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> “One thing Chinese founders or unicorns haven’t figured out is how to become a sustainable business. If you continue those [long hours] for 10 years, people w

> “One thing Chinese founders or unicorns haven’t figured out is how to become a sustainable business. If you continue those [long hours] for 10 years, people will have no personal life any more, they will have no kids, they will go crazy,” Wingender said. I wonder if this is simply symptomatic of a labor market imbalance. China has a lot of people, and proportionally they have a lot of people who can do software. Employers can demand what they want. This model is only sustainable so long as the stream of labor is constant, which I suspect it is.

roymurdock 8y ago
there are 2 inputs to the classical production function (e.g. the 2 things businesses need to purchase/obtain in order to stay in business) - labor and capital if labor is continuing to improve its value (through education, training business skills, learning new technology, etc.) then it continues to have bargaining power in wage/contract negotiations if a company can produce the same or more output with more capital (generally cheaper/scales better) and less and/or cheaper (younger/less experienced) labor, then it generally will this is why we're seeing so many "ageist" layoffs at the large tech and industrial companies in the west old employees are very expensive (especially with pension programs) and they're often not necessary to keep the output constant, or can be replaced/outsourced, for the sake of pumping up equity/shareholder value because cost cutting is currently a lot easier in tech than the R&D/acquisitions needed for increased revenue gen there are a few things that could happen to increase the bargaining power of labor and increase wages/time off work (benefits): 1. the supply of labor drops (a war/natural disaster) 2. the supply of capital drops (luddites/natural disaster) 3. the quality of education increases 4. labor unionizes 5. TFP (total factor productivity) increases i don't know chinese labor market specifics but my general impression is that it's much more cut throat because there are just so many more people, the tech companies are playing catch-up in some sense to their western counterparts, the jobs are more blue-collar oriented (rather than white-collar services jobs which have more wiggle room), and because of cultural/government/societal factors that prioritize hard work and family/society dynamics over individual liberty and health
- chillacy 8y ago
  Isn’t “the labor unionizes” just a special case of “the supply drops” since labor unions enforce their power by controlling the supply of labor? (Eg strikes)
  - roymurdock 8y ago
    yea there are other ways to increase labor bargaining power too i just listed the most common off the top of my head

roymurdock 8y ago

there are 2 inputs to the classical production function (e.g. the 2 things businesses need to purchase/obtain in order to stay in business) - labor and capital if labor is continuing to improve its value (through education, training business skills, learning new technology, etc.) then it continues to have bargaining power in wage/contract negotiations if a company can produce the same or more output with more capital (generally cheaper/scales better) and less and/or cheaper (younger/less experienced) labor, then it generally will this is why we're seeing so many "ageist" layoffs at the large tech and industrial companies in the west old employees are very expensive (especially with pension programs) and they're often not necessary to keep the output constant, or can be replaced/outsourced, for the sake of pumping up equity/shareholder value because cost cutting is currently a lot easier in tech than the R&D/acquisitions needed for increased revenue gen there are a few things that could happen to increase the bargaining power of labor and increase wages/time off work (benefits): 1. the supply of labor drops (a war/natural disaster) 2. the supply of capital drops (luddites/natural disaster) 3. the quality of education increases 4. labor unionizes 5. TFP (total factor productivity) increases i don't know chinese labor market specifics but my general impression is that it's much more cut throat because there are just so many more people, the tech companies are playing catch-up in some sense to their western counterparts, the jobs are more blue-collar oriented (rather than white-collar services jobs which have more wiggle room), and because of cultural/government/societal factors that prioritize hard work and family/society dynamics over individual liberty and health

chillacy 8y ago
Isn’t “the labor unionizes” just a special case of “the supply drops” since labor unions enforce their power by controlling the supply of labor? (Eg strikes)
- roymurdock 8y ago
  yea there are other ways to increase labor bargaining power too i just listed the most common off the top of my head