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Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. There was nothing stopping persons B

Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. There was nothing stopping persons B, C, or D from being person A and founding a company for that idea. If B, C, and D chose to strike for a higher wage then they could but there might be an E, F, and G which could take over for them at their previous rates. Anybody can make a giant sized, billion dollar company. Those workers chose to work as employees under standard labor terms. The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation.

camgunz 6y ago
> Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. The labor market doesn't set prices based on value to society and scarcity. If it did, nurses and teachers would be millionaires (there's a shortage of both and they provide high value to society) and middle managers would make very little (there's a glut and they provide very little value to society). It assigns value based on prestige. Capitalist labor market folks would argue strongly otherwise, but the evidence is very clear. The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. And generally this doesn't pass the sniff test--if the labor market shifts and suddenly people in your profession are in higher demand, it's extremely rare that companies offer pay raises to keep their employees. That's because they know that while theoretically their employees can reenter the labor market to negotiate a higher salary with a different employer, in practice employment is very sticky and employees tend not to--for lots of rational reasons (some of which are "oh you're a job hopper, declined"). > There was nothing stopping persons B, C, or D from being person A and founding a company for that idea. This is generally untrue. Companies build moats with patents, litigation, monopolistic business practices, and corrupt, ladder pulling litigation. I think a lot of committed capitalists believe the market will sort this out, but it clearly doesn't. How many upstart chip design houses are there? How many upstart medical device companies are there? Etc. Etc. Furthermore and again, not everyone has the privilege required to be A. Being A takes more risk, and you have to have more resources to reasonably take that risk. It's also been shown that it's far harder for women, recent immigrants, and people of color to become As. > Anybody can make a giant sized, billion dollar company. What? > Those workers chose to work as employees under standard labor terms. Often people don't have the resources to start businesses (let alone billion dollar businesses). It requires a lot of privilege, and it's even harder for women and people of color. It's not at all a simple choice. > The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation. While being pretty tough to prove, I would say a couple things here: - Microsoft continues to post multi-billion dollar profits, and people still work there. I don't understand why early employees are valued more than current employees here. - It's conceivable that even if you made a few million dollars, you might be bitter if the person next to you who didn't work appreciably harder than you made a billion. Everyone's different but, that seems possible. - Even if these effects are less pronounced or acceptable at a place like Microsoft, concentrations of wealth and capital have destabilizing, corrupting effects on society and governments. Taking a per-company view is short sighted. It's also worth saying that most companies aren't made up of relatively wealth software engineers, and income inequality will be more pronounced.
- MinorTom 6y ago
  > If it did, nurses [...] would be millionaires (there's a shortage of both and they provide high value to society) I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision. > The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. I'll mostly (but not completely) agree here. Humans are never fully rational, and that irrationality is certainly a relevant element. > employment is very sticky Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
  - camgunz 6y ago
    > I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision. Totally and this is the danger of state-controlled markets. Capitalists have a point here. I tend to argue that at least in democratic societies people have some control over it, whereas in a free labor market they don't. But in practice, like so many things democracy is supposed to fix, people largely aren't concerned with it. > Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages. Definitely, stickiness works both ways. We've all probably encountered situations where someone's made themselves virtually unfireable because no one can do the things they can. I think generally people characterize that as some kind of selfishness or at least a labor antipattern, but I tend to view it as a rational response to a lack of financial stability: if your employer can completely destabilize you financially, it's pretty rational to take drastic steps to guard against that. Suffice to say it's complicated; far more complicated than the supply/demand curves charts you get in econ 101. --- I'll add that my prescription generally is: - Enshrine the right to organize - Require equal profit sharing across all employees - Require significant worker representation on corporate boards - Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever) - Heavily tax nationally high salaries with a progressive income tax - Heavily punish tax dodging - Set the minimum wage to a living wage and pin it to the CPI - Abolish "right to work"

camgunz 6y ago

> Persons B, C, and D are being paid a rate proportionate to the available labor market for their product building skill set. The labor market doesn't set prices based on value to society and scarcity. If it did, nurses and teachers would be millionaires (there's a shortage of both and they provide high value to society) and middle managers would make very little (there's a glut and they provide very little value to society). It assigns value based on prestige. Capitalist labor market folks would argue strongly otherwise, but the evidence is very clear. The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. And generally this doesn't pass the sniff test--if the labor market shifts and suddenly people in your profession are in higher demand, it's extremely rare that companies offer pay raises to keep their employees. That's because they know that while theoretically their employees can reenter the labor market to negotiate a higher salary with a different employer, in practice employment is very sticky and employees tend not to--for lots of rational reasons (some of which are "oh you're a job hopper, declined"). > There was nothing stopping persons B, C, or D from being person A and founding a company for that idea. This is generally untrue. Companies build moats with patents, litigation, monopolistic business practices, and corrupt, ladder pulling litigation. I think a lot of committed capitalists believe the market will sort this out, but it clearly doesn't. How many upstart chip design houses are there? How many upstart medical device companies are there? Etc. Etc. Furthermore and again, not everyone has the privilege required to be A. Being A takes more risk, and you have to have more resources to reasonably take that risk. It's also been shown that it's far harder for women, recent immigrants, and people of color to become As. > Anybody can make a giant sized, billion dollar company. What? > Those workers chose to work as employees under standard labor terms. Often people don't have the resources to start businesses (let alone billion dollar businesses). It requires a lot of privilege, and it's even harder for women and people of color. It's not at all a simple choice. > The early Microsoft employees that made lots of money from their stock options probably aren't bitter about their compensation. While being pretty tough to prove, I would say a couple things here: - Microsoft continues to post multi-billion dollar profits, and people still work there. I don't understand why early employees are valued more than current employees here. - It's conceivable that even if you made a few million dollars, you might be bitter if the person next to you who didn't work appreciably harder than you made a billion. Everyone's different but, that seems possible. - Even if these effects are less pronounced or acceptable at a place like Microsoft, concentrations of wealth and capital have destabilizing, corrupting effects on society and governments. Taking a per-company view is short sighted. It's also worth saying that most companies aren't made up of relatively wealth software engineers, and income inequality will be more pronounced.

MinorTom 6y ago
> If it did, nurses [...] would be millionaires (there's a shortage of both and they provide high value to society) I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision. > The law of supply and demand also doesn't explain or account for things like race/gender pay gaps, monopsonies, and collusion. I'll mostly (but not completely) agree here. Humans are never fully rational, and that irrationality is certainly a relevant element. > employment is very sticky Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages.
- camgunz 6y ago
  > I know the situation in Germany will be quite different to that in the US, but the reason we have a shortage of nurses is that the pay is not decided on supply and demand in order to have enough of them, but rather as a political decision. Totally and this is the danger of state-controlled markets. Capitalists have a point here. I tend to argue that at least in democratic societies people have some control over it, whereas in a free labor market they don't. But in practice, like so many things democracy is supposed to fix, people largely aren't concerned with it. > Of course it is. Teaching an employee on your systems/way of working costs money and is an element in the decision of whether or not to hire an employee. This decision affects demand and therefore price/wages. Definitely, stickiness works both ways. We've all probably encountered situations where someone's made themselves virtually unfireable because no one can do the things they can. I think generally people characterize that as some kind of selfishness or at least a labor antipattern, but I tend to view it as a rational response to a lack of financial stability: if your employer can completely destabilize you financially, it's pretty rational to take drastic steps to guard against that. Suffice to say it's complicated; far more complicated than the supply/demand curves charts you get in econ 101. --- I'll add that my prescription generally is: - Enshrine the right to organize - Require equal profit sharing across all employees - Require significant worker representation on corporate boards - Heavily tax relatively high salaries, e.g. if everyone makes $1m then 0 tax. If one person makes $100k and 99 others make $1, insane super tax them down to $100 (include tricky stuff like bonuses or whatever) - Heavily tax nationally high salaries with a progressive income tax - Heavily punish tax dodging - Set the minimum wage to a living wage and pin it to the CPI - Abolish "right to work"