4 ms·

This supposes a level of knowledge and efficiency which labor markets don't have. Even the boss in most cases doesn't know what the employees are worth per hour

This supposes a level of knowledge and efficiency which labor markets don't have. Even the boss in most cases doesn't know what the employees are worth per hour, let alone what the employees know. Millions of people, including me, have never negotiated for higher pay; I worked for minimum wage in college despite being obviously worth more. Naturally, a lot of these meek souls wind up as low-wage labor. Is it better that they should rely on food stamps while their employers reap the surplus, or that the government should set a minimum wage? It is likely that some workers really aren't worth $15/hour, and it's even within possibility that some bosses might realize that and fire them. But the net effect on low-wage workers still stands to be much more positive than a crude efficient-market model would show.

daenz 9y ago
>I worked for minimum wage in college despite being obviously worth more. The market didn't think so. If you think you're worth more, you have to push for it, since the market can't read your mind argue on your behalf. >Naturally, a lot of these meek souls wind up as low-wage labor. That's really the crux of it. People who can't/don't/won't negotiate expect the same income from people who do negotiate and make themselves appealing to employers. Since they don't get it, they're upset, so they try to make laws to mandate everyone gets X. The problem is, they still can't negotiate and sell themselves, so they still make less than the people who do, while the economy adjusts to the new baseline income of X.
- chillwaves 9y ago
  Your comment was already addressed by the person you are replying to. > This supposes a level of knowledge and efficiency which labor markets don't have.
  - daenz 9y ago
    My comment was explaining that negotiation is a stand-in for knowledge and efficiency. The comment I was replying to implies that bosses should just know exactly how valuable a specific employee potentially is. It's impossible, which is why you have to stand up for yourself.
    - comicjk 9y ago
      > It's impossible This was actually my point. Wages have a large random component (negotiation might help the randomness but doesn't fix it). We need a decent lower limit, or else the lower tail of the random distribution leaves too many people as working poor.
      - daenz 9y ago
        Raising the artificial lower limit just shifts and compresses the lower tail and those just above it (see: wage compression), until the rest of the economy adjusts and pushes the rest of the wage distribution back to its original relative position. In the meantime, while that adjustment is happening, you've temporarily helped wages but hurt employment opportunities for people who need it most (the low wage people who can't sell themselves). Interesting point about wage compression is how demoralizing it is. I've talked to employees who have first hand been subject to it. The general sentiment is "Why do I suddenly make the same amount as people who are less skilled and less experienced than me? I worked hard to get ahead. How is this fair?" And this sentiment was from very left progressive individuals.
- comicjk 9y ago
  > The market didn't think so. "The market" is not a helpful model for this interaction. My boss paid me the lowest legal wage, and I didn't ask for any more. Imagine a driver pointing to a bridge on a map when in reality the bridge is gone. The map is helpful in many situations, but it will not help in getting over that bridge. > you have to push for it, since the market can't read your mind argue on your behalf. OK. What if I can't? In my case, it was anxiety, which affects at least 18% of the US population. In other cases, it's the risk of alienating a contact or going too long between jobs. If I can't argue, then by your own argument the market wage-setting mechanism must necessarily fail. At the lowest pay levels, I could become a burden to the public despite being employed, which doesn't do anyone any good. > People who can't/don't/won't negotiate expect the same income from people who do negotiate Obviously, a lack of salary negotiation decreases one's salary. Minimum wage laws don't repeal that fact, but they set a limit on how low salaries can go, reducing the number of charity cases among the working poor. It doesn't give bad negotiators the same income as effective negotiators except at the very bottom of the labor market.
  - daenz 9y ago
    > My boss paid me the lowest legal wage, and I didn't ask for any more. > What if I can't? In my case, it was anxiety I'm sorry you have anxiety, but if you don't even try to participate in the negotiation process, you can't expect a lot of sympathy for you when you complain that you're not paid what you think you're worth. Negotiating inherently makes most people anxious (myself included), but you learn to do it because it's a invaluable skillset to furthering all aspects of your life. Frankly, I can't think of a single line of work that doesn't benefit from good negotiation skills. I hope you don't take this as confrontational.
    - comicjk 9y ago
      You're asking people with broken legs to walk it off. Clinical anxiety is not easy to treat, and minimum-wage workers don't generally have the time or resources to go about it. In non-psychological issues, the risk of going an extra few months without a job can be hard for minimum-wage workers. They might not be in a position to accept the tail risk even if the average outcome of negotiating the extra couple of dollars would leave them better off. I don't mean to ask sympathy for myself; I'm doing fine now, and I think you're right that I could use some negotiation training (I do read self-help books about it from time to time). I bring up myself just to make clear that this kind of issue can affect anyone. For people stuck in that situation (especially with kids), I feel a great deal of sympathy, and I'm interested in anything (minimum wage, training, Earned Income Tax Credit) which can help them.
- FLUX-YOU 9y ago
  >The market didn't think so. If you think you're worth more, you have to push for it, since the market can't read your mind argue on your behalf. The biggest issue is price discovery and knowledge of wages. There's not a stock ticker that everyone follows for "X-language Developers" getting hired at a particular price. Such a stock ticker would be dumb because too much goes into pricing people's work, but it highlights that there is more going on than you are able to discover, and some feel that's an unfair market because the businesses employing most people hold the cards in their favor. If it's a private company, you can't see their financials to see if they're telling the truth when they can only afford $X. It's only with time and effort that the cards start going to your hand, but to get there, the market might have already taken advantage of your underpaid work (that you agreed to, ignorantly or not). The market has the power to lie and collude to lower your price if you don't hold these cards. I, too, have the power to lie and collude to increase my price. And while most of us should just simply strive to be indispensable, discovering indispensable skills is also a lot of work. If I wanted to truly maximize my price, I would have to apply to every job available to me (time-consuming because we don't have a product for this) at every single company I could legally work at world-wide. Then I just pick the highest paying one that would hire me. That's a pretty easy concept, but no mechanism like that exists in the job market, and for that reason, it's a pretty terrible market to find your price. >Since they don't get it, they're upset, so they try to make laws to mandate everyone gets X That is a form of negotiation and that's what they did in Seattle. Just because I won't play my boss's game doesn't mean there isn't another game I could play. This shouldn't be surprising, but even political lobbying has risks of not winning. Now, if businesses want to come back and try to argue that this is hurting them, then that's part of negotiations as well, and it's entirely possible that businesses can convince Seattle's population.

daenz 9y ago

>I worked for minimum wage in college despite being obviously worth more. The market didn't think so. If you think you're worth more, you have to push for it, since the market can't read your mind argue on your behalf. >Naturally, a lot of these meek souls wind up as low-wage labor. That's really the crux of it. People who can't/don't/won't negotiate expect the same income from people who do negotiate and make themselves appealing to employers. Since they don't get it, they're upset, so they try to make laws to mandate everyone gets X. The problem is, they still can't negotiate and sell themselves, so they still make less than the people who do, while the economy adjusts to the new baseline income of X.

chillwaves 9y ago
Your comment was already addressed by the person you are replying to. > This supposes a level of knowledge and efficiency which labor markets don't have.
- daenz 9y ago
  My comment was explaining that negotiation is a stand-in for knowledge and efficiency. The comment I was replying to implies that bosses should just know exactly how valuable a specific employee potentially is. It's impossible, which is why you have to stand up for yourself.
  - comicjk 9y ago
    > It's impossible This was actually my point. Wages have a large random component (negotiation might help the randomness but doesn't fix it). We need a decent lower limit, or else the lower tail of the random distribution leaves too many people as working poor.
    - daenz 9y ago
      Raising the artificial lower limit just shifts and compresses the lower tail and those just above it (see: wage compression), until the rest of the economy adjusts and pushes the rest of the wage distribution back to its original relative position. In the meantime, while that adjustment is happening, you've temporarily helped wages but hurt employment opportunities for people who need it most (the low wage people who can't sell themselves). Interesting point about wage compression is how demoralizing it is. I've talked to employees who have first hand been subject to it. The general sentiment is "Why do I suddenly make the same amount as people who are less skilled and less experienced than me? I worked hard to get ahead. How is this fair?" And this sentiment was from very left progressive individuals.
comicjk 9y ago
> The market didn't think so. "The market" is not a helpful model for this interaction. My boss paid me the lowest legal wage, and I didn't ask for any more. Imagine a driver pointing to a bridge on a map when in reality the bridge is gone. The map is helpful in many situations, but it will not help in getting over that bridge. > you have to push for it, since the market can't read your mind argue on your behalf. OK. What if I can't? In my case, it was anxiety, which affects at least 18% of the US population. In other cases, it's the risk of alienating a contact or going too long between jobs. If I can't argue, then by your own argument the market wage-setting mechanism must necessarily fail. At the lowest pay levels, I could become a burden to the public despite being employed, which doesn't do anyone any good. > People who can't/don't/won't negotiate expect the same income from people who do negotiate Obviously, a lack of salary negotiation decreases one's salary. Minimum wage laws don't repeal that fact, but they set a limit on how low salaries can go, reducing the number of charity cases among the working poor. It doesn't give bad negotiators the same income as effective negotiators except at the very bottom of the labor market.
- daenz 9y ago
  > My boss paid me the lowest legal wage, and I didn't ask for any more. > What if I can't? In my case, it was anxiety I'm sorry you have anxiety, but if you don't even try to participate in the negotiation process, you can't expect a lot of sympathy for you when you complain that you're not paid what you think you're worth. Negotiating inherently makes most people anxious (myself included), but you learn to do it because it's a invaluable skillset to furthering all aspects of your life. Frankly, I can't think of a single line of work that doesn't benefit from good negotiation skills. I hope you don't take this as confrontational.
  - comicjk 9y ago
    You're asking people with broken legs to walk it off. Clinical anxiety is not easy to treat, and minimum-wage workers don't generally have the time or resources to go about it. In non-psychological issues, the risk of going an extra few months without a job can be hard for minimum-wage workers. They might not be in a position to accept the tail risk even if the average outcome of negotiating the extra couple of dollars would leave them better off. I don't mean to ask sympathy for myself; I'm doing fine now, and I think you're right that I could use some negotiation training (I do read self-help books about it from time to time). I bring up myself just to make clear that this kind of issue can affect anyone. For people stuck in that situation (especially with kids), I feel a great deal of sympathy, and I'm interested in anything (minimum wage, training, Earned Income Tax Credit) which can help them.
FLUX-YOU 9y ago
>The market didn't think so. If you think you're worth more, you have to push for it, since the market can't read your mind argue on your behalf. The biggest issue is price discovery and knowledge of wages. There's not a stock ticker that everyone follows for "X-language Developers" getting hired at a particular price. Such a stock ticker would be dumb because too much goes into pricing people's work, but it highlights that there is more going on than you are able to discover, and some feel that's an unfair market because the businesses employing most people hold the cards in their favor. If it's a private company, you can't see their financials to see if they're telling the truth when they can only afford $X. It's only with time and effort that the cards start going to your hand, but to get there, the market might have already taken advantage of your underpaid work (that you agreed to, ignorantly or not). The market has the power to lie and collude to lower your price if you don't hold these cards. I, too, have the power to lie and collude to increase my price. And while most of us should just simply strive to be indispensable, discovering indispensable skills is also a lot of work. If I wanted to truly maximize my price, I would have to apply to every job available to me (time-consuming because we don't have a product for this) at every single company I could legally work at world-wide. Then I just pick the highest paying one that would hire me. That's a pretty easy concept, but no mechanism like that exists in the job market, and for that reason, it's a pretty terrible market to find your price. >Since they don't get it, they're upset, so they try to make laws to mandate everyone gets X That is a form of negotiation and that's what they did in Seattle. Just because I won't play my boss's game doesn't mean there isn't another game I could play. This shouldn't be surprising, but even political lobbying has risks of not winning. Now, if businesses want to come back and try to argue that this is hurting them, then that's part of negotiations as well, and it's entirely possible that businesses can convince Seattle's population.