definitely happen with the fact that we’ve run the experiment and it doesn’t happen. The minimum wage in the United State is $7.25 and overtime pay at that wage would be $10.88, but Walmart doesn’t pay anyone less than $11 per hour*. If they actually had the leverage you think they do, they could make all of their employees work huge amounts of overtime and still pay them less than they actually do in reality.
I think the problem is that you’re assuming employers don’t compete for jobs, but they do, and they also put in effort to retain workers (it’s a waste of money to hire someone for low pay and then have them quit and switch to your competitor once they’re trained). It’s true that there are some people that companies don’t want to hire at all, but if a company doesn’t want to hire you in the first place, why would they want to hire you for long hours?
The average “front-line worker” pay at Walmart is $17 per hour.
I did guess that the state with highest minimum wage would allow for a corporation that wants to operate as one entity in multiple states to be above the local average in some locations (or the global one). Quick search seemed to indicate there are quite a lot of states at 10.8 which is not far off 11.
There would also be some PR costs to literally hit the minimum on the penny which would generate a small margin.
But I have also heard stories that Walmart actively assists its employees to get every benefit and support that they ared entitled to. If a persons pay comes in significant fraction from public money the private forces are not keeping it balanced. The persons are actually half-employed rather than fully employed.
I would also think that having a employee be in working 5 and never getting a raise would be too unbearable. So you allow atleast some progression making the average of go up. That is also one trick. Emphasise that there is going to be good pay in 2 years in order to keep money hopes low for those 2 years. At the very extreme this leads to things like paying with only “exposure”.
But yeah there is some tension.
I don’t see how any of these things change my point. If Walmart could offer desperate people any wage and hours they want, there would be no reason for them to pay over the minimum wage, offer raises, or help their employees get benefits they’re entitled to. They do all of these things because their employees do have other options and they need to do enough to make a job at Walmart at least as attractive as other jobs or non-jobs (going to school, not working).
I think this does not necessarily contradict the Prisoner’s Dilemma scenario.
As a thought experiment, to make things simple, imagine that everyone wants the same hourly wage for each of the first 8 hours, but 100% more for the ninth hour, and 200% more for the tenth hour.
So we start with a 8-hour workday for everyone; everyone making 8x per day. (As a thought experiment.)
Now suppose that the 8-hour workday is abolished, and everyone decides to take the extra two hours to make 13x instead (8×1 + 2 + 3), because it seems like a good idea.
But now the total amount of available hours has increased by 25%, which (according to Econ 101) means that work becomes somewhat cheaper, per unit. Instead of the expected 13x the employees will get 13y instead, for some y smaller than x.
If you decide, as an individual, that 13y is not worth ten hours of your time every day, and try to get your original 8-hour workday back, guess what, now you can only get 8y instead of the original 8x. Oops. Now, depending on the exact values of x and y, maybe 8y is still enough to feed your family and pay the mortgage. Or maybe it is not… and then you can only curse the fate and keep working 10 hours a day, because the old choice no longer exists. But now the fact that you keep working 10 hours a day is also preventing other people, as individuals, to get their 8-hour workdays back for 8x.
Note that the exact values of x and y depend on the structure of the market (how flexible is the demand for work). It is not even guaranteed that 13y is necessarily more than 8x.
The missing part is that the companies that kept the old schedule can now afford to pay less, because now more people want to work for them.
I don’t think this works. You’re going from a thought experiment with exact numbers that would agree with me, then throwing them away to use a heuristic and saying that somehow pay would go down.
Your thought experiment doesn’t really match the current situation, since >8 hour days aren’t actually banned, they just cost 50% more, but assuming there was an actual ban...
Specifically, the problem is that when the 8 hour work day is abolished, the supply of hours that cost $x stays exactly the same, while the supply of hours that cost $2x and $3x increases. The additional supply of more expensive hours doesn’t help the employers’ negotiating position at all. Or to be specific, the fact that Walmart now has a much larger supply of people willing to work for $24 per hour doesn’t help them hire people for $12.
One way this could effect things is to increase income inequality, if some people are 4x as productive, it would be better to hire them for as many hours as you can get than to hire additional lower-productivity people, but it’s weird to talk about this in terms of businesses exploiting people since total pay would actually go up.