E.g. if you have to pay people a lot to wash cars then those jobs will simply disappear.
Yep. Even back when I was growing (70s), a car wash in Germany was this big machine you drove into and your car came out clean the other end. You didn't leave the car.
When coming to California early 2000s, a car wash was this place that had someone take your keys, then some people did some prep, then the person who took your keys drove it through a similar but much smaller machine. To my great surprise, this machine didn't actually wash the car but really just made it wet. Then a bunch of people cleaned and dried the car by hand and called you when they were done.
I was...astonished.
I also remember American car companies struggling for profitability, and blaming wages. Except that German car companies at the very same time were paying their workers several times the amount (strong unions) and still raking in the cash.
The clear trend since the 90s has been for productivity to increase while compensation has remained more or less static.
Larger corporations absolutely can afford to pay more - much more. They choose not to, because the institutional narcissism of business culture in the US is set up to gouge employees to the maximum possible extent, not to consider employees as contributors/partners who deserve decent compensation for their contribution.
Wages are therefore constrained so that a profit is left after the worker has been paid. Ignoring other costs, profit is equal value produced minus wage paid.
I understand how they create most value for themselves, they earn more than the other employees and are more likely to own stock options.
What do you mean by that?
> E.g. if you have to pay people a lot to wash cars then those will simply disappear.
What will disappear? The cars? Cleanliness? What I think you mean is that people will demand fewer car washes, which is true. But so what?
They're more likely to just do it themselves.
1) In some sectors and job roles pay is what it is because there are other hard costs involved, the quantity of labor required is prohibitively high, and/or customers are not willing to pay $75 for <insert name of item or service>. Customers are willing to pay $25 for <insert name of item or service>, so you take 25 and subtract all the other costs involved as well as a profit margin to make it worth your while, do some multiplication (or division, as appropriate) to figure out how many of <insert name of item or service> each person can complete in a given hour, and end up being able to pay each person working on <insert name of item or service> $10 per hour. Whether or not someone is willing to toil away 8 hours a day on <insert name of item or service> for $10 per hour... well, that's what we're talking about.
2) What will disappear? The manual carwashes, obviously. Whether they get replaced by automatic ones (which eliminates the prohibitively high labor cost at a marginal increase in hard costs that decreases over time) or simply by people washing their cars themselves (which eliminates all of the above) doesn't really matter, as we're talking about labor issues and in either scenario the guy washing the car is out of his job. So what? So nothing, except the whole topic we're discussing.