Raising the minimum productivity

I do not support a universal minimum wage. I leave room for the occasional occupation that may need some kind of lower limit on hourly rates, even though I have no examples and I don’t know how that would be constitutional. If there is any minimum wage, then it probably has to be universal.

I have many objections to the minimum wage. One I mentioned here before is that a person making what is now a minimum wage should be able to spend part of his earnings employing someone to help him out. I gave the example of a store employee whose job it is to keep the shelves stocked and well organized. He can do this job himself but he may desire having someone follow him around for company. Together they can talk, or the worker can listen as the other entertains himself with his smart phone. In such an arrangement, there will be occasional moments where the second person can help. I gave the example where a second set of hands to keep things stable as the employee rearranges things when a stack is starting to topple. That second pair of hands would be doing actual work, but only for a brief moment throughout a week or even month.

I have no doubt that such arrangements would be welcome by both parties. The second person is a relative or a close friend who does not want a job but enjoys hanging out with the first person. The first person would like to give the second a little allowance for being around when something is needed. The second person would make less than minimum wage because his employer’s cash flow is what is left over after taxes are withheld from the minimum wage.

There exist people who do not mind working less than minimum wage. They have some kind of arrangement where they personally have little expenses due to the generosity of their family or friends. Also, they desire the opportunity to hang out with another friend who is working.

I recall growing up in a small town with small businesses. These may be shops that have a good inventory but most of the time the shop is empty. Another example I recall is a bar/grill type business that is open during the day even though no one may come in on certain days. In those examples, I recall there often would be a neighbor or friend hanging out in the store. There would be an occasional conversation, but often they were just hanging out, reading a paper, or watching the television. The owner did not mind because it was company, but also because having someone in the shop makes the place less intimidating for a real customer to enter.

In those examples, the person hanging out was not earning any money, and the thought of being paid never occurred to him. The thing he wanted to do was to hang out at his friend’s shop.

In those situations, there would be occasions when the store owner would ask for assistance. Perhaps he was on the phone, the old kind with a cord, and he asked his visitor if he can check if a certain item is still available on the shelf. There would be other times when the visitor would volunteer to help, for example to clean up a spill. These are work. In the modern sensibility there would be a demand to have that person be an employee with at least a minimum wage. The job is to be around in case something needs to be done.

This kind of work is really a fractional job. The job came into existence the moment the job was needed. At that moment there was a very precise job description. In the case of something spilling, the job was to appropriately clean up the precise thing that spilled. Cleaning up a spilled ice water container is very different from cleaning up when a sack of flour breaks open. The second may never occur again for this particular helper.

In the examples I have in mind, there generally would be some compensation for the work. It may be a coin, or it may be a discount of a store item. The actual quantity was not proportional to the effort required. It was merely a token to express gratitude or merely acknowledge that the person helped out.

In some instances in larger small businesses, I’m thinking about family farms in particular, there would be small group of people hanging around, usually young boys but sometimes older men. They would be around in case something would come up where their help would be needed. On a farm, that occurs fairly frequently. The actual hanging around is more distant and less intrusive than the person sitting in a chair in shop. They would be outside the property, but they would make it apparent that they were approachable if something was needed. In such cases, the compensation may be a little more formal, but it would be based on the task, not the time it took to complete the task. The offer may be something like offering a specific price for a specific task, perhaps as simple as holding a ladder steady. In the case of steadying a ladder, that may take an hour or more, but the compensation would be for the task, not the duration. My point is that the outsider would agree to it. It is marginal income he otherwise would not be making. Part of the compensation may be to have something to do when there is nothing else to do.

This type of quick exchange of work for a token of appreciation was frequently depicted in movies, television, and stories. The image that keeps recurring to me is where one of more idle people are deliberately making their idleness publicly visible. Someone who has a job would approach them and kindly asked if they would like to help out, and sometimes offer something up front if they did.

The person needing help was keeping himself and perhaps his staff busy for their larger project, but something came up that needed an extra set of hands. It may be truck that needed unloading and the items were bulkier than expected. The primary staff would do the heavy work, they just needed someone to do something simple like directing their path so they don’t hit something or stumble. This particular task may never come up again, but it is valuable at that moment.

I believe there is a benefit to an economy the permits this kind of miniaturized jobs. The broader business is working well with its existing resources, but there are moments when a short burst of added resources would help. More importantly, the availability of such burst capabilities permits the primary business to work more slowly, and especially more carefully.

When the helpers are working under minimum wage guidelines, there is a pressure to speed up the tempo of activity to keep the workers busy for the full shift. This robs projects of the opportunity for down time to review the progress, or just to allow more time for things to settle.

When the helpers are working under minimum wage guidelines, there is a pressure to speed up the tempo of activity to keep the workers busy for the full shift. This robs projects of the opportunity for pausing to review the progress, or to consider whether there are unanticipated opportunities that now would be a good time to do. The need to keep a set number of people busy for their shift minimizes the opportunity to observe such opportunities, and prevents the ability to pursue something that would require more hands (or different skills) than currently employed.

Here I think of the various home projects I have contracted out. In many of these projects the initial discussions included some agreement that certain decisions would need to be made later. An example would be choosing a paint color after the basic remodeling is roughed out. Ideally I would have liked a day or more to make that decision as I considered the lighting at different times of day. Because the job had to be tightly scheduled, I had only a few minutes to finalize the choice. I do not regret the paint color choices, but my point is that I felt it would have been nicer if the project should have slowed down a bit.

The most satisfying projects were the ones that were more specific. For example, replacing the heating and air conditioning unit was a very specific, though expensive task. Once started, there was no need for pausing and there were no opportunities to exploit. That was true the first time I did that.

I had to replace it a second time where we included the replacement of the water heater at the same time. Ideally, those should have been two different jobs but it made sense to do it under the same contract. I would have liked the two projects to occur in succession, but instead they occurred concurrently. The problem was that the water heater needed to move. The question is where exactly it should move to. I would have preferred to see the finished new heating unit before deciding where the water heater should go. I was pleasantly surprised at how much more compact the new heating unit turned out but by that time the water heater was already installed in its new location.

A later project to move the laundry hookup ran into a problem because the water heater was in the way. It would not have been too expensive to move it again, but my personality is very much prone to the sunk cost fallacy. Actually, my personality is to embrace the wisdom of the earlier choice and then work around it. The laundry hookup succeeded by choosing the smaller-sized washer and drier. Although I am very satisfied with how things turned out, it would have turned out much differently if we had decided where to place the water heater after the new heating unit was installed.

These projects were cost efficient. The laborers worked steadily for the full day. They were gainfully employed for their daily wages. It was my own loss that I didn’t get the satisfaction of taking some time to consider options once part of the project was in place.

Similar problems occurred with the other projects. Overall they ran smoothly, but I missed opportunities because the projects moved too smoothly. Those projects included replacing the roof (where the vent was installed not where I would later prefer), remodeling the kitchen (where one of the cabinets ended up blocking a nice view), remodeling the bath (where the pre-ordered vanity cabinet was wrong for the location), remodeling the upper and lower floors at the same time where I erred in thinking where the piano would end up.

The latest project is a landscaping project that I practically begged the contractor to approach in increments, even requesting the project be subdivided into separate work orders. The problem was that my increments were too small. The contractor may have different jobs but they are in different parts of town. He might have been ok with the incremental approach, but the increments would occur rapidly in succession instead of with overnight or multi day pauses that I would have preferred. As with other projects, I’ll learn to live with the results, but I would have made different decisions if I had more time to think about how things were fitting with the larger landscape.

I grew up where we would do most of the work ourselves. As a result, I always felt guilty not doing more of these projects myself. Many of them could have been do-it-yourself projects. I didn’t have the time, and I would need help at many points. Also, I was inclined to employ someone to do the work.

Had I did the work myself, I would have proceeded much more slowly. Partly because it would have to be weekend jobs because I was working during the week. Also partly because I would have to do a lot of it by myself, learning as I was going, and generally working less efficiently than the professionals. Given that the house had only one kitchen or one bath, it did not make sense to go without a fully functioning one for very long.

I think there could have been a compromise where the contractors would work only half days or even 2 hour days and spread the work out over many more days. This would have given me more time to consider where things are heading and make appropriate choices. To avoid the cabinet mistakes for both the kitchen and bath, I would have had to order the custom cabinets after the rough in had finished. This would have requires some kind of temporary sink, but it would have given me time to realize what needed to be avoided.

These kinds of contractors can not work in such short intervals. Even if they had lots of local jobs that are easily moved between, the other jobs will probably want more dedicated effort, not permitting them to take a couple hours off to do a minor increment for my project. I explored using handyman services, but even they prefer at least half-day commitments, recommending combining multiple projects into a single visit.

To be clear, the jobs I am describing here are not minimum wage jobs, but they are wage jobs. To get a good project price, there is a need to optimize their labor. This means things have to move fast.

The same thing does happen in minimum or low wage jobs. Large franchise retail or food establishments are able to keep the prices low by optimizing their labor though what they offer to the public. An example is are the various fast food franchises where inside each is a very specific choice of offerings. There is little range of options to customize the meal for a particular person, but this is very optimal. It employs people at a consistent hourly rate. The older restaurant model was more personalized but also less efficient. The worker’s wages were partially paid by tips and this would certainly vary by the number of customers instead of hours worked. The effective wage for a working shift would vary greatly from one day to the next. If there were too few customers, the wage would be below the normal minimum wage, but at a level specifically set up for food service workers.

I had a brief experience working in that kind of job, although it was after-school work during high school. I was a dishwasher-machine operator, but I got to know the waiters and cooks. They were like any other group of workers I have worked with. They had their gripes about the job and about the unsteadiness of income. My impression was that by and large they were satisfied with the arrangement. Less productive periods brought in less money, but there was new opportunities to work together in different ways. I recall these low productive periods giving us a chance to know each other a little better, probably better than I got to know coworkers in later jobs.

I haven’t kept up with that industry to know if they still rely on tips for compensation. However, I have noticed the trend for new chains that force you pick a tip at time of ordering, even before the food is prepared. I imagine the workers get a steady wage, but that wage is partially funded by that requirement to add a tip.

Personally, I would rather there be a bill for a restaurant visit that separately itemizes the cost of the food, the cook’s labor, the server’s labor, and even the rental of the table. Something similar probably does happen at very expensive restaurants that I do not use. For the most part, people prefer to know exactly what a dining experience will cost before they go.

It was after my most recent landscaping project that I really began thinking about how minimum wage, or even associating work with an hourly wage, affects work. My project included the use of rocks along the borders. I used two sizes of rocks, very small ones that are good to walk on, and large ones mostly for show. While the contractors were here, they were insistent that I pick out exactly where each would go. I thought I would consult with the lead to discuss the options but they wanted to buy the rocks immediately and needed to know how much to get.

Days after the project was completed, I saw that the design was not going to be practical. I then began a project of sorting and rearranging the rocks by hand, often one rock at a time. This stretched out over a couple days as I constantly revised my ideas. While I was content doing this, I was thinking about when I was growing up. If I, as a young boy, would walk by a neighbor doing this, I would probably stop and ask what he was trying to do and whether I could help. I would honestly ask without expecting anything in return, but there would probably be some kind of compensation involved. If that hypothetical person was doing what I was doing, he would not know exactly what he is doing. He knew what he wanted to do right now, but he also knew it was going to take several days of sporadic effort to get to something he liked. I would have liked to have helped him. Similarly, if someone had asked to help in my folly, I would have welcomed it.

This was a trivial task, but the basic idea that came to me is the idea of working slowly, and having someone help me work on something slowly.

I generally like doing everything slowly. It has taken me weeks to decide where to hang a new tapestry that I bought for one location but after seeing I realized I may want it in a different location. Eventually, I will hang it. This is definitely a one person job, but it still illustrates the uncertainty as to when it will actually happen.

I prefer using hand tools instead of power tools. When I first moved to the house, I did buy some power tools for the yard. I got one of those things with the spinning whip that cuts tall stuff, as well as a power lawnmower and a power leaf blower. I quickly retired them with the manual variety even when they don’t do as good a job.

The neighbors use a professional grounds keeping company. That company arrives in a truck with a trailer, and two to three workers jump out and immediately employ multiple types of power tools to tackle the yard. There is less than 30 minutes between the time they arrive and when they leave. Their work looks good, and it is very consistent.

As they are working, I wonder if I can hire someone to maintain my yard with hand operated tools instead. It would take longer, and require a lot more work. Also, I would like someone to do the different tasks separately. Cut on one day, and rake later that day, or the next day. Tackle the taller growth on a different day still, or even on a completely different schedule.

Their industrial approach keeps the tall stuff from getting tall. I really like allowing tall stuff to grow tall and then cutting them when they get too tall.

My desires do not fit with the wage model. Each visit needs to be consistent in terms of what is done and how long it takes. Each visit needs to be done as quickly as possible to keep the costs down, and the costs are sustaining the wages of the workers. This makes complete sense. My observation is that is a different kind of grass cutting service, one that is done by someone who does not think it is his career to do so.

Another example of the wage pressure occurs with tree services. This county once prided itself as an urban forest. I think they still do, but the claim had stronger basis several decades ago. In the interim, the county is losing large trees at an alarming rate. On any day, you can probably hear the distant chain saw from someone cutting something. When you call a tree service to remove say a single limb, they come and give an estimate but then glance at the tree and suggest other limbs to cut, or even offer to remove the entire tree. They would also glance at the yard an spot other candidates for tree service. They are offering this a good deal to the homeowner, but what they are really doing is making sure they can gainfully employ their staff for the project while still keeping the per-item costs reasonable to gain the homeowner’s future reference. The end result may indeed be a happy contractor and a happy home owner.

The problem is that we are losing a lot of trees, or replacing a lot of mature trees with saplings or even bushes that will never grow so tall. This may be a good thing, but I think the trend is strongly influenced by the concept that tree service is a career with an expectation of consistent work and consistent compensation.

I tend to think it is a bad thing when the initial request was to remove a single limb and that would have satisfied the homeowner. Increasing the job for the sake of improving the productivity results in hasty decisions that removed things that otherwise never would have been removed.

Introducing or increasing the wage expectation of a job inevitably increase the expectations for higher productivity. This occurs even in knowledge work professions such as software development where the sought after skill is the ability to innovate and to implement relevant algorithms, but where the work is measured in terms of number of function points created per day.

I recall a specific example where a simple algorithm was divided into two for no reason I can see other than to have two function points instead of one: the change did not help the algorithm perform better, and probably made it harder to understand. To be fair, there were multiple motivations for doing this, including to adopt some new trend for how software should be arranged. Even so, we got credit for creating two things instead of one.

I may have this wrong, by my impression was that in the last century, there was a concept of a salaried position where a person would get paid the same no matter how many hours he worked. The expectation may have been on average there would be 40 hours per week, but there may be busier days than other days. This worker would be evaluated on his work product, perhaps with some monthly or quarterly report, or he would be evaluated in semi-annual job appraisals.

I mention this because one of my early jobs was with a company that definitely operated this way. I came at the time when they were being forced into the new paradigm that required workers to account for their efforts for each hour of the day with quarter hour resolution. Each unit of time needed to be assigned to one and only one charge code, and each of those needed a description of what was done. The paradigm further stipulated that each person should work precisely 8 hours per day and be assumed to have a half hour off for lunch. The entire work week had to add up to 40 hours.

This new approach was imposed for government contracts for a good reason of combating cost shifting practices. There was a problem with contractors working on a contract that was facing cost overruns and billing the work to a contract that had more money. There was room to do this because the nature of the work, but this was not looking good.

Although the jobs remain salaried with a consistent monthly paycheck, the rules effectively turned the job in a time-clock hourly wage job, the number of hours were fixed. I believe this fundamentally changed the nature of the work away from conceptual or knowledge work and instead toward quantifiable work for each hour. In my case, I recall at first being permitted to spend time reading 20 year old text books on some topic, and then being told I could not do so unless the customer specifically requested it. Much later it further devolved into having to have specific training to be a contract requirement. The presumption of the contracts was that everyone would already be trained.

One of the arguments against minimum wage is the aspect of training new people. Training people is not productive. It takes away time from the person who could otherwise be productive. It also spends money on someone who is not yet productive. With the imposition of a standard wage floor, the employer was unable to provide on the job training for many things. Instead the prospective employee needed to seek the training on his own time and cost. There quickly arose an entire industry of certification training courses that met this need. In my experience, this type of training is a poor substitute for training on the job. Even for well standardized practices, the application of the practice in the specific business needs is very different than what the courses cover.

This post has gone on too long. The point I am trying to make is that introducing an hourly rate for wage automatically brings with it an expectation for an hourly productivity. Mandating an increased minimum hourly rate simultaneously demands a increased productivity. Wages have a tendency of making work when work is not needed or before that work is better performed in order to sustain the worker’s hourly productivity. Also, the wages discourages the practice of pre-emptive learning or just waiting around for when the precise skills are absolutely needed.

In the modern context, a shop owner with that lingering visitor would need to ask the visitor to leave the premises and come only when called, and leave immediately afterwards. The same will play out with wage earners. Previously a low wage person could linger at the job site a full day when he is only needed for a few hours. Now the higher wages will force the employer to call in the worker only during peak hours when needed. This robs both the opportunity of using idle time to do something unexpected, benefiting the owner with getting the job done quickly, and benefiting the worker with a new experience or at least something to do.

For the worker, there is a trade off. He could work fewer hours with a higher wage, and spend the remaining unpaid time being idle away from any work related activity. Alternatively, he can work more steadily with a lower wage and make himself available for the sporadic work that comes up.

For the employer there is also a trade off of having to compromise larger objectives in order to optimize the productivity of workers, whereas before he had the luxury of waiting for when those tasks would be more appropriate to accomplish.

For the economy as a whole, there would be less work wasted on the sole purpose of showing productivity.


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