5 ms·

though still very far off the mark of paying employees according to the value that they produce Employees aren't really compensated for increases in output tha

by crusso 14y ago

though still very far off the mark of paying employees according to the value that they produce Employees aren't really compensated for increases in output that are achieved through standard business practices, technology, automation, etc. That's because their relative input remains the same. Same input, same salaries. If I'm starting a business mass-producing widgets and I fund the machinery, process development, and software to produce that -- why should I pay extra for the employee who really only has to push the big red button to start the machines going every morning? Just because a lot of value is produced when he pushes that red button doesn't mean that he should be highly compensated.

dsr_ 14y ago
You shouldn't. You should push that button yourself in the morning, and save the salary entirely. Consequences are left as an exercise for the student.
morsch 14y ago
In that case, you will be forced to drop prices, because your competitor's are probably doing the same (otherwise you'll run out of employees rsn). If prices are falling across the board, people don't need to earn wages as high as before since they can reproduce themselves at the same level with less income. I'm not sure there's any value to this kind of armchair economics.
- crusso 14y ago
  As I said, the machines and the software and the automation produce value. That's a given in this scenario and in lots of businesses currently in existence. If we're going to have any value in a forum at all, we need to at least make an effort to read and understand the arguments of posters before posting straw men.
arg01 14y ago
I'd assume you apply the same policy to the fact that the cost/productivity of machinery, process development, software means that for the same input share holders should be getting the value of a similar business of equivalent market share back in the day as well. If the money is not staying in the business you have a few choices if productivity increases, spread it around, funnel it up, or funnel it down. Since I buy into the idea that extreme wealth inequality negatively impacts society I pick spreading it around.
- crusso 14y ago
  Funneling it up and funneling it down rewards the people who created the productivity increases. Spreading it around rewards an orthogonal group that did nothing to create the productive output and will siphon off it like a parasite. Spreading it around is inherently a worse way to decide where value should flow through a society; especially one as culturally diverse (ie, filled with many self-interested constituencies) as here in the US. [edit: So sad that on a site dedicated to the entrepreneur, arguments that promote entrepreneurship and rewarding good choices and hard work are moderated into the dirt..]
  - _delirium 14y ago
    I guess I mainly think it produces worse societies that are worse to live in, without correspondingly incentivizing innovation appreciably. I've lived in both the US and Scandinavia, and the US feels barely teetering on the edge of "advanced first-world country" in comparison: poor infrastructure, bureaucratic healthcare that causes angst when switching jobs, large numbers of homeless people, huge prison systems, swathes of poverty-stricken ghettoes, visible class demarcations, etc., etc. It felt like such a weird place after I'd spent a few years away and went back, and I realized how it just didn't seem like a nice place to live, but I never realized it could be better than that (I had previously only compared the U.S. to clearly worse-off countries, like Mexico or India). Not just that I thought it was unethical that there were so many poorer people (which I did), but that it was also worse for me, as a middle-class professional, because of the existence of all these social problems. I guess I could've retreated to a gated community and attempted to create my own bubble, but I've had enough of the suburbs. And I don't think you have to give up business or innovation to get it. If your Scandinavian startup becomes the next Mojang, you're still going to be fabulously wealthy, so I don't feel at all disincentivized by the distant possibility that I'll have to fork over a percentage of my hypothetical future millions (I'm certainly not going to move back to Texas just for that). There are more successful companies per capita than you'd expect (certainly more than most American states), and the economy generally still runs on a market basis, there's just a little more sharing of the wealth.
    - 14y ago
drzaiusapelord 14y ago
>f I'm starting a business mass-producing widgets and I fund the machinery, process development, and software to produce that Its rare for there to be some kind of CEO mastermind that builds everything from scratch on day one. More than likely you started small and your staff built these systems. They came up with the ideas, managed the projects, etc. Their input and ideas created that efficiency. > he pushes that red button I think you're taking your manufacturing analogy too far. We're talking skilled labor here, even then you could just have wrote "when my nerd programmers type on their keyboards" and been just as wrong.
squarecat 14y ago
Or, for the sake of discussion, why wouldn't your big red button pusher take home a majority of the profits? Without them, what do you have? As I understand it, your scenario is how unions justify their continued existence. (If you're not already an American Republican, you really should look into it. trollolol...)
- crusso 14y ago
  Without them, what do you have? You just hire another shlep who can wake up on time to hit the red button. If you can't find a reliable person to hit the button for you, you do the R&D to automate it. As I understand it, your scenario is how unions justify their continued existence. You're reading an argument that I didn't make. If you're not already an American Republican I'm a libertarian. I believe that if all you can do is hit a button then you shouldn't be surprised that no one wants to pay you very much. You also shouldn't be offended when your job is truthfully characterized as "just hitting a big red button in the morning".
  - squarecat 14y ago
    Admittedly, my second two statements are largely digressions. But as to the first... My basis was that the button pusher was critical to your business and automation was not feasible, since you would have done that from the beginning. I don't know which economic concept this describes, but the idea is that you are compensating the button pusher based on their absolute, objective value (no pushing, no profit) rather than subjectively (skill-less "schlep").

by crusso 14y ago

dsr_ 14y ago

You shouldn't. You should push that button yourself in the morning, and save the salary entirely. Consequences are left as an exercise for the student.

morsch 14y ago

In that case, you will be forced to drop prices, because your competitor's are probably doing the same (otherwise you'll run out of employees rsn). If prices are falling across the board, people don't need to earn wages as high as before since they can reproduce themselves at the same level with less income. I'm not sure there's any value to this kind of armchair economics.

crusso 14y ago
As I said, the machines and the software and the automation produce value. That's a given in this scenario and in lots of businesses currently in existence. If we're going to have any value in a forum at all, we need to at least make an effort to read and understand the arguments of posters before posting straw men.

arg01 14y ago

I'd assume you apply the same policy to the fact that the cost/productivity of machinery, process development, software means that for the same input share holders should be getting the value of a similar business of equivalent market share back in the day as well. If the money is not staying in the business you have a few choices if productivity increases, spread it around, funnel it up, or funnel it down. Since I buy into the idea that extreme wealth inequality negatively impacts society I pick spreading it around.

crusso 14y ago
Funneling it up and funneling it down rewards the people who created the productivity increases. Spreading it around rewards an orthogonal group that did nothing to create the productive output and will siphon off it like a parasite. Spreading it around is inherently a worse way to decide where value should flow through a society; especially one as culturally diverse (ie, filled with many self-interested constituencies) as here in the US. [edit: So sad that on a site dedicated to the entrepreneur, arguments that promote entrepreneurship and rewarding good choices and hard work are moderated into the dirt..]
- _delirium 14y ago
  I guess I mainly think it produces worse societies that are worse to live in, without correspondingly incentivizing innovation appreciably. I've lived in both the US and Scandinavia, and the US feels barely teetering on the edge of "advanced first-world country" in comparison: poor infrastructure, bureaucratic healthcare that causes angst when switching jobs, large numbers of homeless people, huge prison systems, swathes of poverty-stricken ghettoes, visible class demarcations, etc., etc. It felt like such a weird place after I'd spent a few years away and went back, and I realized how it just didn't seem like a nice place to live, but I never realized it could be better than that (I had previously only compared the U.S. to clearly worse-off countries, like Mexico or India). Not just that I thought it was unethical that there were so many poorer people (which I did), but that it was also worse for me, as a middle-class professional, because of the existence of all these social problems. I guess I could've retreated to a gated community and attempted to create my own bubble, but I've had enough of the suburbs. And I don't think you have to give up business or innovation to get it. If your Scandinavian startup becomes the next Mojang, you're still going to be fabulously wealthy, so I don't feel at all disincentivized by the distant possibility that I'll have to fork over a percentage of my hypothetical future millions (I'm certainly not going to move back to Texas just for that). There are more successful companies per capita than you'd expect (certainly more than most American states), and the economy generally still runs on a market basis, there's just a little more sharing of the wealth.
  - 14y ago

drzaiusapelord 14y ago

>f I'm starting a business mass-producing widgets and I fund the machinery, process development, and software to produce that Its rare for there to be some kind of CEO mastermind that builds everything from scratch on day one. More than likely you started small and your staff built these systems. They came up with the ideas, managed the projects, etc. Their input and ideas created that efficiency. > he pushes that red button I think you're taking your manufacturing analogy too far. We're talking skilled labor here, even then you could just have wrote "when my nerd programmers type on their keyboards" and been just as wrong.

squarecat 14y ago

Or, for the sake of discussion, why wouldn't your big red button pusher take home a majority of the profits? Without them, what do you have? As I understand it, your scenario is how unions justify their continued existence. (If you're not already an American Republican, you really should look into it. trollolol...)

crusso 14y ago
Without them, what do you have? You just hire another shlep who can wake up on time to hit the red button. If you can't find a reliable person to hit the button for you, you do the R&D to automate it. As I understand it, your scenario is how unions justify their continued existence. You're reading an argument that I didn't make. If you're not already an American Republican I'm a libertarian. I believe that if all you can do is hit a button then you shouldn't be surprised that no one wants to pay you very much. You also shouldn't be offended when your job is truthfully characterized as "just hitting a big red button in the morning".
- squarecat 14y ago
  Admittedly, my second two statements are largely digressions. But as to the first... My basis was that the button pusher was critical to your business and automation was not feasible, since you would have done that from the beginning. I don't know which economic concept this describes, but the idea is that you are compensating the button pusher based on their absolute, objective value (no pushing, no profit) rather than subjectively (skill-less "schlep").