9 ms·

How Big Firms Keep Wages Low

146 points by howard941 8y ago

imh 8y ago
Are there anti-monopsony laws like there are anti-monopoly laws?
- crowdpleaser 8y ago
  Historically the anti-monopoly laws in America could be deployed to against monopsony or the accumulation of power to act as a monopsony. However, American Businesses successfully lobbied to change the ways the anti-monopoly laws are used - now the anti-monopoly laws are focused primarily on avoiding consumer price increases and are blind to things like accumulating power to be an abusive monopoly (a la Amazon) or monopsony.
rm_-rf_slash 8y ago
There wasn’t much mentioned in the way of mitigation, which is somewhat disappointing. If we are to accept that globalization and technology favor massive champions (FAANG/Alibaba/Wall St) then by lacking any circumvention of monopsony power we are collectively signing away our current and future pay and bargaining power to executives and shareholders.
- moate 8y ago
  Last time we encountered this sort of problem, the answer was unionization/collective bargaining. Monopsony exists almost exclusively because of regional/area dependency. By its nature, this problem can't be dealt with by offshoring jobs on the company's part, and requires a local labor force. Unions allow the labor class to raise the floor on the lowest things they're willing to accept. One of the largest problems towards this is the 40 year smear campaign that neoliberals have been on against unions. Somehow they got the working class to believe that each special individual is better on his own when bargaining against a massive corporation.
  - graedus 8y ago
    > One of the largest problems towards this is the 40 year smear campaign that neoliberals have been on against unions. Somehow they got the working class to believe that each special individual is better on his own when bargaining against a massive corporation. There's a great book about this effort called Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945-60. edit: Here's a snippet from the summary: "In Selling Free Enterprise, Elizabeth Fones-Wolf describes how conservative business leaders strove to reorient workers away from their loyalties to organized labor and government, teaching that prosperity could be achieved through reliance on individual initiative, increased productivity, and the protection of personal liberty."
    - dredmorbius 8y ago
      https://www.worldcat.org/title/selling-free-enterprise-the-business-assault-on-labor-and-liberalism-1945-60/oclc/760405567 https://www.worldcat.org/title/selling-free-enterprise-the-b...
  - skookumchuck 8y ago
    Ironically, unions always seek legal monopoly status. https://www.nrtw.org/right-to-work-states https://www.nrtw.org/right-to-work-states
    - MrTonyD 8y ago
      Sorry you got downvoted. A lot of people never studied the history of Unions (and I'm very pro Union, with several Union organizing relatives) to see how incredibly corrupt they become. They have a long history of selling out to the agenda of the rich - and many famous strikes were initiated by the rank and file against the wishes of the Union - forcing the Union to pretend to be supporting the strikers while doing everything possible to undermine them. Just one example - Caesar Chavez's United Farm Workers was destroyed by the Teamsters, since the Teamsters were aligned with farmers (who are mostly big multinationals - hope you don't believe that "small farmer" myth.) So the Teamsters agreed to undermine the UFW actions (by taking away members and offering a short-term sweeter deal, criticizing UFW, then later giving them much worse deals after the Farmers gave them benefits to keep the truckers happy. Keeping Teamster management fat and happy.)
mdorazio 8y ago
Not mentioned in the article is another aspect of this: 1 in 10 American workers is now an independent contractor or works for a contract labor firm [1]. When monopsony starts to creep into buyers of contract labor, bargaining power drops and wages stagnate or fall as well [2]. [1] https://www.npr.org/2018/06/07/617863204/one-in-10-workers-are-independent-contractors-labor-department-says https://www.npr.org/2018/06/07/617863204/one-in-10-workers-a... [2] https://thehill.com/opinion/finance/409876-the-hidden-culprit-behind-stagnant-wages https://thehill.com/opinion/finance/409876-the-hidden-culpri...
- deleted 8y ago
  [deleted]
- hoaw 8y ago
  It interesting/despairing to see that the modern world just seem to end up formalizing age old things like collusion and corruption. So many of these situation are essentially lose-lose-lose. I really wonder if any country will manage to keep on track, or we all wake up when we realize there is competition. It isn't exactly unknown how to be successful as a country, or at least it is pretty well known how to fail. It is weird that everything have become easier, yet more complex. I guess that is why all the super vertically integrated companies are outperforming the rest of society.
bediger4000 8y ago
Wow, that's quite a take from Forbes, long considered a capitalist tool. Is Forbes feeling OK?
- TomMckenny 8y ago
  Perhaps they too understand a free market requires ruthlessly eliminating monopolies and cartels. Perhaps they genuinely believe a functioning free market helps everyone. Perhaps the article is coming from this direction. Or perhaps it's been noticed that it is better to reign in some excesses of rising inequality rather than potentially face the annihilation of wealth and chaos of the 1930s and 40s.
  - skookumchuck 8y ago
    Do you assert that the Great Depression was caused by rising inequality?
    - alejohausner 8y ago
      I think the opposite is true: the Depression led to the New Deal, and to WW2, both of which destroyed great wealth and made lowly workers better off.
      - skookumchuck 8y ago
        The state of lowly workers improved more or less continuously from 1800 on, despite the great wealth during the "guilded age". No country has ever succeeded in improving the lot of the poor by destroying the wealthy.
    - TomMckenny 8y ago
      I only note that inequality peaked in 1929. And while the market obviously collapsed from over exuberance etc, the lack of middle class spending power prevented recovery. I also note inequality peaked again in 2007. But anyway people use ideology to choose their explanation for the great depression from the vast tangle of possibilities so it's a futile topic. And whether true or not, it isn't my main point anyway. Inequality causes dangerous levels of political instability which should be of concern to Forbes' and everyone else.
pmoriarty 8y ago
Parenthetically, it looks like Forbes has quietly abandoned its anti-adblock efforts.[1] It used to be that I couldn't read a Forbes article without javascript and without either disabling adblocking or trying to circumvent its anti-adblocking attempts, and now reading a Forbes article without javascript is not a problem. [1] - https://news.ycombinator.com/item?id=11693485 https://news.ycombinator.com/item?id=11693485
- cyclonetiger 8y ago
  Reading Forbes now and getting a seizure are the same thing. Mini video with autoplay that either doesn't have a close button or I can't figure out how to close it combined with ads.
Bucephalus355 8y ago
Here’s my salary to help ppl negotiate: I worked for KPMG previously (within 12 months) and made 140k as an AWS Architect (designing the environment and then building it out in the GUI). This was in Dallas, Texas so good amount of money. If you’re going into any consulting company as a cloud person or devops person with more than 2 years experience, anything less than 120k isn’t acceptable if you’re a US citizen.
- Bucephalus355 8y ago
  Also remote devops remotes in SF and NY that require 1 week of travel a month at most are in the 180-200k from what I’ve seen. These are the top salaries I’ve seen if you’re committed to living somewhere inexpensive like I am. This assumes 3 years+ of experience. DevOps is harder experience to get sometimes so just study cloud architecture and engineering which is similar. That whole field lends itself to self-study.
  - xfitm3 8y ago
    Are those top salary ranges from large firms like KPMG?
  - CyberDildonics 8y ago
    What is the difference between 'DevOps' and a system administrator?
    - Bucephalus355 8y ago
      I wonder that sometimes too. I came from the sysadmin world. I was always interested in that kind of stuff (like setting up my network at home) and cloud technology made it easy to learn while I had my first job in tech support. Really I’m a “major cloud provider sysadmin” who learned a few DevOps things over a couple of months (Docker, Kubernetes, a good amount of PHP) to take jobs that offered big salaries... Cloud Architect / Engineer roles usually will pay at least 20k less than whatever has DevOps in the title.
    - jfoutz 8y ago
woolvalley 8y ago
Nobody talks about how it's an explicit fed policy to prevent wage growth, because of worries of "inflation". While other kinds of inflation are ok, such as the asset price inflation we are seeing today. The asset price inflation comes from the 2007 era quantative easing money given to banks instead. That is a major reason why wages are kept low. The policy started around the 1970s, and surprise surprise, real wage growth has been flat since then. The fed & US government is the biggest firm out there.
- Cacti 8y ago
  Conversely, it is an explicit Fed policy to always have some non-trivial amount of inflation. In fact, generally speaking, inflation is purposefully created, and has to exist, in order for the Fed to control the money supply, because the tools available to them become largely ineffective once real rates drop below 0% for any significant stretch of time ("pushing on a string"). The only significant obstacle to this was the domestic, then international pegging of the dollar to gold reserves, the last vestiges of it being removed in the early 1970s (this of course being the high point of real wage growth in the US). This is not per se a terrible thing (assuming some mythical scenario where wage growth and inflation are nearly balanced), but it certainly shifts the balance of power from inflation to the _rate_ of inflation, and therefore is easy to nickle and dime until your average worker is almost assuredly experiencing wage growth lower than inflation. Small changes here, small changes there, ones nearly impossible for your average person to have any control over or have any lever over, and largely imperceptable to most people, end up being de-facto theft through the back door.
  - _red 8y ago
    The other interesting connection to wage growth and 1970's was 'women in the workforce'. The concept, apart from the genuine support that existed for it, was certainly pushed by the feds, not out of political support but because they knew what the implications were. They could drive down purchasing power and families could make up for it by having both parents work.
    - 8y ago
rhodo 8y ago
>The suspicious use of noncompetes as a pure power play came to light when the fast food joint Jimmy Johns was discovered to have forced their sandwich makers to promise not to go to another fast food restaurant. It is not credible that they were taking JJ secrets to McDonalds. But the action froze JJ workers in searching for a better job. Surprisingly, the courts said it was legal, but JJ settled and stopped using them. This is so fucked
- Cacti 8y ago
  Outside of rare cases, the entire concept needs to be made illegal, along with forced arbitration.
deleted 8y ago
[deleted]
echofavor 8y ago
Thanks for sharing. You can also share your ideas for free on www.echofavor.com
esel2k 8y ago
What can you actually do against this? I have exactly this problem as I live in a city with two major international companies and they get so many applications that their salaries are quiet low and bad benefits (no remote work, less holidays...).?

146 points by howard941 8y ago

imh 8y ago

Are there anti-monopsony laws like there are anti-monopoly laws?

crowdpleaser 8y ago
Historically the anti-monopoly laws in America could be deployed to against monopsony or the accumulation of power to act as a monopsony. However, American Businesses successfully lobbied to change the ways the anti-monopoly laws are used - now the anti-monopoly laws are focused primarily on avoiding consumer price increases and are blind to things like accumulating power to be an abusive monopoly (a la Amazon) or monopsony.

rm_-rf_slash 8y ago

There wasn’t much mentioned in the way of mitigation, which is somewhat disappointing. If we are to accept that globalization and technology favor massive champions (FAANG/Alibaba/Wall St) then by lacking any circumvention of monopsony power we are collectively signing away our current and future pay and bargaining power to executives and shareholders.

moate 8y ago
Last time we encountered this sort of problem, the answer was unionization/collective bargaining. Monopsony exists almost exclusively because of regional/area dependency. By its nature, this problem can't be dealt with by offshoring jobs on the company's part, and requires a local labor force. Unions allow the labor class to raise the floor on the lowest things they're willing to accept. One of the largest problems towards this is the 40 year smear campaign that neoliberals have been on against unions. Somehow they got the working class to believe that each special individual is better on his own when bargaining against a massive corporation.
- graedus 8y ago
  > One of the largest problems towards this is the 40 year smear campaign that neoliberals have been on against unions. Somehow they got the working class to believe that each special individual is better on his own when bargaining against a massive corporation. There's a great book about this effort called Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945-60. edit: Here's a snippet from the summary: "In Selling Free Enterprise, Elizabeth Fones-Wolf describes how conservative business leaders strove to reorient workers away from their loyalties to organized labor and government, teaching that prosperity could be achieved through reliance on individual initiative, increased productivity, and the protection of personal liberty."
  - dredmorbius 8y ago
    https://www.worldcat.org/title/selling-free-enterprise-the-business-assault-on-labor-and-liberalism-1945-60/oclc/760405567 https://www.worldcat.org/title/selling-free-enterprise-the-b...
- skookumchuck 8y ago
  Ironically, unions always seek legal monopoly status. https://www.nrtw.org/right-to-work-states https://www.nrtw.org/right-to-work-states
  - MrTonyD 8y ago
    Sorry you got downvoted. A lot of people never studied the history of Unions (and I'm very pro Union, with several Union organizing relatives) to see how incredibly corrupt they become. They have a long history of selling out to the agenda of the rich - and many famous strikes were initiated by the rank and file against the wishes of the Union - forcing the Union to pretend to be supporting the strikers while doing everything possible to undermine them. Just one example - Caesar Chavez's United Farm Workers was destroyed by the Teamsters, since the Teamsters were aligned with farmers (who are mostly big multinationals - hope you don't believe that "small farmer" myth.) So the Teamsters agreed to undermine the UFW actions (by taking away members and offering a short-term sweeter deal, criticizing UFW, then later giving them much worse deals after the Farmers gave them benefits to keep the truckers happy. Keeping Teamster management fat and happy.)

mdorazio 8y ago

Not mentioned in the article is another aspect of this: 1 in 10 American workers is now an independent contractor or works for a contract labor firm [1]. When monopsony starts to creep into buyers of contract labor, bargaining power drops and wages stagnate or fall as well [2]. [1] https://www.npr.org/2018/06/07/617863204/one-in-10-workers-are-independent-contractors-labor-department-says https://www.npr.org/2018/06/07/617863204/one-in-10-workers-a... [2] https://thehill.com/opinion/finance/409876-the-hidden-culprit-behind-stagnant-wages https://thehill.com/opinion/finance/409876-the-hidden-culpri...

deleted 8y ago
[deleted]
hoaw 8y ago
It interesting/despairing to see that the modern world just seem to end up formalizing age old things like collusion and corruption. So many of these situation are essentially lose-lose-lose. I really wonder if any country will manage to keep on track, or we all wake up when we realize there is competition. It isn't exactly unknown how to be successful as a country, or at least it is pretty well known how to fail. It is weird that everything have become easier, yet more complex. I guess that is why all the super vertically integrated companies are outperforming the rest of society.

bediger4000 8y ago

Wow, that's quite a take from Forbes, long considered a capitalist tool. Is Forbes feeling OK?

TomMckenny 8y ago
Perhaps they too understand a free market requires ruthlessly eliminating monopolies and cartels. Perhaps they genuinely believe a functioning free market helps everyone. Perhaps the article is coming from this direction. Or perhaps it's been noticed that it is better to reign in some excesses of rising inequality rather than potentially face the annihilation of wealth and chaos of the 1930s and 40s.
- skookumchuck 8y ago
  Do you assert that the Great Depression was caused by rising inequality?
  - alejohausner 8y ago
    I think the opposite is true: the Depression led to the New Deal, and to WW2, both of which destroyed great wealth and made lowly workers better off.
    - skookumchuck 8y ago
      The state of lowly workers improved more or less continuously from 1800 on, despite the great wealth during the "guilded age". No country has ever succeeded in improving the lot of the poor by destroying the wealthy.
  - TomMckenny 8y ago
    I only note that inequality peaked in 1929. And while the market obviously collapsed from over exuberance etc, the lack of middle class spending power prevented recovery. I also note inequality peaked again in 2007. But anyway people use ideology to choose their explanation for the great depression from the vast tangle of possibilities so it's a futile topic. And whether true or not, it isn't my main point anyway. Inequality causes dangerous levels of political instability which should be of concern to Forbes' and everyone else.

pmoriarty 8y ago

Parenthetically, it looks like Forbes has quietly abandoned its anti-adblock efforts.[1] It used to be that I couldn't read a Forbes article without javascript and without either disabling adblocking or trying to circumvent its anti-adblocking attempts, and now reading a Forbes article without javascript is not a problem. [1] - https://news.ycombinator.com/item?id=11693485 https://news.ycombinator.com/item?id=11693485

cyclonetiger 8y ago
Reading Forbes now and getting a seizure are the same thing. Mini video with autoplay that either doesn't have a close button or I can't figure out how to close it combined with ads.

Bucephalus355 8y ago

Here’s my salary to help ppl negotiate: I worked for KPMG previously (within 12 months) and made 140k as an AWS Architect (designing the environment and then building it out in the GUI). This was in Dallas, Texas so good amount of money. If you’re going into any consulting company as a cloud person or devops person with more than 2 years experience, anything less than 120k isn’t acceptable if you’re a US citizen.

Bucephalus355 8y ago
Also remote devops remotes in SF and NY that require 1 week of travel a month at most are in the 180-200k from what I’ve seen. These are the top salaries I’ve seen if you’re committed to living somewhere inexpensive like I am. This assumes 3 years+ of experience. DevOps is harder experience to get sometimes so just study cloud architecture and engineering which is similar. That whole field lends itself to self-study.
- xfitm3 8y ago
  Are those top salary ranges from large firms like KPMG?
- CyberDildonics 8y ago
  What is the difference between 'DevOps' and a system administrator?
  - Bucephalus355 8y ago
    I wonder that sometimes too. I came from the sysadmin world. I was always interested in that kind of stuff (like setting up my network at home) and cloud technology made it easy to learn while I had my first job in tech support. Really I’m a “major cloud provider sysadmin” who learned a few DevOps things over a couple of months (Docker, Kubernetes, a good amount of PHP) to take jobs that offered big salaries... Cloud Architect / Engineer roles usually will pay at least 20k less than whatever has DevOps in the title.
  - jfoutz 8y ago

woolvalley 8y ago

Nobody talks about how it's an explicit fed policy to prevent wage growth, because of worries of "inflation". While other kinds of inflation are ok, such as the asset price inflation we are seeing today. The asset price inflation comes from the 2007 era quantative easing money given to banks instead. That is a major reason why wages are kept low. The policy started around the 1970s, and surprise surprise, real wage growth has been flat since then. The fed & US government is the biggest firm out there.

Cacti 8y ago
Conversely, it is an explicit Fed policy to always have some non-trivial amount of inflation. In fact, generally speaking, inflation is purposefully created, and has to exist, in order for the Fed to control the money supply, because the tools available to them become largely ineffective once real rates drop below 0% for any significant stretch of time ("pushing on a string"). The only significant obstacle to this was the domestic, then international pegging of the dollar to gold reserves, the last vestiges of it being removed in the early 1970s (this of course being the high point of real wage growth in the US). This is not per se a terrible thing (assuming some mythical scenario where wage growth and inflation are nearly balanced), but it certainly shifts the balance of power from inflation to the _rate_ of inflation, and therefore is easy to nickle and dime until your average worker is almost assuredly experiencing wage growth lower than inflation. Small changes here, small changes there, ones nearly impossible for your average person to have any control over or have any lever over, and largely imperceptable to most people, end up being de-facto theft through the back door.
- _red 8y ago
  The other interesting connection to wage growth and 1970's was 'women in the workforce'. The concept, apart from the genuine support that existed for it, was certainly pushed by the feds, not out of political support but because they knew what the implications were. They could drive down purchasing power and families could make up for it by having both parents work.
  - 8y ago

rhodo 8y ago

>The suspicious use of noncompetes as a pure power play came to light when the fast food joint Jimmy Johns was discovered to have forced their sandwich makers to promise not to go to another fast food restaurant. It is not credible that they were taking JJ secrets to McDonalds. But the action froze JJ workers in searching for a better job. Surprisingly, the courts said it was legal, but JJ settled and stopped using them. This is so fucked

Cacti 8y ago
Outside of rare cases, the entire concept needs to be made illegal, along with forced arbitration.

deleted 8y ago

[deleted]

echofavor 8y ago

Thanks for sharing. You can also share your ideas for free on www.echofavor.com

esel2k 8y ago

What can you actually do against this? I have exactly this problem as I live in a city with two major international companies and they get so many applications that their salaries are quiet low and bad benefits (no remote work, less holidays...).?