6 ms·

If you set a house for sale at the “market rate,” are you getting less than you’re supposed to?

Clubber 4y ago
Define the market rate, that's the trick. If I define the market rate and I'm the only one to do that, I say your $200K house is really only $180K, then that's what payers will be willing to pay assuming a not-fire market. Right now, it's a seller's housing market, it's also a seller's market in tech. One market has sky-high prices, one does not.
- mattcwilson 4y ago
  But isn’t that idea - the level at which both sides agree the transaction is “worthwhile” / the arrangement is “worth keeping” the definition of “market rate?” Price is what the market will bear, all that? In your example, I have two options. I take your “lowball,” grumble about it, etc - but I also establish that evidently my house is worth $180K. Or, I sit back and wait, grumble about it, etc, and see if in fact my house is worth $200K after all. And then that gives you two options; both involve grumbling, one involves establishing a “market rate”
  - Clubber 4y ago
    There's all kinda of things in the labor market to pressure lower prices than the housing market. For example, H1B visas, offshoring, etc. Also, if people don't work, they starve, so there is an incentive to take a job whether it's a good one that pays what they need or not. This also doesn't exist in a housing market. Comparing the labor market to the housing market only works if you squint and don't compare it too long.
    - mattcwilson 4y ago
      I acknowledge that analogies fail at a certain remove. I wasn’t particularly trying to make a comparison to the housing market, it was just the example that sprang to mind. Any market should operate similarly, no? Buyers and sellers negotiating over what they consider acceptable terms of exchange? Regarding the “things... [which] pressure lower prices,” how do you account for the record high pay in the US tech sector [1], or pay increases being greater than the overall US average over the past several years [2]? I suppose I’m just wondering how much of this is real examples of corporate malfeasance / runaway capitalism / extortionate price extraction and how much of it is standard side-effects of the way markets operate. [1] https://www.zdnet.com/google-amp/article/tech-salaries-just-hit-record-highs-but-nearly-half-of-workers-still-feel-underpaid/ https://www.zdnet.com/google-amp/article/tech-salaries-just-... [2] https://www.hrdive.com/news/high-performing-tech-workers-see-pay-increases-while-average-wages-stagnate/573936/ https://www.hrdive.com/news/high-performing-tech-workers-see...
      - Clubber 4y ago
        >Any market should operate similarly, no? Ya if you ignore all the forces on that market, supply and demand forces work great in a vacuum. Unfortunately everyone remembers chapter 1 of their Econ book but forgets chapter 2+ (myself included). There are a lot of ways to manipulate those supply and demand forces. Employers certainly have a lot more power to manipulate them than employees do. "Market wages," are one. Who says they are market wages and wages for what position? >[1] https://www.zdnet.com/google-amp/article/tech-salaries-just- https://www.zdnet.com/google-amp/article/tech-salaries-just-... I think articles like these try to lump everyone as a "technologist," and it's too broad a category to be useful information. >A "widespread hunger" for technology professionals has see the average salary for technologists in the US hit a record high of $104,566 Imagine that was "healthcare workers," where they averaged in the salaries of the doctors, neurosurgeons, hospital administration and all the high paid workers, then ponder why nurses think they are underpaid when the average healthcare worker salary is $200K a year. They are misrepresenting what nurses make by obfuscating their actual wage/hours with "average healthcare worker salary." This also goes back to the "average market wages," discussion. If a company tried to hire an architect and said that they pay market wages, but the market wages they site are the average of all technology workers, the salary would be considered low for the architect. Depending on his circumstance, he might be willing to take it though. >real examples of corporate malfeasance / runaway capitalism / extortionate price extraction and how much of it is standard side-effects of the way markets operate. I think it's both. The big problem is the government opened the doors with free trade and H1B visas and it really hurt US workers. Sure it arguably helps the poor in other countries to a degree, but it really helps corporations; both at the expense of the US worker. Those laws probably weren't enacted for the long term benefit of the constituency.
        mattcwilson 4y ago
        I am sincerely having difficulty parsing your argument. I think you are saying: 1. Despite the news articles, tech workers by and large are underpaid. 2. Some exceptions to 1 exist that are sufficiently large and outsized that they are carrying the average. After discounting those individuals, tech wages are below what they should be. 3. Free trade and H1B visas are allowing large numbers of non-US tech talent into the hiring supply; this is driving down wages at the expense of the American tech worker. 4. Regardless of the fact that the supply of these workers is driving down wages as econ 1 would dictate, actual market wages should be much higher, because... (this is where I’m losing you)?
lapcat 4y ago
An interesting thing about the real estate market is that most buyers and sellers hire an agent, who likely knows much more about the market than you do personally. As far as I've seen, job seekers in most industries rarely hire agents. The information differential between buyers and sellers in the labor market is vast. I'm not saying job seekers should hire agents. I'm not saying they shouldn't either though...
- ThrowawayR2 4y ago
  > "As far as I've seen, job seekers in most industries rarely hire agents." If software job seekers hired agents, it would be the agents (the reputable ones anyway) that would require stringent testing of the seekers. One has to know exactly what one is selling to get the best price for the sale; they're not going to take the seeker's word for it any more than an employer would.
  - lapcat 4y ago
    > it would be the agents (the reputable ones anyway) that would require stringent testing of the seekers That's a great way to get zero clients. ;-) It's one thing to go through all that crap to get a job, but who wants to go through all that crap just to get an agent? Not to mention, how is an agent even qualified to give a technical test to a software engineer. In real estate, a home inspection is required by the buyer's agent, not by the seller's agent. Sellers would rather not have that contingency. And the home inspection is only performed after the offer is accepted.
    - ThrowawayR2 4y ago
      An agent that sells dud employees to employers will have zero clients much, much faster. An agent with a high placement and retention rate, well, people will be lined up around the block to become their clients. So ;-) right back 'atchya, sport. As for houses, they can be visually be examined by the seller's agent. They are not going to take the seller's word for it that it has four bedrooms when they can see it only has two and are certainly not going to try to sell it as if it had four.

Define the market rate, that's the trick. If I define the market rate and I'm the only one to do that, I say your $200K house is really only $180K, then that's what payers will be willing to pay assuming a not-fire market. Right now, it's a seller's housing market, it's also a seller's market in tech. One market has sky-high prices, one does not.

mattcwilson 4y ago
But isn’t that idea - the level at which both sides agree the transaction is “worthwhile” / the arrangement is “worth keeping” the definition of “market rate?” Price is what the market will bear, all that? In your example, I have two options. I take your “lowball,” grumble about it, etc - but I also establish that evidently my house is worth $180K. Or, I sit back and wait, grumble about it, etc, and see if in fact my house is worth $200K after all. And then that gives you two options; both involve grumbling, one involves establishing a “market rate”
- Clubber 4y ago
  There's all kinda of things in the labor market to pressure lower prices than the housing market. For example, H1B visas, offshoring, etc. Also, if people don't work, they starve, so there is an incentive to take a job whether it's a good one that pays what they need or not. This also doesn't exist in a housing market. Comparing the labor market to the housing market only works if you squint and don't compare it too long.
  - mattcwilson 4y ago
    I acknowledge that analogies fail at a certain remove. I wasn’t particularly trying to make a comparison to the housing market, it was just the example that sprang to mind. Any market should operate similarly, no? Buyers and sellers negotiating over what they consider acceptable terms of exchange? Regarding the “things... [which] pressure lower prices,” how do you account for the record high pay in the US tech sector [1], or pay increases being greater than the overall US average over the past several years [2]? I suppose I’m just wondering how much of this is real examples of corporate malfeasance / runaway capitalism / extortionate price extraction and how much of it is standard side-effects of the way markets operate. [1] https://www.zdnet.com/google-amp/article/tech-salaries-just-hit-record-highs-but-nearly-half-of-workers-still-feel-underpaid/ https://www.zdnet.com/google-amp/article/tech-salaries-just-... [2] https://www.hrdive.com/news/high-performing-tech-workers-see-pay-increases-while-average-wages-stagnate/573936/ https://www.hrdive.com/news/high-performing-tech-workers-see...
    - Clubber 4y ago
      >Any market should operate similarly, no? Ya if you ignore all the forces on that market, supply and demand forces work great in a vacuum. Unfortunately everyone remembers chapter 1 of their Econ book but forgets chapter 2+ (myself included). There are a lot of ways to manipulate those supply and demand forces. Employers certainly have a lot more power to manipulate them than employees do. "Market wages," are one. Who says they are market wages and wages for what position? >[1] https://www.zdnet.com/google-amp/article/tech-salaries-just- https://www.zdnet.com/google-amp/article/tech-salaries-just-... I think articles like these try to lump everyone as a "technologist," and it's too broad a category to be useful information. >A "widespread hunger" for technology professionals has see the average salary for technologists in the US hit a record high of $104,566 Imagine that was "healthcare workers," where they averaged in the salaries of the doctors, neurosurgeons, hospital administration and all the high paid workers, then ponder why nurses think they are underpaid when the average healthcare worker salary is $200K a year. They are misrepresenting what nurses make by obfuscating their actual wage/hours with "average healthcare worker salary." This also goes back to the "average market wages," discussion. If a company tried to hire an architect and said that they pay market wages, but the market wages they site are the average of all technology workers, the salary would be considered low for the architect. Depending on his circumstance, he might be willing to take it though. >real examples of corporate malfeasance / runaway capitalism / extortionate price extraction and how much of it is standard side-effects of the way markets operate. I think it's both. The big problem is the government opened the doors with free trade and H1B visas and it really hurt US workers. Sure it arguably helps the poor in other countries to a degree, but it really helps corporations; both at the expense of the US worker. Those laws probably weren't enacted for the long term benefit of the constituency.
      - mattcwilson 4y ago
        I am sincerely having difficulty parsing your argument. I think you are saying: 1. Despite the news articles, tech workers by and large are underpaid. 2. Some exceptions to 1 exist that are sufficiently large and outsized that they are carrying the average. After discounting those individuals, tech wages are below what they should be. 3. Free trade and H1B visas are allowing large numbers of non-US tech talent into the hiring supply; this is driving down wages at the expense of the American tech worker. 4. Regardless of the fact that the supply of these workers is driving down wages as econ 1 would dictate, actual market wages should be much higher, because... (this is where I’m losing you)?

lapcat 4y ago

An interesting thing about the real estate market is that most buyers and sellers hire an agent, who likely knows much more about the market than you do personally. As far as I've seen, job seekers in most industries rarely hire agents. The information differential between buyers and sellers in the labor market is vast. I'm not saying job seekers should hire agents. I'm not saying they shouldn't either though...

ThrowawayR2 4y ago
> "As far as I've seen, job seekers in most industries rarely hire agents." If software job seekers hired agents, it would be the agents (the reputable ones anyway) that would require stringent testing of the seekers. One has to know exactly what one is selling to get the best price for the sale; they're not going to take the seeker's word for it any more than an employer would.
- lapcat 4y ago
  > it would be the agents (the reputable ones anyway) that would require stringent testing of the seekers That's a great way to get zero clients. ;-) It's one thing to go through all that crap to get a job, but who wants to go through all that crap just to get an agent? Not to mention, how is an agent even qualified to give a technical test to a software engineer. In real estate, a home inspection is required by the buyer's agent, not by the seller's agent. Sellers would rather not have that contingency. And the home inspection is only performed after the offer is accepted.
  - ThrowawayR2 4y ago
    An agent that sells dud employees to employers will have zero clients much, much faster. An agent with a high placement and retention rate, well, people will be lined up around the block to become their clients. So ;-) right back 'atchya, sport. As for houses, they can be visually be examined by the seller's agent. They are not going to take the seller's word for it that it has four bedrooms when they can see it only has two and are certainly not going to try to sell it as if it had four.