The reality is that wages have never kept up with productivity increase. Companies are extracting more and more productivity out of their employees, which translates to ever increasing profits.

But this is not an economical law. It's absolutely possible to sacrifice ever increases in growth for more worker time.

Not everywhere. There are many professions that do not take part in the growth of productivity. Medical Doctors for instance (even though some radiologists try hard to) are limited by interactions with their patients. The same holds for employees at points of sales, they only take part indirectly by selling more higher-priced goods.

So a shop owner that wants to stay open sees a 20% reduction in attendance by their employees. This is going to cost some people real money.

> Medical Doctors for instance (even though some radiologists try hard to) are limited by interactions with their patients

Strongly disagree, productivity increase is everywhere, surgery recovery times have been drastically decreased in the past decades, and recovery protocols accelerated across the board.

Just because doctors have a limit throughput of how many patients per day they can see, it doesn't mean that hospitals and clinics aren't increasing their productivity as a whole. If you are seing less of the same patients per week then your productivity has increased, as simple as that.

The key point GP is highlight is that productivity has basically decoupled from salaries since the 1970's, i.e. we are all collectively producing more value whilst collectively getting payed less in proportion to the value generated.

As a concrete example of doctors practices increasing their productivity: Video consultation preceded with automated triage to push more people to consultations with nurses, pharmacists etc. instead of going via a doctor first. The triage itself reduces the number of doctors consultations by removing a step in the process whenever the triage is successful.

Several companies does this (disclaimer: My employer is an investor in one of them).

> The key point GP is highlight is that productivity has basically decoupled from salaries since the 1970's, i.e. we are all collectively producing more value whilst collectively getting payed less in proportion to the value generated.

This thread is about Spain (which certainly has a lot of economic problems along with the rest of the EU), but wasn't that research mainly about the US?

My impression is some but not all of the cause is because "productivity" numbers are very confused because of how much exponentially more efficient computers have gotten. If you measure in 1970s computers, someone building a PC in 2020 has a million times more productivity.

Employees manning cash registers often also have other tasks they can do instead of operating the register for you - for instance fast food workers also make the food, and clothes workers stand there looking fashionable and tell you how good you look.

These are often things we'd all rather they be doing, in fact. Which is why McDonald's is still popular in Australia when the national minimum wage is ~20USD/hour and they have automated ordering stations.

On the question of MDs, here (in Europe, YMMV) we have doctors who have either have their own practice, and therefore work as little or as much as they want, or are part of hospital staff which is under its own separate legal regimen for work time (with more work hours than the average person, usually). In either case, I think they are not likely to be affected directly by changes to the "typical" work week.

The argument about increased productivity is a fallacy. Only the primary and secondary sectors have a long track record of increased productivity, in services on the other hands -which represent an ever growing share of the working population in western countries- productivity has been stagnating for multiple decades (in some industries it's actually receding, thankfully compensated by the few industries that have good growth).

not sure why this is downvoted. This is known as Baumol's cost disease. Policemen, school teachers, or painters today are no more (or barely more) productive than they were 50 or 100 years ago, yet their salaries have multiplied.

This is so because when salaries in productive industries start to rise every other sector also has to raise wages to attract any worker at all, which in turn raises prices. It's also why coffee is more expensive in Silicon Valley than in Podunk Idaho. It's not because baristas in California are more productive, it's because the region is richer and you can't buy your freshly brewed latte from China or India.

Some economists in Spain say that starting from this premise, and trying to apply it universally for the economy may have disastrous results.

The problem here is the effect on productivity. While there are some jobs where decreasing 20% of working hours while keeping productivity constant may be perfectly feasible, there are lots of jobs in Spain's precarious service-oriented economy where this is not possible.

For example, take all jobs depending on tourism: how is a waiter going to produce the same in four days of work than in five?

The same applies for Spain's public sector. Many public workers already have very good working conditions, but more importantly, the same effect described above also applies to them: it is not clear whether their working hours can be compressed without a significant loss of productivity.

To be clear I'm not against the idea, as there may be some merit to it if applied reasonably and on a tactical level, as part of much greater economic reforms. But I fear this is not what will happen; rather, populist politicians will take it and run with it because it sounds good, without any regards for its real implications, and without addressing the much harder and endemic problems of the Spanish economy such as the eye-watering unemployment levels and the lack of opportunities for our youth.

> how is a waiter going to produce the same in four days of work than in five?

By not being tired on the fifth, not taking wrong orders and not dropping glasses. Same as a software engineer would.

I see your point tho, and it is very valid. I am just playing angels advocate here.

But, iirc, earliest research on the topic was conducted in a hospital, which is a services business, same as a restaurant. Increases in production (I said production and not productivity) were found. Research is not solid.

> By not being tired on the fifth, not taking wrong orders and not dropping glasses

This is not an actual problem that needs a solution.

"The problem here is the effect on productivity."

If you make labour 'reassuringly expensive', then the only way to maintain output is to invest in capital deepening.

Which is the only place productivity comes from.

Capitalists need to start doing some capitalism.

I'm not sure your comment addresses anything I've said, except nitpicking a single sentence and taking it out on a tangent.

What kinds of capital deepening can one do for our tourism-oriented and increasingly public-sector-dependent service economy?

If that's your view, then that means that capitalist oriented structures running those operations cannot justify their profit share. Since capital depending - doing more with less - is the only reason they are allowed to take a profit in the first place.

We can, of course, move all those operations to the Job Guarantee if that is your view of capitalism.

Personally I'm more optimistic about improved methods and machinery.

> capitalist oriented structures running those operations cannot justify their profit share

They don't have to justify anything, they're profitable. Out compete them, with your 80% workers, if you think it's a better way.

> Personally I'm more optimistic about improved methods and machinery.

The companies are optimistic about machinery too, as it'll help them achieve the elusive 0% worker. It feels like you're trying to devalue humans out of any possibility of employment, not help them.

"Out compete them, with your 80% workers, if you think it's a better way."

Once there is a guaranteed alternative job available - to balance the power discrepancy - then competition can be turned up to 11. At which point these operations 'profit' will be seen as what it is - under bidding labour in a system that is systemically short of work.

Workers need that 'no deal' option adding. And businesses need the "what about the jobs, can I have a bailout" option removing. Then competition will be 100% fair - and effective. Driving forward the capital improvements we need to have a better standard of living.

> And businesses need the "what about the jobs, can I have a bailout" option removing.

Hell yeah. Welfare for business is bad.

> Workers need that 'no deal' option adding.

Well, yes. But to some degree you're supposed to build that for yourself. Without that requirement you have no incentive to save and work smart.

I don't think bosses should have the power (ie, society should disrupt it, you're right) to keep people on the edge of poverty so that they have leverage, but I also don't think people should have much say over their boss other than to refuse the job. Either unbalances the market.

The primary focus of capital deepening is deep-sixing workers. Capitalists capitalisming looks a lot like robots.

> This always sticks the bill with the only person actually paying to begin with, the business owner. If society thinks people should be paid more perhaps it should mandate paying more for the company's products to compensate for making them pay their employees more per hour.

You just said the business owner is the "only person paying" and then contradicted yourself by saying "people" pay more. Everyone pays for things because the economy is a cycle.

Intervening in the economy (eg with minimum wages and just giving people money) can improve the health of the economy by increasing money velocity; economists don't think it's strictly bad to do this anymore*. It can lead to inflation but that's fine, most developed economies don't have enough of it.

* https://noahpinion.substack.com/p/why-15-minimum-wage-is-pre...

> economists don't think it's strictly bad to do this anymore*

Those same educated voices also tend to support UBI and other ... less than fully considered social engineering ideas. When it comes to government mandates I'm cautious, especially because you can't usefully go back. Even if they're a PhD they're in a field where you cannot test your ideas.

If you want to pay a worker more, actually do that. Walk up to a barrista and offer them a monthly cheque to make up the difference between their wage and your proposed minimum. Your vote that Starbucks must pay more usually isn't accompanied with a certain minimum purchase guarantee that they can use to actually fund this.

> You just said the business owner is the "only person paying" and then contradicted yourself by saying "people" pay more. Everyone pays for things because the economy is a cycle.

Not usefully in that sense. I'm the only one paying my rent. You're not doing anything towards it. Even if you shop at my employer and indirectly pay my salary, you aren't putting money towards my rent. I'm the one who makes the food/fun/shelter tradeoff. If there's a slack month or unexpected expenses, I suffer.

If you actually paid the store an extra 15% line-item specifically to use to pay their employees then I would accept that.

" If society thinks people should be paid more perhaps it should mandate paying more for the company's products to compensate for making them pay their employees more per hour."

If you pay people more, then you can. Basic Henry Ford.

If people pay you more, then you can. Ford's money came from products and they have to be priced to cover his higher salaries. That helped his workforce but made cars more expensive for everyone else.

It also only worked because he had a huge first-mover advantage and wasn't facing price-pressure from competition. His grand plan could have bankrupted him in a week if the market hadn't been right for it.

"Ford's money came from products and they have to be priced to cover his higher salaries."

When you drive additional volume you get cheaper output due to economies of scale effects.

There isn't a fixed amount of stuff, any more than there is a fixed amount of money to make that stuff.

Sales depend upon people having the money to buy things. Wages are the major component of profit. And quantity expanding firms will always outcompete and destroy price expanding firms.

FYI communist Spain /s has a already minimum wage law and also an universal income one.

"communist Spain" I assume you are being ironic here