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Here I might disagree. I am really against connection between productivity and wages, because I think the price of labour is defined by it's 'scarcity', not qua

Here I might disagree. I am really against connection between productivity and wages, because I think the price of labour is defined by it's 'scarcity', not quality. Of course it could often correlate - a certain high-skilled engineer sought out by many companies, but I do not think that relationship is causal. There is no law connecting these (productivity and wage level) two. Also there is political implication of looking at people who are poorly paid and saying something like "They should increase their skill-level to get out of poverty" which I think misses the mark totally. Regarding Amazon and Walmart Even though it might be not a real monopsony in literal sense, it could be an effective monopsony where Amazon and Walmart pay what they want essentially (due to the big difference in bargaining power between employees and employers). I'm not in US so it is not so easy for me to get context fully - but is there a scarcity in low-skilled labour? I thought that precisely that there is a lot of people who decide between shitty job and homelessness there is no real competition there. My whole point is that looking at labour as a commodity which is being sold and bought on the market gives a much clearer view on issues like unions, anti-trust, monopoly.

eru 6y ago
There's scarcity in everything that has a price that's bigger than zero. The link between wages and productivity goes via competition: Eg assume your labour can make one employer x $/h (after taxes and equipment, cost of capital etc), and some other employer y $/h. Assume x > y, then the first employer better bid at least y $/h for your services, otherwise the other guy can make a profit by poaching you. > Also there is political implication of looking at people who are poorly paid and saying something like "They should increase their skill-level to get out of poverty" which I think misses the mark totally. Well, if anything, the truth is often politically inconvenient. Alas, the problem is that many people can't _just_ increase their productivity like that. (But as a society, we could try to help them. In general, on the level of a society, no matter how you arrange economics, even in a socialist paradise: productivity is king. Society as a whole can not consume more in the long run than they produce as a whole.) > Regarding Amazon and Walmart Even though it might be not a real monopsony in literal sense, it could be an effective monopsony where Amazon and Walmart pay what they want essentially (due to the big difference in bargaining power between employees and employers). I have no clue what this bargaining power is supposed to be? Amazon is competing with Walmart is competing with McDonalds is competing with Uber etc for low skilled labour. No need to bring any nebulous 'bargaining power' into the discussion? > I thought that precisely that there is a lot of people who decide between shitty job and homelessness there is no real competition there. The decision is between multiple shitty jobs. (Compared to what our descendants in a 100 years will expect, all our jobs are shitty. Compared to what was available a 100 years ago for our ancestors, almost all our jobs and perks are crazy awesome: people working at Walmart can afford smart phones.) > My whole point is that looking at labour as a commodity which is being sold and bought on the market gives a much clearer view on issues like unions, anti-trust, monopoly. Well, you are sort-of right. This perspective is enlightening. Unions trying to monopolize labour is a bit of a problem, yes. Anti-trust legislation is mostly used by entities who can afford expensive lawyers to keep the pesky competition at bay. Monopsony ain't much of a problem in the market for low skilled labour in the US, especially for people willing to move. (And for monopsony not to be a problem we only need enough people being willing to move, not everyone. The margin matters.)

eru 6y ago

There's scarcity in everything that has a price that's bigger than zero. The link between wages and productivity goes via competition: Eg assume your labour can make one employer x $/h (after taxes and equipment, cost of capital etc), and some other employer y $/h. Assume x > y, then the first employer better bid at least y $/h for your services, otherwise the other guy can make a profit by poaching you. > Also there is political implication of looking at people who are poorly paid and saying something like "They should increase their skill-level to get out of poverty" which I think misses the mark totally. Well, if anything, the truth is often politically inconvenient. Alas, the problem is that many people can't _just_ increase their productivity like that. (But as a society, we could try to help them. In general, on the level of a society, no matter how you arrange economics, even in a socialist paradise: productivity is king. Society as a whole can not consume more in the long run than they produce as a whole.) > Regarding Amazon and Walmart Even though it might be not a real monopsony in literal sense, it could be an effective monopsony where Amazon and Walmart pay what they want essentially (due to the big difference in bargaining power between employees and employers). I have no clue what this bargaining power is supposed to be? Amazon is competing with Walmart is competing with McDonalds is competing with Uber etc for low skilled labour. No need to bring any nebulous 'bargaining power' into the discussion? > I thought that precisely that there is a lot of people who decide between shitty job and homelessness there is no real competition there. The decision is between multiple shitty jobs. (Compared to what our descendants in a 100 years will expect, all our jobs are shitty. Compared to what was available a 100 years ago for our ancestors, almost all our jobs and perks are crazy awesome: people working at Walmart can afford smart phones.) > My whole point is that looking at labour as a commodity which is being sold and bought on the market gives a much clearer view on issues like unions, anti-trust, monopoly. Well, you are sort-of right. This perspective is enlightening. Unions trying to monopolize labour is a bit of a problem, yes. Anti-trust legislation is mostly used by entities who can afford expensive lawyers to keep the pesky competition at bay. Monopsony ain't much of a problem in the market for low skilled labour in the US, especially for people willing to move. (And for monopsony not to be a problem we only need enough people being willing to move, not everyone. The margin matters.)