Companies that pay low wages a part of the American culture?

The american culture is one where we try to get the best deal for everything, and this has naturally begun to extend to employee salaries. Employees don't like this of course, but as long as we attempt to get the best deals on everything we buy, companies will obviously have less money to pay their employees in the first place.

Thoughts from people smarter than myself on this matter? I know some of you have studied economics pretty deeply where as I have not done so.

I think it's more like, people without skill have nothing to sell other than being a warm body.

What about when we as consumers attempt to get better deals on cars? Car salesmen tend to have decent skills in terms of selling a product, but will often times let a consumer push down the sale price by several thousand dollars. Naturally this will mean less money going towards the company, and also less money towards their paycheck. Is this not part of our culture of buying things for less than they might be worth and thus people ultimately earning less?

I think its just a part of business period to have a better bottom line.

That's not really American, it's human. It's the very basis of economics.

Consumers try to get the best deals on products, companies try to get the best deals on inputs (of which labor is a part), and workers try to get the best deals when selling their labor.

Everything is a negotiation.

@Serraph105: Microeconomics tells us that basically buyers of goods compete against other buyers of goods while sellers of skills are competing against other sellers of skills. Therefore, they are essentially different markets. The supply and demand of labor is different than the supply and demand of goods as I understand them.

we just have to wait untill people are ready to see a worth in others and themself that isnt based on Money, look or Job ...

it seems really difficult or impossible for todays people to just see themself as the people they are, if oyu take away their jobs, their familis, their media and devices ... suddenly nothing is left of these people ... and yet everyone is pretending this is teh way is has to be ... see this cliff? lets all just run in this direction and have the time of our lives while doing so ...

even worth, if you take this all away from them, they suddenly cant see a way or even reason to live or survive anylonger ... so for them it means 'losing everything' ... famous quote: Abondon all hope , ye who enter here

@BranKetra: Correct. They're separate albeit loosely coupled in the sense that they support and depend on each other.

Oh, man. You've coupled these concepts waaaaay too closely together. Increased profits do not make their way into workers' paychecks automatically just because they're there, and decreases in unit prices do not subtract from workers' pay by the same virtue (and in most cases, your example isn't apt as car salesman tend to work primarily off commission in which case negotiating off the sticker price can net them increased TOTAL commissions by increasing the scale/rate at which they sell vehicles). Workers' pay is negotiated by the workers and employers in (ideally) a competitive market.

Honestly, there's a lot at play here regarding the mechanisms and such. If you really want to learn more about this, I would recommend reading a few books in sequence. Adam Smith's The Wealth of Nations would be a good grounding in the basic concept at play. Thomas Piketty's Capital in the 21st Century would add a modern look at the labor market in an increasingly global and automated environment, and illustrate why the accumulation of wealth has increasingly become divorced from work. For a very quick look at what I THINK you're wrestling with, take a look at this IMF report from last year which illustrates the relationship between labor rates, capital returns, and growth rates.

I will take a look at it, thank you. Given that it's 39 pages it will have to take a backseat to my current homework, but I shall let you know when I've completed it.

The cost of labor is measured by their earnings. Due to minimum wage increases, lots of jobs have become obsolete because they no longer value the cost of that labor to the adjusted wage. We're moving to robotic services to replace the costly, unskilled workers that don't make profits better any better with wage increases. Lesser the wage, the more employees they can hire. Shareholders like it when earnings show a consistent growth.

Since Americans are used to affordable prices, that also means employees have to be paid less.

@hitomo: I do see a worth in other people that isn't based on money. Just last night I met a homeless person and we had a conversation. He seemed like a really smart and charismatic guy, and I enjoyed talking with him.

Then he asked for some money. Since the worth that I saw in him wasn't based on money, I didn't give him so much as a penny.

Automation would occur regardless of the price of the product. It is, literally, irrelevant in the decision whether to move from a manual workforce to an automated one.

For example, let's say I'm an employer who makes widgets that cost $5 to make, and I sell them for $7. If a new technology comes out that allows me to lower my labor costs so that it costs me $3 to make each widget, I'll move to the automated workforce.

The same would occur if I was in a monopoly situation and was able to charge $100 per widget. Even at a price that high, I would STILL move to the automated technology because it increases my per unit profit from $95 to $97. Even though I had substantial profit margins, the incentive to move to a cheaper form of labor still exists!

Wanna make good money.. open your own business.

Agreed, Most companies are following the Walmart model.

^^

It is ennobling for a poor American to labor ceaselessly so that he might earn only the bare necessities of life. It is ennobling for him to labor at the expense of his health, his happiness and his family so that corporate America might amass more wealth and, with it, more power to subjugate him and his fellow poor. In his bondage shall he find the comfortable reassurance of familiarity. And only in his vicarious indulgence of his masters' wealth shall he find joy.

To an extent, a low-paying job is part of American culture, imo. It's part of "paying your dues" and "working up the ladder". Most people I've met generally dislike the notion that someone can go to college, graduate, and immediately get a high paying job without any real experience outside of a short internship or something like that. People like that are pretty rare, however, and their lack of real-world experience eventually catches up with them because their work ethic is terrible and the incoming reality check they eventually experience cripples them.

There is also a character-building aspect to it as well; working for 8 bucks an hour as a dishwasher during high school teaches you the value of hard work, earning money, and investing/saving it for something you want. Hauling Christmas trees from the lot to people's cars also made me feel strong, capable, and independent when I was 14.

Low-paying jobs generally teach you a lot as well, which is invaluable to a certain degree. You don't want to be stuck in those jobs, don't turn them into careers, but yeah...I'd argue a low-paying job in the early years of your life (from 15 years old to mid-20s) is a pretty important thing.

I'd say I averaged about 10 bucks an hour from age 15 to 27, but during that time I:

-Worked as a dishwasher and cook, which taught me a lot about food prep, cooking, cleaning chemicals, and stuff like that. Making food for guest might seem like a daunting task, but entertaining for 20 people is an easy thing for me now. Cleaning up afterwards is always a hassle, but when I look at the dishes I think "Meh, I've had it worse". Later I'd get a more serious cooking job and I worked 80-hour weeks and, while it sucked and I eventually quit with no warning, it taught me what I was made of and pushed me to my limits.
-I worked as a carpenter; not only did I lose a ton of weight and get strong, but I learned how to install drywall, perform demolition, work various tools, and all kinds of other stuff.
-I got my first job as a brewer during this time and, while I was paid a disappointingly low wage (especially for a recent college graduate), it set me on my way to my career as a brewer. It was also the best four years of my 20s (and, thus far, my life), I made many connections, friends, and perfected my craft. I wasn't making it rich, but my life was rich (get it!? nyuk nyuk nyuk) in other ways. Plus all the beer I could drink, and I swear to god most women that like craft beer are chubby chasers because I got some good attention for being such a big guy.

Like I said, those jobs are not something you want to hold on to forever and turn into a career, and I generally scoff at people that bag groceries or work at Wal Mart and go on strike and complain they don't get paid enough. That's bullcrap.

But on the other hand, if you work 40 hours, you deserve a livable wage, so whatever. The world needs greeters and baggers I guess.

With that said, Americans work too many hours, work too many weeks per year, and don't get paid enough. We are generally taken advantage of by employers, get the shaft too often, and have too little power or choice in our careers. I Hadn't even heard of "paternity leave" until my current job, but apparently that is a common thing in most countries.

I agree with the idea that starting at a low wage gives you an idea of what money is worth as well as hard work. I started out at 5.15 an hour myself.

I do believe if you're past your mid 20s and haven't broken into double digit pay, then you really really fucked up.

I do wonder if people pushing for higher corporate taxes, or pushing for a high minimum wage realize that they are hurting businesses, especially smaller ones. It's a simple fact that if you're only making minimum wage than you have very little monetary value, and forcing that number up just means cuts to hours, benefits, OT, and yes jobs.

Quite a few companies have already left California because of the high taxes. Can't pay workers or taxes with 0 dollars coming in from a business that has moved.

and forcing that number up just means cuts to hours, benefits, OT, and yes jobs.

OT ?

Overtime.

The empirical evidence for his claim is, at best, dubious though. However, we've also typically seen modest/slow gains in minimum wage, so a jump from something like $8 per hour to $15 per hour in some of these locations is another ballgame. It will be interesting to see how a jump this large plays out.

the business should try to get it's employees to work for as little as possible. that is their duty as a business trying to make a profit. the workers should try to get their employers to pay them as much as possible for their labor. that is their duty as a workers.

the best companies are the ones that find the right balance between the two competing needs.

.. Except that doesn't match up with reality.. Worker's rights and unions have eroded and been attacked on all ends for decades now.. And some of the most successful companies in the United States have a infamous reputation in how they treat their workers like Walmart.. or Apple..

@sSubZerOo: well, ideally a corporation doesn't use it's politcal influence to **** over it's own employees. and a union doesn't use it's political influence to gouge it's employers... again, ideally :)

also, best doesn't just mean most successful. in my use i was referring to both successful and those with high employee satisfaction.

Automatation ? what for ? machines cost money ! instead of purchasing a machine there´s another thing that can be done ----> outsourcing !

There´s a bunch of dirt poor countries where labor is really cheap, look at the garment industry, now 99% of the clothes an american wears is not made in the USA.