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Comment by Marazan | Hacker News Reader

Productivity has been increasing. Wages have not.

How much has the productivity of low wage jobs increased? Are waiters today serving 2% more customers than two years ago?

They are serving people paying more for food.

Really? Data?

Wages haven't increased, but total employee compensation has increased when you factor in employer paid health insurance premiums. In effect our wage gains have been eaten by healthcare costs.

Isn't that kind of what increased productivity implies?

No. Productivity is essentially profit - not revenue - per employee.

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.

Unions/strikes were the way to counter this trend. But where are they nowadays? People are too busy too, and very well entertained. Also there is a huge compensation diff between well-paid and low-paid workers, larger than it use to be, this ensures that the more "resourceful" well-paid workers (often freelance) are not compelled to strike/unionize.

Productivity is not profit at all, it's the value produced so indeed ~revenue.

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.

Productivity is literally defined is the ratio of the output (revenue) to the input being measured. It has nothing to do with profit.

Higher productivity, but stagnant wages means productivity is increasing, but labor is not capturing the increase of their productivity and is instead being captured by shareholders or management.

Only shareholders. Mgmt is just another expense.

Management is an expense just on the books. They create most of the value of that business for themselves and shareholders, by themselves.

Can you explain? Why/how does mgmt create most value for shareholders?

I understand how they create most value for themselves, they earn more than the other employees and are more likely to own stock options.

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