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Why do you assume that the current wages are the "natural" rate established by the "free market"? Don't we have evidence that employers are already abusing the

Why do you assume that the current wages are the "natural" rate established by the "free market"? Don't we have evidence that employers are already abusing their market power to extract rents? (https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L... for an example close to home) In fact, corporate profits are record-high, and wages have been stagnant for decades, suggesting very strongly that the "unnatural" market power that is keeping wages at "artificial" levels is in fact that of employers.

CryptoPunk 9y ago
>>Don't we have evidence that employers are already abusing their market power to extract rents? (https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.... for an example close to home) Very few firms can engage in such behavior. A pact like this can only be maintained by a small number of very large firms, and only the firms party to the pact will abide by it, leaving the entire rest of the employer market in a competitive state. Even had the antitrust action not stopped this behavior, it's questionable how much of an impact this behavior had in restraining wage growth in Silicon Valley's tech sector, and how long the pact would have lasted given its informal nature, and the temptation to cheat due to the intense completion between those party to it. If wages being below the natural, market rate, due to collusion between large firms is your concern, then the right solution is antitrust action. Unionisation in the current legal environment (where unions can affectively hold their firm hostage, and thus reduce labour market freedom) creates numerous unintended consequences that adversely affect industries. >>In fact, corporate profits are record-high, and wages have been stagnant for decades, suggesting very strongly that the "unnatural" market power Corporate earning growth is at historically low rates. Wages have stagnated because economic output growth has stagnated. See this comment: https://news.ycombinator.com/item?id=15244901 https://news.ycombinator.com/item?id=15244901
- jeremysalwen 9y ago
  > Very few firms can engage in such behavior. A pact like this can only be maintained by a small number of very large firms, and only the firms party to the pact will abide by it, leaving the entire rest of the employer market in a competitive state. And the same can't be said about the market power of unions? > Corporate earning growth is at historically low rates. Cherry picked statistic. Corporate earnings as a percent of GDP are record high. https://fred.stlouisfed.org/graph/?g=1Pik https://fred.stlouisfed.org/graph/?g=1Pik And your linked chart shows exactly my point, wages relative to productivity have been decreasing. Obviously with anything like this you have a hard time showing a direct causation, which is why I am confused that you are claiming that you can prove a clear causation in the exact opposite direction that the economy has been moving.

CryptoPunk 9y ago

>>Don't we have evidence that employers are already abusing their market power to extract rents? (https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.. https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L.... for an example close to home) Very few firms can engage in such behavior. A pact like this can only be maintained by a small number of very large firms, and only the firms party to the pact will abide by it, leaving the entire rest of the employer market in a competitive state. Even had the antitrust action not stopped this behavior, it's questionable how much of an impact this behavior had in restraining wage growth in Silicon Valley's tech sector, and how long the pact would have lasted given its informal nature, and the temptation to cheat due to the intense completion between those party to it. If wages being below the natural, market rate, due to collusion between large firms is your concern, then the right solution is antitrust action. Unionisation in the current legal environment (where unions can affectively hold their firm hostage, and thus reduce labour market freedom) creates numerous unintended consequences that adversely affect industries. >>In fact, corporate profits are record-high, and wages have been stagnant for decades, suggesting very strongly that the "unnatural" market power Corporate earning growth is at historically low rates. Wages have stagnated because economic output growth has stagnated. See this comment: https://news.ycombinator.com/item?id=15244901 https://news.ycombinator.com/item?id=15244901

jeremysalwen 9y ago
> Very few firms can engage in such behavior. A pact like this can only be maintained by a small number of very large firms, and only the firms party to the pact will abide by it, leaving the entire rest of the employer market in a competitive state. And the same can't be said about the market power of unions? > Corporate earning growth is at historically low rates. Cherry picked statistic. Corporate earnings as a percent of GDP are record high. https://fred.stlouisfed.org/graph/?g=1Pik https://fred.stlouisfed.org/graph/?g=1Pik And your linked chart shows exactly my point, wages relative to productivity have been decreasing. Obviously with anything like this you have a hard time showing a direct causation, which is why I am confused that you are claiming that you can prove a clear causation in the exact opposite direction that the economy has been moving.