5 ms·

The last thing anyone wants is efficient markets in labor. It would make unions illegal, for example, as the entire raison d'etre of unions is to use market pow

by rsj_hn 5y ago

The last thing anyone wants is efficient markets in labor. It would make unions illegal, for example, as the entire raison d'etre of unions is to use market power to raise prices in a coordinated manner. So let's not start pushing for "market efficiency" arguments because those will really come back to bite the proponents of this bill.

HPsquared 5y ago
Now now, political platforms don't need to be logically consistent!
lotsofpulp 5y ago
An individual may not want efficient markets for their short term interest. A society most certainly benefits from efficient markets in the long term by properly allocating labor resources. The bottom income/wealth deciles should definitely welcome price transparency, unless they are "temporarily" embarrassed members of the upper income/wealth deciles.
- rsj_hn 5y ago
  It's not at all clear that society benefits from efficient markets in labor, or that efficient markets theory is something that can even be applied to labor markets in a consistent and logical manner. Efficient markets assume an infinite amount of indistinguishable goods sold by an infinite amount of producers with only marginal costs. This theory is useful because in many situations (e.g. commodities markets) this is a reasonable approximation. That is very different from how labor markets work, even in theory. Labor is not a commodity, there are heavy fixed costs (the costs of skill acquisition), and search costs dominate labor markets.
  - lotsofpulp 5y ago
    I do not see how a society would not benefit from a more efficient labor market, almost by definition of efficient. It is the whole reason why top down control and fascism or communism or Stalinism or Maoism are not ideal, because there is no better signal of supply and demand curves than prices. The way prices move, over a sufficiently large dataset, indicate the way supply and demand curves are moving, and where the ball is moving so you can get to where the ball will be. It is not perfect, of course, but it is better than the alternative (which is?).
    - rsj_hn 5y ago
      The alternative to an efficient labor market is an inefficient labor market. One with regulations, unemployment insurance, unions, all kinds of subsidies (education grants are subsidies for the labor market) etc. Indeed, worrying about the efficiency of labor markets is a mug's game. We should be worrying about creating productive ecosystems and acquiring skills, and leave the labor market to be inefficient.
      - lotsofpulp 5y ago
        Those can all co-exist with price transparency to create a more efficient market than without price transparency. I fail to see why society would not want to benefit from the price signals and have as much of a head start as possible on adjusting labor supply and demand rather than failing to and then having to suffer while trying to correct. Here is a real world example I know from someone suffering due to their lack of interest in real world prices. Pay for most pharmacists has been flat since 2011, and declining since 2016. This is known from pharmacist sharing their pirate offers on pharmacy forums. However, 22 year olds entering pharmacy school were not paying attention to this information, and instead were relying on the BLS's predictions that pharmacy demand would go up 10% and the schools' marketing showing that even though they will spend $200k on tuition, they will come out with amazing pay. Now, if you read the forums, they are full of pharmacists regretting going into pharmacy, being crushed by hundreds of thousands of dollars of debt, and not doing their jobs properly of double checking prescription medications in order to ensure they still have a job because they have that student loan debt gun to their head. So due to lack of pay transparency, there are tens of millions of Americans going to CVS and Walgreens getting medications from overworked pharmacists who themselves admit cannot properly vet the prescriptions to the degree they should. In the meantime, the schools that inflated tuition and class sizes got to benefit and taxpayers are left holding the bag by subsidizing these student loans.

by rsj_hn 5y ago

HPsquared 5y ago

Now now, political platforms don't need to be logically consistent!

lotsofpulp 5y ago

An individual may not want efficient markets for their short term interest. A society most certainly benefits from efficient markets in the long term by properly allocating labor resources. The bottom income/wealth deciles should definitely welcome price transparency, unless they are "temporarily" embarrassed members of the upper income/wealth deciles.

rsj_hn 5y ago
It's not at all clear that society benefits from efficient markets in labor, or that efficient markets theory is something that can even be applied to labor markets in a consistent and logical manner. Efficient markets assume an infinite amount of indistinguishable goods sold by an infinite amount of producers with only marginal costs. This theory is useful because in many situations (e.g. commodities markets) this is a reasonable approximation. That is very different from how labor markets work, even in theory. Labor is not a commodity, there are heavy fixed costs (the costs of skill acquisition), and search costs dominate labor markets.
- lotsofpulp 5y ago
  I do not see how a society would not benefit from a more efficient labor market, almost by definition of efficient. It is the whole reason why top down control and fascism or communism or Stalinism or Maoism are not ideal, because there is no better signal of supply and demand curves than prices. The way prices move, over a sufficiently large dataset, indicate the way supply and demand curves are moving, and where the ball is moving so you can get to where the ball will be. It is not perfect, of course, but it is better than the alternative (which is?).
  - rsj_hn 5y ago
    The alternative to an efficient labor market is an inefficient labor market. One with regulations, unemployment insurance, unions, all kinds of subsidies (education grants are subsidies for the labor market) etc. Indeed, worrying about the efficiency of labor markets is a mug's game. We should be worrying about creating productive ecosystems and acquiring skills, and leave the labor market to be inefficient.
    - lotsofpulp 5y ago
      Those can all co-exist with price transparency to create a more efficient market than without price transparency. I fail to see why society would not want to benefit from the price signals and have as much of a head start as possible on adjusting labor supply and demand rather than failing to and then having to suffer while trying to correct. Here is a real world example I know from someone suffering due to their lack of interest in real world prices. Pay for most pharmacists has been flat since 2011, and declining since 2016. This is known from pharmacist sharing their pirate offers on pharmacy forums. However, 22 year olds entering pharmacy school were not paying attention to this information, and instead were relying on the BLS's predictions that pharmacy demand would go up 10% and the schools' marketing showing that even though they will spend $200k on tuition, they will come out with amazing pay. Now, if you read the forums, they are full of pharmacists regretting going into pharmacy, being crushed by hundreds of thousands of dollars of debt, and not doing their jobs properly of double checking prescription medications in order to ensure they still have a job because they have that student loan debt gun to their head. So due to lack of pay transparency, there are tens of millions of Americans going to CVS and Walgreens getting medications from overworked pharmacists who themselves admit cannot properly vet the prescriptions to the degree they should. In the meantime, the schools that inflated tuition and class sizes got to benefit and taxpayers are left holding the bag by subsidizing these student loans.