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> the market forces will produce a rough equivalent result over time. No, they absolutely will not. Absolutely not. The entire history of the labor movement an

> the market forces will produce a rough equivalent result over time. No, they absolutely will not. Absolutely not. The entire history of the labor movement and of labor law is testament to this. We’ve tried this, repeatedly, in the real world, and labor gets fucked every single time. Employers do not pay according to the value generated by the employee, they pay the minimum they need to get an employee. Get this model out of your head, it is wrong.

ethbr1 2y ago
There's probably a case for Henry Ford, if the parable about paying above-market wages is true. But certainly not since then. And even he probably paid the minimum overage he could. It's the nature of business.
- roughly 2y ago
  Every once in a while someone recognizes that paying good workers good wages works out well for the business, but that never makes it back into the textbooks somehow.
  - Nevermark 2y ago
    I would love a study, which compared how well a company did, and what their overall expenses were: 1. For paying a team of N people the going wage. 2. For paying a team of N/2 people, double the going wage. Aiming for the best workers it could find. 3. Paying a team of 2*N workers, whatever the bottom of the market is. This would be for teams where high functioning workers resulted in high value results, i.e. creative/design/technically challenging work. I have no idea how a study like this would work, but the more challenging the work, the higher likelihood that you save money going high salary, high talent. Some AI researcher seem to be falling into this category, with really high salaries. Researchers certainly have 10x talent. But I bet there are a lot of 2x, 4x engineers, designers, whatever, that are being overlooked and/or under motivated. That would be cheaper to pay, and produce more value, in small numbers, than others in larger numbers.
    - richrichie 2y ago
      These type of firms exist in all sectors.
- deleted 2y ago
  [deleted]
jay_kyburz 2y ago
I wonder if market forces would work better if everyone's salaries was public.
- ceejayoz 2y ago
  There's a viable place to do a case study: https://www.bbc.com/news/magazine-40669239 https://www.bbc.com/news/magazine-40669239
  - jay_kyburz 2y ago
    Thanks for posting. That article was really interesting!
BurningFrog 2y ago
I think/hope we're talking about different things. I think you're saying that employers pay employees as little as they can, not according to some formula based on the value each employee generates. Aside from some very specific exceptions, I think that's very true. But then we need to explain why all companies don't just pay minimum wage! I claim that prices (wages) on a labor market, like on most markets, is determined by supply and demand. Obviously, companies that pay employees more than the value they generate will run out of money and die. This sets an upper limit on wages. The lower limit comes from companies outbidding (demand) each other for workers (supply) as long as it's profitable. In aggregate this means wages will converge on on some large percentage of the value generated by the typical employee.

ethbr1 2y ago

There's probably a case for Henry Ford, if the parable about paying above-market wages is true. But certainly not since then. And even he probably paid the minimum overage he could. It's the nature of business.

roughly 2y ago
Every once in a while someone recognizes that paying good workers good wages works out well for the business, but that never makes it back into the textbooks somehow.
- Nevermark 2y ago
  I would love a study, which compared how well a company did, and what their overall expenses were: 1. For paying a team of N people the going wage. 2. For paying a team of N/2 people, double the going wage. Aiming for the best workers it could find. 3. Paying a team of 2*N workers, whatever the bottom of the market is. This would be for teams where high functioning workers resulted in high value results, i.e. creative/design/technically challenging work. I have no idea how a study like this would work, but the more challenging the work, the higher likelihood that you save money going high salary, high talent. Some AI researcher seem to be falling into this category, with really high salaries. Researchers certainly have 10x talent. But I bet there are a lot of 2x, 4x engineers, designers, whatever, that are being overlooked and/or under motivated. That would be cheaper to pay, and produce more value, in small numbers, than others in larger numbers.
  - richrichie 2y ago
    These type of firms exist in all sectors.
deleted 2y ago
[deleted]

jay_kyburz 2y ago

I wonder if market forces would work better if everyone's salaries was public.

ceejayoz 2y ago
There's a viable place to do a case study: https://www.bbc.com/news/magazine-40669239 https://www.bbc.com/news/magazine-40669239
- jay_kyburz 2y ago
  Thanks for posting. That article was really interesting!

BurningFrog 2y ago

I think/hope we're talking about different things. I think you're saying that employers pay employees as little as they can, not according to some formula based on the value each employee generates. Aside from some very specific exceptions, I think that's very true. But then we need to explain why all companies don't just pay minimum wage! I claim that prices (wages) on a labor market, like on most markets, is determined by supply and demand. Obviously, companies that pay employees more than the value they generate will run out of money and die. This sets an upper limit on wages. The lower limit comes from companies outbidding (demand) each other for workers (supply) as long as it's profitable. In aggregate this means wages will converge on on some large percentage of the value generated by the typical employee.