One fact many people don't realize is that in order to achieve broad-based wage growth, we will have to face GDP losses. This is because there are many businesses that depend on cheap labor to exist. As wages rise, these businesses will start to fail, reducing GDP.
We should see this scenario (wage growth with stagnant or decreasing GDP) as a healthy adaptation. The danger is that politicians will react to the bad GDP numbers with dumb new economic interventions.
This is why—despite what your econ 101 models might lead you to believe—modern, data-driven economic research suggests that increases in the minimum wage almost always lead to increased GDP. Worth noting that there's also many other effects that may contribute to this observed impact[2]
Yup. Few people talk about fair wage rebalancing as a driver of inflation, but it's inevitable if the bulk of wage growth goes disproportionately to low earners who produce widely consumed goods/services, whose prices were deflated due to low wages.
As an extreme example, suppose all farmers were unpaid slaves. Slavery gets outlawed, and farmers now get paid. Food prices rise dramatically, resulting in massive inflation overall (and thus a fall in real wages for everyone except farmers).
> One fact many people don't realize is that in order to achieve broad-based wage growth, we will have to face GDP losses. This is because there are many businesses that depend on cheap labor to exist. As wages rise, these businesses will start to fail, reducing GDP.
> We should see this scenario (wage growth with stagnant or decreasing GDP) as a healthy adaptation. The danger is that politicians will react to the bad GDP numbers with dumb new economic interventions.
As a European who loves work culture in America, I'm afraid that America is copying the worst aspects of European culture.
Europe is awesome, and I'd love to see America copy us more, but these kind of incentives are the wrong thing to be copying.
To expand - training and educating yourself is hard work. Why are we rewarding people whose training is being able to drive a van? It's not about it being "honest work" (of course it is) or "hard work" (of course it is), or "these are important jobs, we need someone to do it" (of course) it's about - do we want to incentivize that young people aspire to this? This is not a recipe for a winning country.
Wow, that's incredibly generous of you. If I start listing out thousands of other professions that are not well paid, do you promise to loudly state your intention of generosity on an internet comment? It's the least you could do, after all.
Awesome news! I'm glad for the workers and their families. That is a great wage and one that will pay dividends in terms of their health and the health of their communities.
Good. These people have one of the most difficult and essential jobs out there. Bezo became one of the richest people in the world because these drivers were some of those who reliably delivered the last mile of Amazon's business.
Full time drivers were/are doing pretty good, particularly those with decades of time at UPS. Part time drivers (the bulk of their workforce) were not. That was the main thrust of the recent negotiations (that and AC).
But yes, package handlers and sorters next, please.
Great news if you are lucky enough to drive for UPS. I would be envious if I was a driver for another firm. The average salary for a delivery driver in the US is around $50K. But maybe this will pull up wages for the rest of the industry.
In Belgium average tech job salary is 36K to 87K EUR/year (from this source [1], it's just one source but it's just to back up my experience, also it really leans much more to the 36K, 87K sounds like too much), before taxes
It's mind boggling how much higher salaries in the US are.
That total compensation figure includes both salary and benefits (healthcare, retirement income, etc.) before taxes. A family healthcare plan could have an annual employer cost of $25k or more, plus the employee contribution.
A lot of numbers are being thrown around in the article. $170,000 a year and Drivers discussing their hourly pay of $40 or more routinely make national headlines. and Prior to the new deal, the company said drivers earned about $95,000 in pay annually on average or about $42 an hour, and another $50,000 in benefits and raised starting pay for part-time staff to $21 an hour and the new contract would provide a pay boost of $2.50 an hour this year and $7.50 an hour over the five years of the deal.
The $170k number comes from the employer, and the article expresses no curiosity about which end of the confidence interval at the end of 5 years that benefits fall on. Future cost-of-labor numbers from the employer may incorporate burden and liability forecasts as well, as those are considered to be a portion of labor expense when discussing compensation. The article also seems to be doing its own math to arrive at hourly rates, naively assuming that an entire amount is paid compensation and doesn't include benefits or overtime.
The base rate being increased from (apparently?) $18.50 to $21 is a red flag that should have us asking critical questions. Delivery driving is destructive to one's body and dangerous. $18.50/hour is a ruinous rate for work that's not unlikely to change the usefulness of your body.
Does your sense of your senior dev pay include considering your benefits? Back when I was an underpaid junior dev, I once had my employer go and attempt to convince the software devs that we were making money than we thought via a statement outlining benefits. It more than doubled my salary... but most of it would come with any software job that wasn't self-employment/contract work.
Let's be honest, they're probably doing more important work. But keep in mind this is including all costs of benefits, etc. If you're making less than that as a senior dev in the US you might just need to change job not career
The company might be doing some funny math with the value of the benefits: $50,000. That could include things you might never use, like IVF assistance.
Interesting. I too am a senior dev and I really don't feel the need to compare. I'm doing something I'm good at and I'm compensated well for it. I am getting mine, and I want everyone else to get theirs too. It's not a race. It's not a competition. It's not about being/feeling important.
Do you want back pain and constant work for 10 hours?
I don’t. And I did make way more. But keep in mind that physical labor jobs are continuous work and hard on the body. As a swe I could work an hour, go for a walk to think, work another 2 hours, play ping pong with the PM while we discuss something, and enjoy multiples in RSUs. Just saying.
Holy crap! I'm switching jobs! I hate technology and I want to work outside, this amount of pay seems crazy but if it's true I'm definitely becoming a driver
Also check out USPS, they're hiring like crazy and have good benefits. It won't be as cushy or well-paying as our tech jobs, but I'm thinking about it, too. I'm so tired of tech.
Drivers are definitely needed, and it's very different work from programming. But, be prepared to work for decades before realizing those levels of pay/benefits. You'll also probably have to fight for one of the coveted full time positions.
> UPS said the average full-time driver would earn about $170,000
Why is the _BBC_ using the corporation as a source for a headline number like this? Are they now just corporate mouthpieces like the US media? This number is surely inflated (including potential benefits not everyone will use like IVF, disability, etc). Very poor showing BBC.
Just pay them a million a year each, why should they be anything short of rich?
Even if the company could afford to pay the drivers $170k/yr without increasing shipping costs, they're still going to increase shipping costs. So this just gets passed on to the consumer rather than the company, much like tipping. And at a time when discretionary spending is down tremendous, this just means more people will get laid off. I will eat my hat if there are no mass layoffs in the next year.
According to the article:
UPS "now expects its adjusted operating margin this year to be 11.8%, down from 12.8% expected in May. The drop also reflects a fall in shipments as the economy weakens."
Their shipping prices are determined by what the market will pay and their competitors prices. Employee compensation affects UPS profit/stock price.
It depends on what you mean by mass layoffs. In post-Jack Welch America, there is ALWAYS some company doing massive RIFs. Often when they're already profitable.
UPS makes about $75 Billion per year in profit. This is a $25k increase after a few years of record inflation. There are 300k teamsters at UPS (including other jobs like package handler). If 1/3 of those employees are drivers, we're talking a 3% reduction in profits. They can afford it. (also worth nothing this $170k is also including all benefits).
>this just means more people will get laid off.
The threat of a strike makes this much less likely.
Anecdotally UPS drivers are much, much better than Fedex and Amazon. They don't toss my packages or leave them sitting in the rain etc...
[+] [-] culi|2 years ago|reply
https://labornotes.org/2023/08/wage-gains-ups-have-amazon-wo...
Really great to see people organizing again
[+] [-] d_burfoot|2 years ago|reply
We should see this scenario (wage growth with stagnant or decreasing GDP) as a healthy adaptation. The danger is that politicians will react to the bad GDP numbers with dumb new economic interventions.
[+] [-] culi|2 years ago|reply
[0] https://www.epi.org/publication/bp357-federal-minimum-wage-i...
[1] https://www.nber.org/system/files/working_papers/w25761/w257...
This is why—despite what your econ 101 models might lead you to believe—modern, data-driven economic research suggests that increases in the minimum wage almost always lead to increased GDP. Worth noting that there's also many other effects that may contribute to this observed impact[2]
[2] https://www.piie.com/blogs/realtime-economic-issues-watch/hi...
[+] [-] MontyCarloHall|2 years ago|reply
As an extreme example, suppose all farmers were unpaid slaves. Slavery gets outlawed, and farmers now get paid. Food prices rise dramatically, resulting in massive inflation overall (and thus a fall in real wages for everyone except farmers).
[+] [-] sdfghswe|2 years ago|reply
> We should see this scenario (wage growth with stagnant or decreasing GDP) as a healthy adaptation. The danger is that politicians will react to the bad GDP numbers with dumb new economic interventions.
As a European who loves work culture in America, I'm afraid that America is copying the worst aspects of European culture.
Europe is awesome, and I'd love to see America copy us more, but these kind of incentives are the wrong thing to be copying.
To expand - training and educating yourself is hard work. Why are we rewarding people whose training is being able to drive a van? It's not about it being "honest work" (of course it is) or "hard work" (of course it is), or "these are important jobs, we need someone to do it" (of course) it's about - do we want to incentivize that young people aspire to this? This is not a recipe for a winning country.
[+] [-] isykt|2 years ago|reply
[+] [-] jhgfjhgfjhfgjhg|2 years ago|reply
[+] [-] mylons|2 years ago|reply
[+] [-] brvsft|2 years ago|reply
[+] [-] kylehotchkiss|2 years ago|reply
[+] [-] johngladtj|2 years ago|reply
[+] [-] denom|2 years ago|reply
[+] [-] jhgfjhgfjhfgjhg|2 years ago|reply
[+] [-] bluefishinit|2 years ago|reply
[+] [-] gunapologist99|2 years ago|reply
[+] [-] giantg2|2 years ago|reply
[+] [-] falcolas|2 years ago|reply
But yes, package handlers and sorters next, please.
[+] [-] placesalt|2 years ago|reply
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] francisofascii|2 years ago|reply
[+] [-] Aardwolf|2 years ago|reply
It's mind boggling how much higher salaries in the US are.
[1] https://www.paylab.com/be/salaryinfo/information-technology?...
[+] [-] TYPE_FASTER|2 years ago|reply
UPS provides a breakdown for the previous $145k figure here: https://about.ups.com/us/en/our-company/great-employer/real-...
[+] [-] gdsdfe|2 years ago|reply
[+] [-] nabilhat|2 years ago|reply
The $170k number comes from the employer, and the article expresses no curiosity about which end of the confidence interval at the end of 5 years that benefits fall on. Future cost-of-labor numbers from the employer may incorporate burden and liability forecasts as well, as those are considered to be a portion of labor expense when discussing compensation. The article also seems to be doing its own math to arrive at hourly rates, naively assuming that an entire amount is paid compensation and doesn't include benefits or overtime.
The base rate being increased from (apparently?) $18.50 to $21 is a red flag that should have us asking critical questions. Delivery driving is destructive to one's body and dangerous. $18.50/hour is a ruinous rate for work that's not unlikely to change the usefulness of your body.
[+] [-] syntheticnature|2 years ago|reply
[+] [-] nic_wilson|2 years ago|reply
[+] [-] culi|2 years ago|reply
[+] [-] leetrout|2 years ago|reply
For the work we do as software engineers we are beyond well compensated.
[+] [-] natdempk|2 years ago|reply
[+] [-] isykt|2 years ago|reply
[+] [-] t3rabytes|2 years ago|reply
[+] [-] HumblyTossed|2 years ago|reply
[+] [-] moomoo11|2 years ago|reply
I don’t. And I did make way more. But keep in mind that physical labor jobs are continuous work and hard on the body. As a swe I could work an hour, go for a walk to think, work another 2 hours, play ping pong with the PM while we discuss something, and enjoy multiples in RSUs. Just saying.
[+] [-] heavyset_go|2 years ago|reply
[+] [-] usaar333|2 years ago|reply
If you are doing below that as a dev, probably worth first changing companies.
[+] [-] throwawaaarrgh|2 years ago|reply
[+] [-] coldpie|2 years ago|reply
[+] [-] falcolas|2 years ago|reply
[+] [-] fisherjeff|2 years ago|reply
[+] [-] gamesbrainiac|2 years ago|reply
[+] [-] mgarfias|2 years ago|reply
[+] [-] macinjosh|2 years ago|reply
Why is the _BBC_ using the corporation as a source for a headline number like this? Are they now just corporate mouthpieces like the US media? This number is surely inflated (including potential benefits not everyone will use like IVF, disability, etc). Very poor showing BBC.
[+] [-] valianteffort|2 years ago|reply
Even if the company could afford to pay the drivers $170k/yr without increasing shipping costs, they're still going to increase shipping costs. So this just gets passed on to the consumer rather than the company, much like tipping. And at a time when discretionary spending is down tremendous, this just means more people will get laid off. I will eat my hat if there are no mass layoffs in the next year.
[+] [-] axus|2 years ago|reply
Their shipping prices are determined by what the market will pay and their competitors prices. Employee compensation affects UPS profit/stock price.
[+] [-] jewayne|2 years ago|reply
I think your hat and your stomach are safe.
[+] [-] sarchertech|2 years ago|reply
>this just means more people will get laid off.
The threat of a strike makes this much less likely.
Anecdotally UPS drivers are much, much better than Fedex and Amazon. They don't toss my packages or leave them sitting in the rain etc...