While that's true, there is some market clearing price in which the activity just ceases to exist.
For instance, take something with a small marginal benefit like a dedicated person at a supermarket to bag groceries. It's a nice to have but the value to the employer is probably less than a $15 minimum wage. So you could say there is a shortage of grocery baggers since there is no one willing to do it at a market clearing price.
Doesn't mean we should do anything about it. There will always be some extra activity that would take place at a lower price, but it's worth while to notice that.
While reading the article, the now-less-common business of vacuum and TV repair came to mind. I imagine it's easier than ever to repair vacuums, with improved tools and free internet repositories of schematics. But I only know of one store still doing this within 5 miles of my house. I haven't asked former vacuum repairmen, but my guess as to the reasons:
1) Labor costs go up with inflation
2) Rent goes up
3) New vacuum prices go down
At some point in the past, the downward line of vacuum price crossed over the upward line of repair cost. That's when this profession cratered.
Cars may have a while until that price point hits. But the quoted mechanic's suggestion that engineers optimize for simpler repairs instead of simpler production may be something similar. If simpler production makes the price of a new car $X cheaper, but increases the labor cost of repairs over the car's lifetime by $Y, there could be a time when X > Y.
I remember reading an article about the last TV repair shop in Chicago many years ago in the Chicago Reader.
This would have been in the early 2010s.
The reporter asked the owner why TV repair was dying: were TVs getting too complicated? Help too hard to find or too expensive? Nope, the owner said it was 100% parts availability. The vast majority of business coming through the door he'd have to turn away because manufacturers didn't want him repairing their equipment.
There may sometimes be a tradeoff for manufacturability vs repairability but even when there is not -- holding everything else equal -- manufacturers will choose the less repairable option because they perceive it to be in their interest to do so.
I think even the parts availability argument starts to fall apart with scales of economy in manufacturing. I can walk into Best Buy today and walk out with a brand new 65" QLED 4k TV for $299 + tax. How much money is someone willing to spend to fix a $300 item? Even if the parts are free, you're better off replacing it if it's going to take more than an hour to fix. Keep in mind the overhead of finding a repair shop, scheduling a drop off, dropping off the TV, waiting for the TV to be repaired, picking up the TV again and remounting it. You can cut more than half of those steps out by buying a new one and it'll be available within the hour. At the rate of progression, it may even be an upgrade!
Most of the time the failed part is either the power supply board or a backlight and they’re usually available as aftermarket if you can’t be bothered to isolate the failed micro component or LED “bulb” and solder one in from a donor. Or a flex cable that just needs reseating.
PS is probably harder nowadays since it might be more integrated but not 10+ years ago.
It's really amazing how I quoted a repair shop owner saying the problem is parts availability and got two responses basically saying "nuh uh."
I have a more recent personal experience. My parents refrigerator went out. The repair man came out and diagnosed it as a bad inverter board and he'd get the part and come back in a few days. Great! The next day he calls my dad and tells him the part isn't available from the manufacturer so he can't actually fix it.
So I helped my dad go on an internet search and we eventually found an aftermarket (counterfeit?) board and installed it ourselves. My parents were thrilled they didn't have to buy a new refrigerator, but the repair guy got paid for the diagnosis but didn't make any money for the repair. I don't know if that's a long term sustainable business.
This is why when I replaced my appliances I chose GE/Hotpoint. GE does their own in house parts and service, and in particular Hotpoint is easy to fix with a screwdriver.
Tv repair made a lot more sense in the days of tubes which wore out quick but were easy to replace. Solid state generally lasts much longer and the parts that fail are not worth repairing.
This isn't true at all. Capacitors commonly blow on modern TVs and are cheap and easy to replace if you have the repair data.
A quick note to say that at our local repair cafe we do a roaring trade in vacuum repairs for peanuts (not literal peanuts; though some of our repairers do get peckish). If you're in Europe, there's chance you have one nearby. https://repaircafe.org/en
Could you please go in to a bit more detail on how you set that up, how you handle issues, etc? I'm a member of a makerspace, and there's been discussions about doing something similar. There's just not a consensus about how to go about it.
Reach out here: https://dallasmakerspace.org/faq/ (I'm not finding a good link for https://thelab.ms/ - another Dallas makerspace), but I'd suggest reaching out.
...generally I've seen weekly/monthly "fix-it" workshops as a kindof open-house / membership drive.
Probably best to 1) have people sign safety waivers, especially if they're not members 2) have people sign a "we can offer to help you try, but your widget might end up worse than before" waiver 3) run it as a volunteer outreach event with a focus on getting membership rather than a transactional "fix my ____ for free" outcome
We have one here in town maybe twice a year; I wish it was a monthly thing.
great idea. I get a "coming soon" type message for my town and search does not say where the next nearest is.
I used the map and found the two nearest I quite far. plenty where I used to live, and a lot in other parts of the UK. Good to see.
That is because there is not a cost for the disposal of the broken vacuum. Imagine if we paid by the weight of our trash. Some of the right to repair laws are trying to change that by requiring replacement parts be available to purchase. https://www.repair.org/know-your-rights
I really like the idea of adding taxes (or subsidies) to make repairing things more economical than replacing them, when this is not the case already. It seems difficult to fairly decide how to do this, but charging by rubbish weight is at least objective and easily measurable.
It can be argued that all taxes and subsidies are "artificial distortions" of market value, but capitalism strongly encourages externalisation of costs -- "the cost of making X" is often severely underestimated by "the cost of running a machine to dig X out of the ground".
TVs and vacuum cleaners are now a lot cheaper AND more reliable then they used to be.
Cars have become more reliable and relatively cheaper then they used to be, but they are a lot more expensive so have a long way to go until that point is reached.
TVs are definitely more reliable, but vacuum cleaners? I had a Dyson a few years ago and it didn't take long before plastic parts started to snap off. Meanwhile my mother in law's Electrolux or whatever is indestructible with occasional maintenance.
Also, new stuff just isn't designed to be opened up.
I took an old monitor that started failing to a local makerspace (which has a very popular monthly repair cafe), and it took some physical force to crack the case open. Once inside it was relatively easy to get the board out and find the leaking capacitors. Not exactly high-tech parts.
It was fun for me and for the volunteer, but I can't imagine anyone trying to do this for a living -- it would take a lot of time, and charging people for what the labor's worth would probably come close to the price of a new monitor.
> While that's true, there is some market clearing price in which the activity just ceases to exist.
The article cites a mechanic commenting on Ford CEO's remarks on lack of mechanics by referring to how Ford fails to pay rates for warranty repairs that justify the volume of work required to pull them off.
This suggests the root cause is the automaker's refusal to pay for warranty work at a market rate.
The article raises some points on how Ford both designed cars that are too expensive to repair and fails to pay mechanics to make their product line attractive for any maintenance business. This doesn't sound like a market efficiency issue.
Not just market rate, but being totally wrong! My read of that article is that it's not gonna take 40 minutes to do the job, but because Ford says it'll take that long, that's what they're getting paid for. It seems like the bigger issue is that Ford gets to say how long it will take and what they say isn't remotely right. There's similar weirdness with flight attendants and how they get paid, because they don't get paid if they're not in the air, or something like that. If you zoom out, it's about not being willing to pay enough money, and at that level you'd be right. But if we zoom in a little, the ways in which they're not getting paid enough is also relevant. If I want to get paid for a honest days worth of work, everyone else all the way to the top better also be honest. It sucks when they're not, but as long as my paycheck cashes, I've got better things on my plate to contend with.
It's not clear to me what the difference is between what you're saying and what the parent comment says. Not being willing to pay the wages necessary to hire someone is pretty much exactly what they're saying as well.
The implied criticism in the original comment is that companies should pay more. They ignore that in a lot of cases it doesn't make structural sense for a role to exist above a given price.
> It's not clear to me what the difference is between what you're saying and what the parent comment says.
The key difference is whether rentism plays a role or not.
It's one thing to claim that no one will pay a mechanic if it's too expensive. It's an entirely different thing to claim that some employers are abusing their position to pressure wages to stay low to maximize their profit margin at the expense of their employees.
There's a good litmus test: is there a massive wave of car shop bankruptcies due to lack of business? Or are car shop owners complaining they can't get enough employees to keep up with demand?
The auto repair business is still pretty fragmented in most areas so as a practical matter employers can't really pressure wages. Mechanics change jobs all the time to get a raise. The industry has a relatively high annual employee turnover rate.
They agree that corporations don't do things that aren't profitable, their implied disagreement is whether this is greedy/bad or merely rational/amoral.
In other words, the existence of a minimum wage implies there is also a minimum job, a job which if it were any less valuable to the company they wouldn’t pay anyone to do it.
> since there is no one willing to do it at a market clearing price
In your example there would still be people willing to do it, but the government doesn't allow it?
If the demand doesn't reach the minimum wage, is that even a shortage?
I'm not going to pay someone to punch me in the face but I wouldn't call that a shortage.
That doesnt make sense to me.
Seems like theres either a demand for something or there isnt.
And the amount of demand sets the rate of pay.
The invisible hand.
Demand is a function of price. At any given price there is a quantity demanded. To know the price you also need to know the supply function. There is a demand for socks but if no one is will to supply socks for less a million dollars, the quantity demanded of socks at that price could be 0.
In most markets seems like commodity level items and services like baggers and socks would have plenty of supply.
In a free market, commodity-level jobs will only happen at commodity-level wages. But it's not a free market, because of minimum wage laws. If you set the minimum wage too high, the number of baggers may go to zero, not because of supply but because of demand - the price is higher than any grocery store is willing to pay.
You can argue about the need for the minimum wage laws. You can argue about the morality of paying a living wage. But that's a different argument.
The demand curve might not be gradual, there might be demand for e.g. 1 million jobs at $15 but 100 at $16
In some countries there's something called a "minimum wage" that sets the minimum value of a job that is allowed to exist, and any job that isn't worth that amount ceases to exist, or has fewer people doing it, or has partial or full automation doing it.
There’s a demand, but the price we want to pay for “grocery baggers” is usually less than minimum wage, so the job usually can’t (legally) exist. The cost (wage) is fixed higher than the value added.