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Rackets are used everywhere to suppress wages. Employers usually subscribe to services that tell them what other employers are paying in their area for a given

Rackets are used everywhere to suppress wages. Employers usually subscribe to services that tell them what other employers are paying in their area for a given job, which they use during salary negotiations to give themselves a stronger bargaining position. Any difference in information between two parties is exploitable to drive the price in the direction favored by the more-well-informed party.

eru 7y ago
> Employers usually subscribe to services that tell them what other employers are paying in their area for a given job, which they use during salary negotiations to give themselves a stronger bargaining position. That's not exactly a 'racket'. Glassdoor lists that kind of information for everyone, including job seekers. And workers' rights to share that kind of information is even enshrined in lots of countries laws as inalienable (ie they can't sign away such that right; any provisions to such effect are at best unenforceable and at worst make the employer liable to be sued). > Any difference in information between two parties is exploitable to drive the price in the direction favored by the more-well-informed party. Not in a liquid market with competition. Eg I have no clue what Google stock should be trading at, but if I send a market order to buy a few stocks, I'll get a pretty good price because there are several market makers competing. There are sometimes attempts by employers at cartels. These days mostly informal or even only implicit, eg via the kind of third party information sharing you allude to you in comment. But as with any cartel, each member has an incentive to free ride and non-members even more so. And while your local Burger King and McDonalds franchisees might be able to collude, they'll have a hard time keeping people from switching to driving to Uber or Lyft if fast food wages drop too low. There's also the safety valve of self-employment. The best thing government can do for the workers is to lower barriers to entry for would-be entrepreneurs: make employers compete with each other, and also pre-emptively compete with potential new market entrants (imagined or real). (Closing markets by eg taxi medallions is exactly the opposite of what's good for workers.)

eru 7y ago

> Employers usually subscribe to services that tell them what other employers are paying in their area for a given job, which they use during salary negotiations to give themselves a stronger bargaining position. That's not exactly a 'racket'. Glassdoor lists that kind of information for everyone, including job seekers. And workers' rights to share that kind of information is even enshrined in lots of countries laws as inalienable (ie they can't sign away such that right; any provisions to such effect are at best unenforceable and at worst make the employer liable to be sued). > Any difference in information between two parties is exploitable to drive the price in the direction favored by the more-well-informed party. Not in a liquid market with competition. Eg I have no clue what Google stock should be trading at, but if I send a market order to buy a few stocks, I'll get a pretty good price because there are several market makers competing. There are sometimes attempts by employers at cartels. These days mostly informal or even only implicit, eg via the kind of third party information sharing you allude to you in comment. But as with any cartel, each member has an incentive to free ride and non-members even more so. And while your local Burger King and McDonalds franchisees might be able to collude, they'll have a hard time keeping people from switching to driving to Uber or Lyft if fast food wages drop too low. There's also the safety valve of self-employment. The best thing government can do for the workers is to lower barriers to entry for would-be entrepreneurs: make employers compete with each other, and also pre-emptively compete with potential new market entrants (imagined or real). (Closing markets by eg taxi medallions is exactly the opposite of what's good for workers.)