4 ms·

Not sure what to make of this. Billionaire companies != seed funded startups. The exploitation really kicks into gear after you have 5000 employees and there ar

Not sure what to make of this. Billionaire companies != seed funded startups. The exploitation really kicks into gear after you have 5000 employees and there are many inflection points of power differentials until then. Each not as a big deal, but slowly eroding some rights the farther and lower you go.

dcolkitt 6y ago
The evidence is indisputable that workers at large firms have substantially higher productivity than small firms.[1] Big business also pays its workers substantially higher wages. If your model of big business is that it's a tool for exploiting workers, you'd expect the opposite of this dynamic. Instead the economics is pretty clear that most large firms create synergies that empower individual workers to produce much more than they'd be capable of individually or in small, informal organizations. As a bonus, the sizable bulk of this productivity surplus accumulates in the form of higher wages to the workers themselves. Big business accomplishes this by consistently applying the best practices in organizational management[2]. In contrast small business tends to be much more sloppily managed with a lot more decisions made haphazardly, with many more decisions being made for individual gain rather than the good of the organization as a whole. If anything the balance of the evidence would make a much stronger case that small business is really more exploitative than big business. [1] https://www.jstor.org/stable/117089?seq=1 https://www.jstor.org/stable/117089?seq=1 [2] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.1.203 https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.1.203
- Lendal 6y ago
  The question though is why shouldn't those workers receive a larger share of their own productivity gains? As we work harder, we should receive more. But since the mid-1970's workers have received only a fraction of their own productivity gains. Most of that value is being sucked upward. It wasn't always this way.
  - dcolkitt 6y ago
    Average worker compensation has nearly doubled in the past 20 years.[1] Almost exactly in line with aggregate productivity levels.[2] What I'm guessing you're referring to is median household income. Which is a quite different number than mean worker income. The former has stagnated relative to the latter primarily because a massive number of prime-aged workers, in particular young men, have dropped out of the labor pool.[3] Why that's happened is an entire question all on its own. But one thing is clear, the reason for it certainly can't be big businesses exploiting labor, because by definition the unemployed aren't working for anybody at all. [1] https://www.statista.com/statistics/243846/total-compensation-per-employee-in-the-us/ https://www.statista.com/statistics/243846/total-compensatio... [2] https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-productivity-slowdown-since-the-great-recession.htm https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro... [3] https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-participation-what-has-happened-since-the-peak.pdf https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-pa...
    - alisonkisk 6y ago
      Adjusted for inflation, income growth is 0. Capital is capturing all the productivity gains. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
      - dcolkitt 6y ago
        The link you're citing is citing median wages. Productivity is measured in terms of mean output. You're comparing apples to oranges. Mean wages have closely tracked productivity metrics. Median wages have fallen relative to mean wages. That strongly implies that the issue isn't decoupling between wages and productivity, but faster growth in the output of high-skilled workers relative to low-skilled workers. This is confirmed by the empirical research[1], which shows that 61% of the divergence between median wages and productivity has come from income inequality between workers. Only 25% has come from rising corporate profits. [1]https://www.epi.org/publication/ib330-productivity-vs-compensation/ https://www.epi.org/publication/ib330-productivity-vs-compen...
- ajmadesc 6y ago
  At what point do you think a firm becomes 'too heavy' and open itself to disruption?(IBM, Intel, Sears) (Genuinely curious) Does rent seeking count as productivity?
eloff 6y ago
I think the point is that entrepreneurial endeavors are not a zero sum game. Politicians and people sometimes act like billionaires are hoarding a big slice of pie selfishly for themselves, but the reality is they made the pie bigger by adding value to the world. By the definition of how markets work they had to have added more value then they got compensated. This is how it works with idealized new products. With highly competitive fields it is more zero sum, in that you take some pie from your competitors. But that's still good overall as it's adding value and making the market more efficient. The only true zero sum game is the market for attention and why I despise social media companies. Everybody has a fixed amount of time, you can only grow that pie by adding more people.
- IanCal 6y ago
  Those can both be true. If I provide enough value to buy a thousand lifetimes worth of food and sit in my castle with it while people outside my moat starve - am I not selfishly hoarding that food?
  - eloff 6y ago
    Yes. A lot of billionaires do choose to share, currently that's up to them. I think we can should make laws to put higher taxes on the rich, but in practice it's tough to do that well. Often they just move themselves or their money to get around that. One has to balance harvesting eggs com the golden goose with not killing it or driving it away. Taxing just billionaires specifically wouldn't do much as there aren't many of them. It would have to be a broader tax of some variety.
    - tartoran 6y ago
      Taxing billionares I think means more like taxing the multimilionares. If you look at what democrats proposed was a raise in taxes for income of over 1M+ or something of the sorts. Billionares could be taxed more as a penalty of parking their money in a safe fiscal heaven and it is very doable if a concerted effort is made.
    - jdkee 6y ago

dcolkitt 6y ago

The evidence is indisputable that workers at large firms have substantially higher productivity than small firms.[1] Big business also pays its workers substantially higher wages. If your model of big business is that it's a tool for exploiting workers, you'd expect the opposite of this dynamic. Instead the economics is pretty clear that most large firms create synergies that empower individual workers to produce much more than they'd be capable of individually or in small, informal organizations. As a bonus, the sizable bulk of this productivity surplus accumulates in the form of higher wages to the workers themselves. Big business accomplishes this by consistently applying the best practices in organizational management[2]. In contrast small business tends to be much more sloppily managed with a lot more decisions made haphazardly, with many more decisions being made for individual gain rather than the good of the organization as a whole. If anything the balance of the evidence would make a much stronger case that small business is really more exploitative than big business. [1] https://www.jstor.org/stable/117089?seq=1 https://www.jstor.org/stable/117089?seq=1 [2] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.1.203 https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.1.203

Lendal 6y ago
The question though is why shouldn't those workers receive a larger share of their own productivity gains? As we work harder, we should receive more. But since the mid-1970's workers have received only a fraction of their own productivity gains. Most of that value is being sucked upward. It wasn't always this way.
- dcolkitt 6y ago
  Average worker compensation has nearly doubled in the past 20 years.[1] Almost exactly in line with aggregate productivity levels.[2] What I'm guessing you're referring to is median household income. Which is a quite different number than mean worker income. The former has stagnated relative to the latter primarily because a massive number of prime-aged workers, in particular young men, have dropped out of the labor pool.[3] Why that's happened is an entire question all on its own. But one thing is clear, the reason for it certainly can't be big businesses exploiting labor, because by definition the unemployed aren't working for anybody at all. [1] https://www.statista.com/statistics/243846/total-compensation-per-employee-in-the-us/ https://www.statista.com/statistics/243846/total-compensatio... [2] https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-productivity-slowdown-since-the-great-recession.htm https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-pro... [3] https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-participation-what-has-happened-since-the-peak.pdf https://www.bls.gov/opub/mlr/2016/article/pdf/labor-force-pa...
  - alisonkisk 6y ago
    Adjusted for inflation, income growth is 0. Capital is capturing all the productivity gains. https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/ https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
    - dcolkitt 6y ago
      The link you're citing is citing median wages. Productivity is measured in terms of mean output. You're comparing apples to oranges. Mean wages have closely tracked productivity metrics. Median wages have fallen relative to mean wages. That strongly implies that the issue isn't decoupling between wages and productivity, but faster growth in the output of high-skilled workers relative to low-skilled workers. This is confirmed by the empirical research[1], which shows that 61% of the divergence between median wages and productivity has come from income inequality between workers. Only 25% has come from rising corporate profits. [1]https://www.epi.org/publication/ib330-productivity-vs-compensation/ https://www.epi.org/publication/ib330-productivity-vs-compen...
ajmadesc 6y ago
At what point do you think a firm becomes 'too heavy' and open itself to disruption?(IBM, Intel, Sears) (Genuinely curious) Does rent seeking count as productivity?

eloff 6y ago

I think the point is that entrepreneurial endeavors are not a zero sum game. Politicians and people sometimes act like billionaires are hoarding a big slice of pie selfishly for themselves, but the reality is they made the pie bigger by adding value to the world. By the definition of how markets work they had to have added more value then they got compensated. This is how it works with idealized new products. With highly competitive fields it is more zero sum, in that you take some pie from your competitors. But that's still good overall as it's adding value and making the market more efficient. The only true zero sum game is the market for attention and why I despise social media companies. Everybody has a fixed amount of time, you can only grow that pie by adding more people.

IanCal 6y ago
Those can both be true. If I provide enough value to buy a thousand lifetimes worth of food and sit in my castle with it while people outside my moat starve - am I not selfishly hoarding that food?
- eloff 6y ago
  Yes. A lot of billionaires do choose to share, currently that's up to them. I think we can should make laws to put higher taxes on the rich, but in practice it's tough to do that well. Often they just move themselves or their money to get around that. One has to balance harvesting eggs com the golden goose with not killing it or driving it away. Taxing just billionaires specifically wouldn't do much as there aren't many of them. It would have to be a broader tax of some variety.
  - tartoran 6y ago
    Taxing billionares I think means more like taxing the multimilionares. If you look at what democrats proposed was a raise in taxes for income of over 1M+ or something of the sorts. Billionares could be taxed more as a penalty of parking their money in a safe fiscal heaven and it is very doable if a concerted effort is made.
  - jdkee 6y ago