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> The predominant determinant of labor compensation is substitutability. Which proves the article right: the guy labored hard to move the proceeds of his partn

> The predominant determinant of labor compensation is substitutability. Which proves the article right: the guy labored hard to move the proceeds of his partners work into a forest of trusts that only he knows and that only benefits him personally, by statute. He can't be substituted anymore!

rebelos 6y ago
Labor compensation is a subset of compensation in the abstract (or, even more broadly, "return on time and capital"). Importantly, in most economies, it's typically set by employers hiring within an efficient labor market.
- brmgb 6y ago
  I might have believed you before the covid epidemic but I think it definitely proved that wrong. We have a dearth of essential people. Nurses are a perfect example. Yet they keep being paid like crap. It is becoming clearer by the day that the job market is not an efficient market at all. Why keep pretending ?
  - rebelos 6y ago
    First of all, everything is running remarkably smoothly given the circumstances. The Covid-19 statistics are largely a consequence of people acting individually out of self interest and ignorance, yielding negative systemic externalities, and not a dysfunction of the healthcare system. Furthermore, if you think about how insurance risk pooling works, it's quite easy to see how an insurance-backed, profit-motivated healthcare system may not be the best vehicle to address a systemic health problem afflicting the entire population. You may recall AIG as a rough analogue for this situation. Or even entities insuring against natural disasters in California. The government has to step in to prevent failure. And then we have the most obvious counterargument to your flawed thesis: why would labor compensation go up during a recession with high unemployment and considerable attendant macroeconomic instability? Those factors have contributed to dramatically increased substitutability and thus quite naturally suppress wage growth.
  - ponker 6y ago
    Nursing is hard work but it is not paid like crap.
    - brokenmachine 6y ago
      I don't think nurses are paid fairly for the work they do. I think the health industry takes advantage of their desire to help.
      - nkurz 6y ago
        Per my link in the comment above, do you feel the average RN salary of $113,000/year in California is unfairly low, or were you unaware their salary was this high, or do you doubt that the number is accurate?
        ponker 6y ago
        I mean I can understand both points of view. I can understand thinking, as I said, that "nurses are not paid like crap," but I can also understand that watching a nurse work for a day one could think "there's no salary that would be fair for that," and also "Why does a software engineer sit down all day for $250K while nurses push their body and minds to the limit for $113k," which is of course extensible to people beyond software engineers.
        brokenmachine 6y ago
        You have picked the headline number of the highest in the country. Are the living costs higher in that state (I'm Australian)? Yes, that is higher than I would have expected, but I do think it's unfairly low because personally I wouldn't do a nurses job for three times that, plus you need a degree to be an RN. You're asking the wrong person for their opinion though - my job has very little stress and I earn more that that. I do have to endure quite a few minor annoyances however, but nothing like I imagine a nurse does. For the record, I think a lot of jobs are artificially underpaid. The best trick corporations ever did was to promote the illusion of such a thing as unskilled labor.
  - FireBeyond 6y ago
    Yeah, you might want to talk to EMTs and paramedics before you talk about nurses being paid like crap. EMTs average $11/hr. Paramedics $17/hr. Paramedics, in particular, who are trained to autonomously administer near 60 drugs, to intubate people, in some cases start central lines (which even most nurses cannot do).

rebelos 6y ago

Labor compensation is a subset of compensation in the abstract (or, even more broadly, "return on time and capital"). Importantly, in most economies, it's typically set by employers hiring within an efficient labor market.

brmgb 6y ago
I might have believed you before the covid epidemic but I think it definitely proved that wrong. We have a dearth of essential people. Nurses are a perfect example. Yet they keep being paid like crap. It is becoming clearer by the day that the job market is not an efficient market at all. Why keep pretending ?
- rebelos 6y ago
  First of all, everything is running remarkably smoothly given the circumstances. The Covid-19 statistics are largely a consequence of people acting individually out of self interest and ignorance, yielding negative systemic externalities, and not a dysfunction of the healthcare system. Furthermore, if you think about how insurance risk pooling works, it's quite easy to see how an insurance-backed, profit-motivated healthcare system may not be the best vehicle to address a systemic health problem afflicting the entire population. You may recall AIG as a rough analogue for this situation. Or even entities insuring against natural disasters in California. The government has to step in to prevent failure. And then we have the most obvious counterargument to your flawed thesis: why would labor compensation go up during a recession with high unemployment and considerable attendant macroeconomic instability? Those factors have contributed to dramatically increased substitutability and thus quite naturally suppress wage growth.
- ponker 6y ago
  Nursing is hard work but it is not paid like crap.
  - brokenmachine 6y ago
    I don't think nurses are paid fairly for the work they do. I think the health industry takes advantage of their desire to help.
    - nkurz 6y ago
      Per my link in the comment above, do you feel the average RN salary of $113,000/year in California is unfairly low, or were you unaware their salary was this high, or do you doubt that the number is accurate?
      - ponker 6y ago
        I mean I can understand both points of view. I can understand thinking, as I said, that "nurses are not paid like crap," but I can also understand that watching a nurse work for a day one could think "there's no salary that would be fair for that," and also "Why does a software engineer sit down all day for $250K while nurses push their body and minds to the limit for $113k," which is of course extensible to people beyond software engineers.
      - brokenmachine 6y ago
        You have picked the headline number of the highest in the country. Are the living costs higher in that state (I'm Australian)? Yes, that is higher than I would have expected, but I do think it's unfairly low because personally I wouldn't do a nurses job for three times that, plus you need a degree to be an RN. You're asking the wrong person for their opinion though - my job has very little stress and I earn more that that. I do have to endure quite a few minor annoyances however, but nothing like I imagine a nurse does. For the record, I think a lot of jobs are artificially underpaid. The best trick corporations ever did was to promote the illusion of such a thing as unskilled labor.
- FireBeyond 6y ago
  Yeah, you might want to talk to EMTs and paramedics before you talk about nurses being paid like crap. EMTs average $11/hr. Paramedics $17/hr. Paramedics, in particular, who are trained to autonomously administer near 60 drugs, to intubate people, in some cases start central lines (which even most nurses cannot do).