3 ms·

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?”

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)?

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)?