But if the labor is more difficult, why hasn't it become more valuable at the same time? If fewer people are qualified to do it, and/or if the market is growing, wouldn't those people be able to demand a raise - and get it?
The problem here is that the last part of this statement isn't happening. The technologies that are raising productivity in low wage jobs are also making it easier to train someone to perform those jobs, meaning that it isn't creating a rash of jobs that require particular skills, but turning skilled jobs into unskilled jobs. This means that any wage increases due to market fluctuations are overcome by the ability to add or replace workers without long training delays or expenses.
Wages, in our system, are based primarily on replacement cost. If the company can replace you, and the cost of doing so (in lost earnings, training costs, etc.) is less than what you are currently making, then it makes sense for them to do so. This drives the creation of technology that not only raises productivity, but reduces ramp-up time and costs to get a new employee up to speed.
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timeasmymeasure
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Date: 2016-04-03 02:17 pm (UTC)The problem here is that the last part of this statement isn't happening. The technologies that are raising productivity in low wage jobs are also making it easier to train someone to perform those jobs, meaning that it isn't creating a rash of jobs that require particular skills, but turning skilled jobs into unskilled jobs. This means that any wage increases due to market fluctuations are overcome by the ability to add or replace workers without long training delays or expenses.
Wages, in our system, are based primarily on replacement cost. If the company can replace you, and the cost of doing so (in lost earnings, training costs, etc.) is less than what you are currently making, then it makes sense for them to do so. This drives the creation of technology that not only raises productivity, but reduces ramp-up time and costs to get a new employee up to speed.