New York Times contributing opinion writer Bryce Covert wants higher wages. Seemingly missed by Covert is that businesses want higher wages too. Yes, you read that right. Businesses actually want much higher wages. Low-wage labor is very expensive for obvious reasons: it's less productive as the low wages associated with it suggest, plus the turnover is high. That's why Henry Ford paid so well in the early 20th century, and it's why Amazon pays so well in the 21st. The poorly paid frequently quit, and turnover is very expensive.
Seemingly also missed by Covert is where investment is most concentrated. If investors truly pursued the cheapest labor, this would show up through voluminous investment into Detroit, Flint and Jackson, MS, and massive investment outflows from high-wage locales like Boston, New York and San Francisco. Except that the vast majority of VC investment is directed toward concepts in California, Massachusetts and New York. Readers should keep this in mind as this column progresses.
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