8 ms·

> but there are also costs, like wage depression. Do you have a source for this? The conventional wisdom is that larger firms are more productive, and tend to

> but there are also costs, like wage depression. Do you have a source for this? The conventional wisdom is that larger firms are more productive, and tend to pay more as a result.

clairity 8y ago
there was an article posted right here on hn yesterday about wage depression. from my vantage point, conventional wisdom is quite the opposite of yours (e.g., walmart employees on food stamps). larger firms are more productive through a variety of mechanisms, not least of which is pricing power in the labor market. economies of scale and scope (like process standardization and automation) is a primary reason firms are more productive, and also has the added effect of putting downward pressure on labor costs.
- eldavido 8y ago
  I'm not sure why people blame Wal-Mart if their employees take food stamps. This is really the fault of poorly-written policy. It blows my mind why people blame Wal-Mart and not the folks who developed the legislation of those policies. That aside, I'm sorry but you're just wrong about this. The data is pretty unequivocal: larger firms have more scope for investments in process, technology, and tools that lets them operate more efficiently. In the example of Wal-Mart, they run an ultra-efficient supply chain that minimizes breakage, makes sure popular goods are available for purchase, etc. Whereas half the time when I go into a non-chain grocery, they're out of, or otherwise not stocking the thing I want, they're closed, the item isn't in the right place on the shelf, it's hidden in the "back room", a supplier is late, or there's some other problem. Sure, some of this is due to bargaining power, but Wal-Mart also operates at a scale where they can afford to invest billions in sophisticated merchandising systems. As software people, we should understand what a difference this stuff makes to business. Small firms pay worse because they simply don't make as much, given the same level of sales, as large firms do. The argument is a complete strawman. Lower, less-efficient firms don't have the gross profits (price - cost of goods sold) to be able to afford higher wages, even if they wanted to.
  - telchar 8y ago
    The problem is that Wal-Mart doesn't pay a living wage. Are you suggesting instead that the problem is that it's possible for people earning below a living wage to get public assistance?
  - will_brown 8y ago
    >It blows my mind why people blame Wal-Mart and not the folks who developed the legislation of those policies. Because Wal-Mart has the profits to be able to afford to pay full time workers a living wage, but instead of paying a living wage to all full time employees they scoop the profits, and shift that gap to taxpayers. I think most people agree, that if an employer has the profits to pay full time employees enough so they employees are not eligible for food stamps the employer has that obligation. Where the profits exist, businesses should be required to reimburse the government/tax payers for at least the cost of food stamps. Why should tax payers subsidize the food for employees, and their families, of public companies when the profits exist? The worst part is Wal-Mart publicly claims they can’t afford to pay their employees a living wage to the extent they won’t be eligible for food stamps...well it’s simple math walmart profits less the total amount of benefits the employees take...wow the money is there.
    - sokoloff 8y ago
      > I think most people agree, that if an employer has the profits to pay full time employees enough so they employees are not eligible for food stamps the employer has that obligation. I'm not so sure that most people agree. (For example, I do not.) It seems that if most people agreed, we might be closer to a world where it was policy or law (another form of conditional minimum wage, perhaps).
      - eldavido 8y ago
        Thank you, this is exactly my point. I don't buy the concept of "living wage" but that's not even what's at issue. I just think it's folly to blame Wal-Mart employees for availing themselves of a legally available social benefit program. I don't care where a person is politically. The private sector's job is profit maximization, not social welfare. There's this growing school of thought in the US that thinks it's the private sector's duty to "Take care of people". I'm not sure how we got it into our head that that should be the responsibility of private businesses. We have a government for that. It seems absolutely bonkers to start messing with the fundamental machinery of corporate law if the goal is social welfare. It's like seeing the thermostat is broken in the house, so we take a wrench to the engine of the car. It makes no sense to me whatsoever.

> but there are also costs, like wage depression. Do you have a source for this? The conventional wisdom is that larger firms are more productive, and tend to pay more as a result.

clairity 8y ago

there was an article posted right here on hn yesterday about wage depression. from my vantage point, conventional wisdom is quite the opposite of yours (e.g., walmart employees on food stamps). larger firms are more productive through a variety of mechanisms, not least of which is pricing power in the labor market. economies of scale and scope (like process standardization and automation) is a primary reason firms are more productive, and also has the added effect of putting downward pressure on labor costs.

eldavido 8y ago
I'm not sure why people blame Wal-Mart if their employees take food stamps. This is really the fault of poorly-written policy. It blows my mind why people blame Wal-Mart and not the folks who developed the legislation of those policies. That aside, I'm sorry but you're just wrong about this. The data is pretty unequivocal: larger firms have more scope for investments in process, technology, and tools that lets them operate more efficiently. In the example of Wal-Mart, they run an ultra-efficient supply chain that minimizes breakage, makes sure popular goods are available for purchase, etc. Whereas half the time when I go into a non-chain grocery, they're out of, or otherwise not stocking the thing I want, they're closed, the item isn't in the right place on the shelf, it's hidden in the "back room", a supplier is late, or there's some other problem. Sure, some of this is due to bargaining power, but Wal-Mart also operates at a scale where they can afford to invest billions in sophisticated merchandising systems. As software people, we should understand what a difference this stuff makes to business. Small firms pay worse because they simply don't make as much, given the same level of sales, as large firms do. The argument is a complete strawman. Lower, less-efficient firms don't have the gross profits (price - cost of goods sold) to be able to afford higher wages, even if they wanted to.
- telchar 8y ago
  The problem is that Wal-Mart doesn't pay a living wage. Are you suggesting instead that the problem is that it's possible for people earning below a living wage to get public assistance?
- will_brown 8y ago
  >It blows my mind why people blame Wal-Mart and not the folks who developed the legislation of those policies. Because Wal-Mart has the profits to be able to afford to pay full time workers a living wage, but instead of paying a living wage to all full time employees they scoop the profits, and shift that gap to taxpayers. I think most people agree, that if an employer has the profits to pay full time employees enough so they employees are not eligible for food stamps the employer has that obligation. Where the profits exist, businesses should be required to reimburse the government/tax payers for at least the cost of food stamps. Why should tax payers subsidize the food for employees, and their families, of public companies when the profits exist? The worst part is Wal-Mart publicly claims they can’t afford to pay their employees a living wage to the extent they won’t be eligible for food stamps...well it’s simple math walmart profits less the total amount of benefits the employees take...wow the money is there.
  - sokoloff 8y ago
    > I think most people agree, that if an employer has the profits to pay full time employees enough so they employees are not eligible for food stamps the employer has that obligation. I'm not so sure that most people agree. (For example, I do not.) It seems that if most people agreed, we might be closer to a world where it was policy or law (another form of conditional minimum wage, perhaps).
    - eldavido 8y ago
      Thank you, this is exactly my point. I don't buy the concept of "living wage" but that's not even what's at issue. I just think it's folly to blame Wal-Mart employees for availing themselves of a legally available social benefit program. I don't care where a person is politically. The private sector's job is profit maximization, not social welfare. There's this growing school of thought in the US that thinks it's the private sector's duty to "Take care of people". I'm not sure how we got it into our head that that should be the responsibility of private businesses. We have a government for that. It seems absolutely bonkers to start messing with the fundamental machinery of corporate law if the goal is social welfare. It's like seeing the thermostat is broken in the house, so we take a wrench to the engine of the car. It makes no sense to me whatsoever.