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BS? Based on what experience of yours? I spoke with a US Civil Engineer who worked in Honduras in the 1980's, clearing paths in forests for electrical transmis

BS? Based on what experience of yours? I spoke with a US Civil Engineer who worked in Honduras in the 1980's, clearing paths in forests for electrical transmission lines. He initially paid workers significantly higher than local wages-- US-level wages. The result: --> He was threatened with harm by bosses of local companies. Why? He took all their workers. The local companies couldn't compete-- they lost all their labor to his company which paid relatively (relative to Honduras) exorbitant wages. His US company literally destabilized the local labor economy. So, I wouldn't be so quick to jump to "that is BS", as in my opinion it exemplifies naivete & ignorance.

boeingUH60 4y ago
The civil engineer’s experience rings true from what I’ve seen, but there’s some exception for developers and people of other high skilled professions because they are few relative to the population…paying local developers the same as foreign won’t destabilize but it may for manual labor almost everyone can do.
- hex4def6 4y ago
  Sure, but doesn't that mean their absence will have a disproportionate effect on the industries that rely on them? If you're a small 15-person dev company, and now there's a multinational company that's gobbling up developers at 4x the going rate, you're not going to be able to compete. This is one of those things in which it's better to sudden upsets (even if they're "positive"), might have negative consequences. If you're paying +25% over the going rate, you're going to attract a range of people. Someone that designs software for reactor controls might not care (or be compensated enough anyway). However, if you're offering 200% over, you're guaranteed to hoover up the top talent from strategic industries, and that might end up being a net negative in terms of the damage caused.
  - btilly 4y ago
    Your small local company does not own your workers. If the multinational values your workers more than you do, then it is good for everyone except you that they work for the multinational. But, conversely, the multinational values your workers because it knows how to use them for business opportunities elsewhere to make money. But you're in a position to find many of those same opportunities. Which now means that your local economy is not just getting the profit of having the workers do so well, but of the fact that you're keeping the profit margin that otherwise would have gone to the multi-national! Free trade on average makes everyone richer. (Observation originally due to Ricardo.) That means that it brings both opportunities and risks. And the opportunities usually exceed the risks.
6510 4y ago
could create a single pool of workers on a fixed salary and rotate them. that is, if you are stubborn about paying more
Dylan16807 4y ago
If you have enough job openings to hire everyone, that's going to cause issues even if you just pay a competitive local rate.
Aunche 4y ago
At least in the case of Honduras, more people clearing paths for transmission lines accelerates the development of infrastructure that the locals can use. On the other hand, OpenAI moderation doesn't do anything for Kenyans. You can see the effect of this is countries that heavily rely on tourism like Thailand and Bali. The smartest and hardest working people end up serving foreigners rather than their domestic population. Places that aren't catered towards tourists are completely neglected.
- autodev1 4y ago
  "On the other hand, OpenAI moderation doesn't do anything for Kenyans." Have you worked at OpenAI in Kenya? Because you're speaking in absolutes-- as though you're an authority on the topic. Let's use basic logic: Working at a technology company by its nature provides: - Increased experience with Computers - Increased experience with Data - Increased experience with Business Processes - Increased experience with AI Technology & AI Business - Increased experience with Potential business ideas for startups due to exposure to the business processes of the company and the potential therein for improvement - Pay
  - betterpayforken 4y ago
    Have you worked at a technology company in Kenya? Because you're speaking in absolutes-- as though you're an authority on the topic. Let's use basic logic No one in this thread knows a damn thing
    - autodev1 4y ago
      "No one in this thread knows a damn thing" Hahahaa. Well, I can't argue with that. I concur.
anigbrowl 4y ago
BS? Based on what experience of yours? The GP told you: they've been to Kenya themselves and worked with Kenyan developers for years. Please read the whole comment before you fly off the handle at someone. This is unfortunately increasingly common on HN.
- autodev1 4y ago
  Have some consistency. If me questioning someone using the term "BS" = flying off the handle. Does the original poster using the term "BS" != flying off the handle ...?
  - anigbrowl 4y ago
    I am being consistent. You were demanding information that you had already been given. Try putting yourself in the shoes of the person you replied to.
mensetmanusman 4y ago
This. Money distorts markets. Try to distort less unless you know exactly what the consequences will be.
yawboakye 4y ago
i wonder if they would have ever hit saturation here. you can only hire so many people. i would compare it to the discomfort that is felt by private transport operators in the wake of a public transport scheme. when the government of ghana introduced public buses that charged less than half the regular fare, they shook the market. but the public buses could only carry so much--many, due to their circumstances, were served by the private operators. it remains so to this day. in fact, private operators have flourished. likewise, mining companies launching in ghana have usually paid higher than the incumbent. it could be strategic as it allows them to hire highly skilled workers without the cost of pre-training. here too, a saturation is reached, and things stabilize, with people doing the same job but receiving different compensations. we at devcongress (https://devcongress.org https://devcongress.org) have worked hard to ensure that local companies pay top-dollar for tech talent. we enforce this through our job boards. still, there are companies out there paying $500/mo and they receive a flood of applicants. but these are my experiences. makes me believe that after the market has been excited, it will definitely dissipate the energy, and return to previous equilibrium (or achieve equilibrium at a higher orbit). i honestly believe that an equilibrium will be reached.
deleted 4y ago
[deleted]
NickC25 4y ago
>BS? Based on what experience of yours? In addition to having lived (for a short time) in Kenya, worked for a company based out of Nairobi for nearly 5 years, and worked with Kenyans that whole time (in other words, I've seen this stuff firsthand in Kenya, which is the whole point of the article, and my comment)...I have also lived in, worked in, and studied in other developing countries, and seen firsthand what happens when high-paying companies swoop in and change the economic landscape. You know what actually happens? Positive economic change. Isn't the whole point of HN (and YCombinator) to disrupt the status quo, and promote growth? Destabilizing a corrupted, top heavy, status quo where more people now have a chance to grow in life rather than live in abject poverty is a good thing. Nobody cried for the Taxi companies when Uber & Lyft came along, because they destroyed a parasitic, rent-seeking system (Taxi medallions) and the experience for the end-user (both driver and rider) was significantly improved. Same logic applies here. >The result: --> He was threatened with harm by bosses of local companies. Why? He took all their workers. Yet there's a flipside here that you're completely missing. Those same workers had a significant improvement in their lives, most likely able to accumulate what for them was generational wealth, or enough to give their kids a shot at a real chance in life. Those people had enough to stimulate their local economy much more than anyone beforehand. THAT is what drives positive change in 3rd world or developing countries. Keeping things the way they are economically with no disruption in the 3rd world keeps people poor and unable to grow which leads to bigger problems down the road. Giving them a real chance in life by paying them more gives them and their families a larger ability to make real change in their countries and communities. That should be celebrated. Put yourself in the worker's shoes - if someone offered to 10x your wages, what would you do with the extra wealth that you now posses? Having also lived in that part of the world (Mexico, which isn't the quite same as Honduras but analogous enough) , I understand how things sometimes play out in cases like this. The local bosses in your example were probably doing quite well for themselves and keeping a fat cut of the output of their laborers who were paid pennies, and not happy that their game was now being played by a bigger fish than they could fry. So, they acted like a cartel and tried to threaten the new king in town. Did some of the local companies in your example die? Yeah, probably. But nobody is entitled to stay in business....that's sort of the whole point of globalized capitalism - you compete, and you can win or lose, sometimes through your own fault, or sometimes through no fault of your own. Sometimes someone will steal your lunch, and there's not a damn thing you can do about it. That's the reality of it.
henryfjordan 4y ago
Who got hurt by "destabilizing the labor economy"? The bosses who were perfectly fine resorting to threats and extortion? It certainly wasn't the workers. It is fine to recognize that people who wield economic power might be upset when a new economic power arrives in town, but to describe the new guy who is trying to do the right thing as somehow immoral is classist nonsense.
- carom 4y ago
  It is like when you give away mosquito nets and put all the local makers out of business. It is worse in the long run if you tank the job market then leave.
  - henryfjordan 4y ago
    If you plan to continue to give out mosquito nets for 30 years then it's fine to put the locals out of business, better that they spend their time building a comparative advantage in some other industry. If you are doing a 1-and-done kind of project, maybe you have a point. You would have to weigh the cost of the disruption of the local industry against the benefit to the workers though. If you pay what would normally be 5 years worth of wages for a year of work, it's fine to set the local industry back 3 years. The workers still come out ahead and can invest their wages into rebuilding industry.
    - snapplebobapple 4y ago
      Your argument tells me never invest in any business you create because you will likely crater it. Everyone is hurt by overpaying for labor because you distort the labor market in the exact same way monopolies distort markets above marginal cost, causing dead weight loss for society. A small subset of the harms:The company doing the hiring earns less and so can compensate shareholders less, other companies in that labor market are harmed by being artificially priced out of labor,all labor in said labor market is harmed by the price distortions the overpaid labor often causes, if the demand for labor at the artificially high price isn't durable and long lasting everyone is harmed when it goes away (and it's not durable if it isn't driven by fundamentals and is instead driven by fads for overpaying for labor and virtue signalling about it in the first world because fads change and more rational heads will eventually prevail).
ElevenLathe 4y ago
Seems pretty clear to me (pretty much an identity) that labor paying more is good for laborers but bad for their employers. Not sure how to argue with that.

boeingUH60 4y ago

The civil engineer’s experience rings true from what I’ve seen, but there’s some exception for developers and people of other high skilled professions because they are few relative to the population…paying local developers the same as foreign won’t destabilize but it may for manual labor almost everyone can do.

hex4def6 4y ago
Sure, but doesn't that mean their absence will have a disproportionate effect on the industries that rely on them? If you're a small 15-person dev company, and now there's a multinational company that's gobbling up developers at 4x the going rate, you're not going to be able to compete. This is one of those things in which it's better to sudden upsets (even if they're "positive"), might have negative consequences. If you're paying +25% over the going rate, you're going to attract a range of people. Someone that designs software for reactor controls might not care (or be compensated enough anyway). However, if you're offering 200% over, you're guaranteed to hoover up the top talent from strategic industries, and that might end up being a net negative in terms of the damage caused.
- btilly 4y ago
  Your small local company does not own your workers. If the multinational values your workers more than you do, then it is good for everyone except you that they work for the multinational. But, conversely, the multinational values your workers because it knows how to use them for business opportunities elsewhere to make money. But you're in a position to find many of those same opportunities. Which now means that your local economy is not just getting the profit of having the workers do so well, but of the fact that you're keeping the profit margin that otherwise would have gone to the multi-national! Free trade on average makes everyone richer. (Observation originally due to Ricardo.) That means that it brings both opportunities and risks. And the opportunities usually exceed the risks.

6510 4y ago

could create a single pool of workers on a fixed salary and rotate them. that is, if you are stubborn about paying more

Dylan16807 4y ago

If you have enough job openings to hire everyone, that's going to cause issues even if you just pay a competitive local rate.

Aunche 4y ago

At least in the case of Honduras, more people clearing paths for transmission lines accelerates the development of infrastructure that the locals can use. On the other hand, OpenAI moderation doesn't do anything for Kenyans. You can see the effect of this is countries that heavily rely on tourism like Thailand and Bali. The smartest and hardest working people end up serving foreigners rather than their domestic population. Places that aren't catered towards tourists are completely neglected.

autodev1 4y ago
"On the other hand, OpenAI moderation doesn't do anything for Kenyans." Have you worked at OpenAI in Kenya? Because you're speaking in absolutes-- as though you're an authority on the topic. Let's use basic logic: Working at a technology company by its nature provides: - Increased experience with Computers - Increased experience with Data - Increased experience with Business Processes - Increased experience with AI Technology & AI Business - Increased experience with Potential business ideas for startups due to exposure to the business processes of the company and the potential therein for improvement - Pay
- betterpayforken 4y ago
  Have you worked at a technology company in Kenya? Because you're speaking in absolutes-- as though you're an authority on the topic. Let's use basic logic No one in this thread knows a damn thing
  - autodev1 4y ago
    "No one in this thread knows a damn thing" Hahahaa. Well, I can't argue with that. I concur.

anigbrowl 4y ago

BS? Based on what experience of yours? The GP told you: they've been to Kenya themselves and worked with Kenyan developers for years. Please read the whole comment before you fly off the handle at someone. This is unfortunately increasingly common on HN.

autodev1 4y ago
Have some consistency. If me questioning someone using the term "BS" = flying off the handle. Does the original poster using the term "BS" != flying off the handle ...?
- anigbrowl 4y ago
  I am being consistent. You were demanding information that you had already been given. Try putting yourself in the shoes of the person you replied to.

mensetmanusman 4y ago

This. Money distorts markets. Try to distort less unless you know exactly what the consequences will be.

yawboakye 4y ago

i wonder if they would have ever hit saturation here. you can only hire so many people. i would compare it to the discomfort that is felt by private transport operators in the wake of a public transport scheme. when the government of ghana introduced public buses that charged less than half the regular fare, they shook the market. but the public buses could only carry so much--many, due to their circumstances, were served by the private operators. it remains so to this day. in fact, private operators have flourished. likewise, mining companies launching in ghana have usually paid higher than the incumbent. it could be strategic as it allows them to hire highly skilled workers without the cost of pre-training. here too, a saturation is reached, and things stabilize, with people doing the same job but receiving different compensations. we at devcongress (https://devcongress.org https://devcongress.org) have worked hard to ensure that local companies pay top-dollar for tech talent. we enforce this through our job boards. still, there are companies out there paying $500/mo and they receive a flood of applicants. but these are my experiences. makes me believe that after the market has been excited, it will definitely dissipate the energy, and return to previous equilibrium (or achieve equilibrium at a higher orbit). i honestly believe that an equilibrium will be reached.

deleted 4y ago

[deleted]

NickC25 4y ago

>BS? Based on what experience of yours? In addition to having lived (for a short time) in Kenya, worked for a company based out of Nairobi for nearly 5 years, and worked with Kenyans that whole time (in other words, I've seen this stuff firsthand in Kenya, which is the whole point of the article, and my comment)...I have also lived in, worked in, and studied in other developing countries, and seen firsthand what happens when high-paying companies swoop in and change the economic landscape. You know what actually happens? Positive economic change. Isn't the whole point of HN (and YCombinator) to disrupt the status quo, and promote growth? Destabilizing a corrupted, top heavy, status quo where more people now have a chance to grow in life rather than live in abject poverty is a good thing. Nobody cried for the Taxi companies when Uber & Lyft came along, because they destroyed a parasitic, rent-seeking system (Taxi medallions) and the experience for the end-user (both driver and rider) was significantly improved. Same logic applies here. >The result: --> He was threatened with harm by bosses of local companies. Why? He took all their workers. Yet there's a flipside here that you're completely missing. Those same workers had a significant improvement in their lives, most likely able to accumulate what for them was generational wealth, or enough to give their kids a shot at a real chance in life. Those people had enough to stimulate their local economy much more than anyone beforehand. THAT is what drives positive change in 3rd world or developing countries. Keeping things the way they are economically with no disruption in the 3rd world keeps people poor and unable to grow which leads to bigger problems down the road. Giving them a real chance in life by paying them more gives them and their families a larger ability to make real change in their countries and communities. That should be celebrated. Put yourself in the worker's shoes - if someone offered to 10x your wages, what would you do with the extra wealth that you now posses? Having also lived in that part of the world (Mexico, which isn't the quite same as Honduras but analogous enough) , I understand how things sometimes play out in cases like this. The local bosses in your example were probably doing quite well for themselves and keeping a fat cut of the output of their laborers who were paid pennies, and not happy that their game was now being played by a bigger fish than they could fry. So, they acted like a cartel and tried to threaten the new king in town. Did some of the local companies in your example die? Yeah, probably. But nobody is entitled to stay in business....that's sort of the whole point of globalized capitalism - you compete, and you can win or lose, sometimes through your own fault, or sometimes through no fault of your own. Sometimes someone will steal your lunch, and there's not a damn thing you can do about it. That's the reality of it.

henryfjordan 4y ago

Who got hurt by "destabilizing the labor economy"? The bosses who were perfectly fine resorting to threats and extortion? It certainly wasn't the workers. It is fine to recognize that people who wield economic power might be upset when a new economic power arrives in town, but to describe the new guy who is trying to do the right thing as somehow immoral is classist nonsense.

carom 4y ago
It is like when you give away mosquito nets and put all the local makers out of business. It is worse in the long run if you tank the job market then leave.
- henryfjordan 4y ago
  If you plan to continue to give out mosquito nets for 30 years then it's fine to put the locals out of business, better that they spend their time building a comparative advantage in some other industry. If you are doing a 1-and-done kind of project, maybe you have a point. You would have to weigh the cost of the disruption of the local industry against the benefit to the workers though. If you pay what would normally be 5 years worth of wages for a year of work, it's fine to set the local industry back 3 years. The workers still come out ahead and can invest their wages into rebuilding industry.
  - snapplebobapple 4y ago
    Your argument tells me never invest in any business you create because you will likely crater it. Everyone is hurt by overpaying for labor because you distort the labor market in the exact same way monopolies distort markets above marginal cost, causing dead weight loss for society. A small subset of the harms:The company doing the hiring earns less and so can compensate shareholders less, other companies in that labor market are harmed by being artificially priced out of labor,all labor in said labor market is harmed by the price distortions the overpaid labor often causes, if the demand for labor at the artificially high price isn't durable and long lasting everyone is harmed when it goes away (and it's not durable if it isn't driven by fundamentals and is instead driven by fads for overpaying for labor and virtue signalling about it in the first world because fads change and more rational heads will eventually prevail).

ElevenLathe 4y ago

Seems pretty clear to me (pretty much an identity) that labor paying more is good for laborers but bad for their employers. Not sure how to argue with that.