5 ms·

This is no "law". It presumes that laborers cannot switch to a different employer, that there is a massive oversupply of laborers, and that laborers are complet

This is no "law". It presumes that laborers cannot switch to a different employer, that there is a massive oversupply of laborers, and that laborers are completely interchangeable. I'll accept that in conditions like that, wages will be significantly depressed. But this is not a truth in general. In fact, laborers have strong incentives to want more than a subsistence wage. So many laborers are going to take actions to counteract this, such as by learning skills and gaining education to differentiate themselves. Then they are in demand with a smaller supply. There are lots of people who are making more than minimum wage as required by the laws in their country. So this is obviously untrue.

cultus 6y ago
I also don't think it is a an iron law (horrible term), but I think you're overstating the claim here. It's only that there a tendency for wages to fall to subsistence. There is a positive feedback in wealth accumulation, so inequality does tend to grow without intervention. In the last few years, this has been happening due to increasing wealth inequality. The actions you cite (getting skills and education) have been seeing severely diminished returns, to the point that college makes little financial sense for a large portion of people.
mikst 6y ago
You are not wrong, but All Economics is like this. A "law" in Economics is supposed to work over infinite amount of time, over infinite amount of participants and so on. Technically they are not laws, but idealised long time trends. Obviously they do not work exactly in real world, but that doesn't mean one should dismiss them entirely.
Smaug123 6y ago
Happily, indeed, the iron law is not quite as iron as it might sound. But Moloch's hand still grips firmly where it is given a hold: if you're working two minimum wage jobs because you absolutely need the money, where are you going to find the slack in your life to allow you to learn new skills and gain education? I work just one full-time job at substantially more than minimum wage, and even I can feel Moloch's cold caress and his call to sacrifice the long-term on the altar of the short-term; if my life weren't so comfortable, I can easily see how I might not even have the choice to resist him, let alone the willpower.
- dfxm12 6y ago
  To add on to this, America is particularly cruel in this regard since so many benefits are tied to employment. It's incredibly risky to drop a job to free up time to gain education or even look for another job. Employers hold all the cards. They know it. They probably lobbied the government to gain this advantage. Workers are powerless against their bosses, but at least we can vote in more sympathetic government representatives.
ianleeclark 6y ago
> There are lots of people who are making more than minimum wage as required by the laws in their country. So this is obviously untrue. You're doing a huge sleight of hand here that's clouding your judgement, and it's that you're confining the sample size to a single country. We live in a global economy, thus the cost of reproduction of labor is determined globally. If you have companies A and B living in the same city in California doing roughly the same job, but moving their business to Thailand would increase their profit sufficiently, then one of the companies would relocate, make more profit/beat their competition. In doing this, they have decreased the cost of wages.
- tracker1 6y ago
  The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere. There are often other fixed costs associated as well as legal restrictions. Otherwise there would be nobody working in the US at all right now.
  - ianleeclark 6y ago
    > The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere. You're doing the sleight of hand, but on an even more localized level: a single company hiring a single person. We're talking about aggregates here
  - toyg 6y ago
    > The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere .. today. Tomorrow, it will be. We've already seen it happening several times since the first industrial revolution. 100 years ago, global supply chains on the scale we are currently witnessing were simply unthinkable. Any sector not currently enjoying pressure to move to the cheapest reliable location is only under a temporary hold. In the long run, capital treats workers like any other resource: something whose cost should be continuously minimized, for "efficiency" in relation to profit.
dfxm12 6y ago
There are lots of people who are making more than minimum wage as required by the laws in their country. This is a non sequitur since it really doesn't address the facets of the law itself. It is interesting you bring up minimum wage though, because the Federal minimum wage in the US is not even a living wage [0]. 0 - https://www.investopedia.com/articles/personal-finance/022615/can-family-survive-us-minimum-wage.asp https://www.investopedia.com/articles/personal-finance/02261...

cultus 6y ago

I also don't think it is a an iron law (horrible term), but I think you're overstating the claim here. It's only that there a tendency for wages to fall to subsistence. There is a positive feedback in wealth accumulation, so inequality does tend to grow without intervention. In the last few years, this has been happening due to increasing wealth inequality. The actions you cite (getting skills and education) have been seeing severely diminished returns, to the point that college makes little financial sense for a large portion of people.

mikst 6y ago

You are not wrong, but All Economics is like this. A "law" in Economics is supposed to work over infinite amount of time, over infinite amount of participants and so on. Technically they are not laws, but idealised long time trends. Obviously they do not work exactly in real world, but that doesn't mean one should dismiss them entirely.

Smaug123 6y ago

Happily, indeed, the iron law is not quite as iron as it might sound. But Moloch's hand still grips firmly where it is given a hold: if you're working two minimum wage jobs because you absolutely need the money, where are you going to find the slack in your life to allow you to learn new skills and gain education? I work just one full-time job at substantially more than minimum wage, and even I can feel Moloch's cold caress and his call to sacrifice the long-term on the altar of the short-term; if my life weren't so comfortable, I can easily see how I might not even have the choice to resist him, let alone the willpower.

dfxm12 6y ago
To add on to this, America is particularly cruel in this regard since so many benefits are tied to employment. It's incredibly risky to drop a job to free up time to gain education or even look for another job. Employers hold all the cards. They know it. They probably lobbied the government to gain this advantage. Workers are powerless against their bosses, but at least we can vote in more sympathetic government representatives.

ianleeclark 6y ago

> There are lots of people who are making more than minimum wage as required by the laws in their country. So this is obviously untrue. You're doing a huge sleight of hand here that's clouding your judgement, and it's that you're confining the sample size to a single country. We live in a global economy, thus the cost of reproduction of labor is determined globally. If you have companies A and B living in the same city in California doing roughly the same job, but moving their business to Thailand would increase their profit sufficiently, then one of the companies would relocate, make more profit/beat their competition. In doing this, they have decreased the cost of wages.

tracker1 6y ago
The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere. There are often other fixed costs associated as well as legal restrictions. Otherwise there would be nobody working in the US at all right now.
- ianleeclark 6y ago
  > The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere. You're doing the sleight of hand, but on an even more localized level: a single company hiring a single person. We're talking about aggregates here
- toyg 6y ago
  > The cost to replace a single person in a company doesn't always allow for that replacement to be anywhere .. today. Tomorrow, it will be. We've already seen it happening several times since the first industrial revolution. 100 years ago, global supply chains on the scale we are currently witnessing were simply unthinkable. Any sector not currently enjoying pressure to move to the cheapest reliable location is only under a temporary hold. In the long run, capital treats workers like any other resource: something whose cost should be continuously minimized, for "efficiency" in relation to profit.

dfxm12 6y ago

There are lots of people who are making more than minimum wage as required by the laws in their country. This is a non sequitur since it really doesn't address the facets of the law itself. It is interesting you bring up minimum wage though, because the Federal minimum wage in the US is not even a living wage [0]. 0 - https://www.investopedia.com/articles/personal-finance/022615/can-family-survive-us-minimum-wage.asp https://www.investopedia.com/articles/personal-finance/02261...